We live in an impatient age, and when it comes to money, we want more of it now, today, not tomorrow. Whether it’s a deposit on bail, or settling with those credit cards that waste our energy long after we’ve stopped enjoying what we bought with them, the sooner the better. When it comes to investing, we want easy choices and quick returns. Hence the current cryptocurrency mania. Why invest in nanotechnology or machine learning when Ethereum is fixed in an endless spiral upwards and bitcoin is a gift that continues?
A century ago, American writer George Klasan took a different approach. In The Richest Man in Babylon, he gave the world a treasure trove — literally — of financial principles based on things that may seem old-fashioned today: prudence, prudence, and wisdom. Klasan used the sages of the ancient city of Babylon as spokespersons for his financial advice, but that advice is relevant today, as it was a century ago when Wall Street collapsed and the Great Depression.
Take for example the five laws of gold. If you want to place your personal finances on a healthy basis, wherever you are in life, this is for you:
Law №1: Gold comes with joy and more to those who spend at least a tenth of their earnings on building an estate for their future and family. In other words, save 10% of your income. At least. Save more than you can. And that’s 10% not for next year’s holiday or for a new car. This is for the long term. Your 10% may include your pension contributions, ISAs, premium bonds or any savings on large interest / limited access. Okay, interest rates for depositors are now historically minimal, but who knows where they will be in five to ten years? And compound interest means that your savings will grow faster than you think.
Law №2: Gold works diligently and contentedly on a wise owner who finds a profitable job for it. So if you want to invest rather than save, do so wisely. No cryptocurrencies and pyramid schemes. We focus on the words “profitable” and “employment”. Make money work for you, but remember that the best thing you can hope for on this side of the rainbow is a steady return over time, not winning the lottery. In practice, this probably means stocks of joint stock companies that offer regular dividends and a steady upward trend in stock prices. You can invest directly or through a fund manager in the form of mutual trusts, but before parting with one penny, see Laws 3, 4 and 5 …
Law №3: Gold is kept under the protection of a careful owner who puts it under the advice of wise men. Before doing anything, consult with a qualified experienced financial advisor. If you don’t know it, do some research. Check them out online. What experience do they have? What kind of customers? Read the reviews. Call them first and find out what they can offer you, and then decide if a face-to-face meeting will work out. Check their arrangements. Are they independent or tied to a particular company under a contract to promote that company’s financial products? A decent financial advisor will encourage you to get the basics: retirement, life insurance, somewhere to live, before directing you to invest in emerging markets, and in space travel. If you are sure you have found an advisor you can count on, listen to them. Trust their advice. But regularly review your relationship with them, say, annually, and if you’re not happy, look elsewhere. Chances are, if your opinion was justified in the first place, you will follow the same advisor for years to come.
Law №4: Gold slips away from those who invest it in business or purposes with which they are unfamiliar or which are not approved by qualified professionals. If you know deeply about grocery retail, in any case invest in a supermarket chain that increases market share. Similarly, if you work for a company that has an employee equity scheme, it makes sense to take advantage of it if you are confident that your company has good prospects. But you should never invest in any market or financial product you don’t understand (remember the crash!) That you can’t fully explore. If you are tempted to try your hand at currency trading or options trading and you have a financial advisor, talk to them first. If they are not at speed, ask to be redirected to someone who is. It’s best to stay away from anything you’re not sure about, no matter how much potential comes back.
Law №5: Gold flees to those who seek an impossible salary, or follow the attractive advice of tricksters and fraudsters, or trust their own inexperience. Again, the fifth law follows from the fourth. If you start looking online for financial advice and wealth creation ideas, your inbox will soon be filled with “tricksters and scammers” who promise you land if you invest in their “system” £ 999 for converting £ 1 to £ 1 XXXXXX commodity exchange Chicago. Remember, the only one who makes money on gold rush is the one who sells shovels. Buy the wrong shovel and you will quickly bury yourself in debt. You don’t just pay for the nose for a system that has no proven value; by sticking to it, you will probably lose a lot more than the price you paid for it. At the very least, you should check out valid product reviews. And never buy any system, investment tool or financial product from any company that is not registered with a national watchdog, such as the Office of Financial Conduct in the UK.