7 Cures For a Lean Purse

Introduction

George S. Clason gave “7 Cures for a Lean Purse” to wealth creation in his book ‘The Richest Man in Babylon’. It is one of the most insightful and inspirational books written decades ago by him in 1926 but its principles are relevant even in the present time as they were always. Parables set in the wealthiest country of the ancient world, Babylon, are mentioned in this book. These parables revolve around Arkad who was the richest man in Babylon. We get to learn the secrets of Arkad’s success with the unfolding of these parables. Arkad’s seven simple steps to wealth creation from ‘The Richest Man in Babylon’ popularly known as ‘7 Cures For A Lean Purse’ are:

Seven Cures For A Lean Purse

1. Use your Skills to Pay Yourself First:
“START THY PURSE TO FATTENING.”
The first cure of the 7 cures for a lean purse given by Arkad to his followers is to use your skills to pay yourself first. You should start building your wealth by saving 10% of your annual income. He says that it’s important to pay yourself first. No matter what you do for a living and how much you earn, put 10% of your salary aside, and do not touch it. Those savings will grow over time and bring “satisfaction to thy soul.”

2. Reduce Your Expenditures:
“CONTROL THY EXPENDITURES.”
The second cure of the 7 cures for a lean purse given by Arkad is to reduce their expenditures. He says that one should avoid luxury expenditures that might appear to be necessities. Our ‘necessary expenditures’ grow with the growth in our incomes. Do not confuse your desires with your necessities. Study the habits that you are accustomed to. You may find certain expenses that may wisely be reduced or eliminated. This will help you in increasing your savings rate and allow you to build your wealth faster.
3. Invest What You Save:
“MAKE THY GOLD MULTIPLY.”
According to Arkad, the third cure of the 7 cures for a lean purse is to Invest your savings. After building up our savings and cutting our expenses, we must invest our savings to compound our money. In this way, our earnings will build our fortune. You don’t have to actively work for this income. When you do this, you can make money even when you are sleeping, traveling, or are on a vacation.
4. Protect Your Investments From Loss:
“GUARD THY TREASURES FROM LOSS.”
The fourth cure of the 7 cures for a lean purse is to protect the money that you invest from losses. Arkad tells us to protect the principal amount that we invest from loss by avoiding “get rich quick schemes”. He advises that the gold in your purse must be firmly guarded or else it’ll all get lost. Therefore, one should study each and every investment that s/he is going to make properly to avoid any losses. Do not put your hard-earned money at risk just to get rich quickly.
5. Invest In A Home:
“OWN THY OWN HOME.”
The fifth cure of the 7 cures for a lean purse is to invest your money in buying a home for yourself. He says that one can pay money to the moneylender just as they’ll pay to the landlord. So, one should buy a home for oneself rather than renting one to live in. It’s an asset as the homes generally appreciate in value over time. And that’s how you are not only building equity but also, your equity will most probably increase in value while you own the house. This will lower down your cost of living as well.

6. Invest For Retirement:
“INSURE A FUTURE INCOME.”
According to Arkad, the sixth cure of the 7 cures for a lean purse is to invest for retirement. He says that we must start investing now to make preparations for a sufficient amount of income after retirement to take care of the needs of our growing age and the protection of our families. The sooner you start compounding your money, the more amount of money you’ll have to live a comfortable life even when you retire.
7. Learn New Skills To Increase Your Income:
“INCREASE THY ABILITY TO EARN.”
In the opinion of Arkad, the seventh of the 7 cures for a lean purse is to learn new skills to increase your income. We must keep learning new skills and increase our knowledge to become a wiser investor and earn more money. He urges everyone to be in the front rank of progress and not to stop or else they’ll be left behind. People who seek to learn more about their craft and enhance their skills are heavily rewarded. In present times, almost everyone can learn valuable skills almost for free with the help of the Internet. Doing this will enhance the power, knowledge, and wisdom of a person making him/her more confident in life and help them to achieve their goals.

Summary

The 7 cures for a lean purse help a person to live a rich life but to apply these seven simple steps to wealth creation, one must be disciplined and determined. It takes time to grow your wealth but over a period of time these steps can give you the freedom from working for someone else as you get older. Starting early is definitely better as you can yield the best results well in time.