By Mark Reinert
Picking up where we left Arkad, the wealthy subject of George Clason’s “The Richest Man in Babylon,” the second of “The 7 cures for a lean purse” was described as the need to control your expenses and live on “nine-tenths of thy earnings.” This of course requires us to arrange our affairs and lifestyle in such a way that we do not need to use the remainder, and can thus save it for a rainy day.
So, the third cure has to do with this remaining 10%. Arkad instructs us to “Make thy Gold Multiply,” reminding that gold in a purse earns nothing. He discovered that investing this gold and earning interest was the key to building his wealth. Referring to his coins as “golden slaves,” he discovered the magic of compound interest and described it perfectly: “As they labored for me, so their children also labored and their children’s children until great was the income from their combined efforts.”
Arkad wasn’t the only one to discover the power of compound interest; Albert Einstein also referred to this phenomena as the eighth wonder of the world! Having the discipline to set aside this 10% is only the first step. The magic happens over time through constant reinvesting of earnings, so that we hope to eventually acquire, “a stream of wealth that shall flow constantly into thy purse.”
Time, discipline, and a good wealth plan can make all the difference, and working with a competent financial advisor is a great place to start!