Continuing the story from our previous post, the wealthy Arkad from George Clason’s “The Richest Man in Babylon” was sharing his formula in what he called “The 7 cures for a lean purse.” His first cure introduced a concept that is still popular today, and that is to save 10% of one’s takehome pay. The second cure, is actually a perfect way (the only way?) to create the first—“Control thy expenditures.” It is human nature for our monthly expenses to rise to our level of income, otherwise known as our standard of living. In this age of plastic, it is very easy to spend even more that we earn, because the bill doesn’t arrive for another month, right?
Unfortunately, what we cannot pay off each month is automatically added to the bottom of the next month, creating a potential downward spiral that can escalate to an unmanageable obstacle within a very short time. So the idea here is to control our spending, which necessarily means saying “no” to certain purchases. After all, saving is simply postponing future consumption. “Confuse not the necessary expenses with thy desires” Arkad counsels his students, and concludes by imploring them to only live on nine-tenths of their income, setting aside the other one-tenth.
This accountability, therefore, is necessary in order to accomplish the first of the seven cures: “To start thy purse to fattening.”
There are many tools available to help with this crucial step, but working with a financial advisor is often the extra accountability that can make all the difference.
For more information on diversification and other helpful planning tools, visit http://www.reinertwealthmanagement.com/resource-center/investment/a-look-at-diversification
Reinert Wealth Management: Creating financial recipes since 1989!
Mark Reinert, CFP®, RICP®, MBA
Reinert Wealth Management
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC As an independent advisor with LPL Financial, Mark serves clients through financial planning and investment advising. Mark became a financial advisor in 1989 and obtained his CERTIFIED FINANCIAL PLANNERTM designation in 1995. He obtained his RETIREMENT INCOME CERTIFIED PROFESSIONAL® Mark is a former adjunct faculty member of Baker University where he taught graduate and undergraduate finance and economics courses for nearly ten years, and worked in the banking industry for five years. He has been featured in several publications regarding financial advice and is a regular speaker with various civic and academic organizations.
Mark received his and MBA from Pittsburg State University in 1988 and undergraduate degree from St. Mary of the Plains College in 1984.
Mark Reinert may only discuss and/or transact securities business with residents of the following states: AL, AR, AZ, CA, CO, FL, IL, KS, MO, OK, TX, and WY.