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!
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!
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.