If you’re struggling to be successful with your money, and you’re having a difficult time making progress with your finances, then it’s highly likely that there’s a very simple reason why.
In fact, all the way back in 1926, George S. Clason, in his inspirational classic The Richest Man in Babylon, a parable which has touched the lives of readers from coast to coast, described it clearly.
So, for that reason, let’s take a look at part of his story which is made up of the following dialogue between a rich money lender and a laborer who came from humble beginnings:
“’Mark you well my words, for if you do not you will fail to grasp the truth that I will tell you, and you will think that your night’s work has been in vain.’
“Then he looked at me shrewdly from under his shaggy brows and said in a low, forceful tone, ‘I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.’
“Then he continued to look at me with a glance that I could feel pierce me but said no more.
“’Is that all?’ I asked.
“’That was sufficient to change the heart of a sheep herder into the heart of a money lender,’ he replied.
“’But all I earn is mine to keep, is it not?’ I demanded.
“’Far from it,’ he replied. ‘Do you not pay the garment-maker? Do you not pay the sandal-maker? Do you not pay for the things you eat? Can you live in Babylon without spending? What have you to show for your earnings of the past mouth? What for the past year? Fool! You pay to everyone but yourself. Dullard, you labor for others. As well be a slave and work for what your master gives you to eat and wear. If you did keep for yourself one-tenth of all you earn, how much would you have in ten years?’
Okay. So, the reason why you’re not doing well with your money is because you’re paying a lot of the money that you earn to many others. For instance, here’s just a small sample of the groups that you likely pay:
- the government for the taxes that you’re required by law to set aside
- the bank for your mortgage
- the auto dealer for your car
- various insurance companies to protect your life, health, home, and car
- the coffeehouse for your espresso
- the fast food restaurant for your lunch
- the utility company for your electricity
- the phone provider for your cell phone
- the footwear company for your shoes
- the clothing company for your shirts and pants
- the supermarket for your groceries
So, after paying all of these other groups, here’s a question for you: Do you have anything significant to show for your earnings?
If your answer to that question is “no,” then the bottom line is that you’re not keeping enough of your money, if any of it at all, for yourself. And that’s the reason why you’re not succeeding with your money.
Okay. Now that you know why you’re not making progress with your finances, how do you begin to fix your problem? Well, to answer that, let’s continue reading Clason’s inspirational classic. These are the words of wisdom that the rich money lender shared with the laborer who wanted to find out how to accumulate wealth:
“’A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. It can be as much more as you can afford. Pay yourself first. Do not buy from the clothes-maker and the sandal-maker more than you can pay out of the rest and still have enough for food and charity and penance to the gods.
“’Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.’
In other words, to begin growing your wealth, keep a part of every single dollar that you earn. And do this by paying yourself first, before you pay your bank, your car dealer, and before everyone else.
“Why?” you ask. Because if you wait until you have a few extra dollars to save and invest, you’ll probably wait forever.
Now, the easiest way to accomplish this is to make it happen automatically by taking it off the top of your paycheck. To be more specific, set up a direct deposit with your employer so that a part of each and every paycheck is automatically transferred to your 401(k), IRA, or both, rather than sending all of it to your checking account.
Make this amount that is transferred at least 10 percent of your paycheck, and even more if you’re able. In fact, put in as much as you can.
You see, if the money isn’t in your checking account, then it’s much more difficult for you to spend it. Then you can use the rest of your paycheck to cover your other expenses, such as food, clothing, and shelter.
Now, the earlier to begin to do this, and the longer you keep it up, the more wealth you’ll build, and the sooner you’ll be able to enjoy the good things of life that come with it.
