Everyone likes money. But everyone has different opinions on how to get it and on how to manage it. There’s so much information out there about finance and business and investing that the information overload can get overwhelming.

Sometimes all I want is some simple, yet effective advice that will improve my relationship with money without listening to someone try to sell me a course or try to convince me to invest in their pyramid scheme as I’m sifting through the internet just to find solid information.

Well, I found just the thing I was looking for in George S. Clason’s book, The Richest Man in Babylon. There is a chapter in the book titled: The Five Laws of Gold that contained the golden nuggets of financial advice that I craved, pun intended.

The Five Laws of Gold are broad enough to make you wise, yet specific enough to be effective in application. They are best supplemented by another chapter of The Richest Man in Babylon, The Seven Cures to a Lean Purse, but that’s for another time.

Let’s get to the meat and potatoes.

The First Law of Gold: Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

With everything you make, pay yourself first and save one-tenth of your earnings to invest. Even if it’s a small amount, the compounding effect can make it so much more than you would imagine.

$10,000 is a lot of money to most people. Well, if you divided $10,000 by the number of days in a year, you would have $10,000 more in your bank account if you saved about $27.40 each day. That’s about $822 a month you would save to invest. If you put that money into the S&P 500 and received a 10% return ever year for a decade, then you would end up with ~$167,089.67. Now, that’s a lot of money.

You contributed $99,918.72 of that sum and made $67,170.95 just by making your money work for you. Some people don’t even make $67,170.95 in a year of working full time, and you could make that by investing and sitting back and watching your money grow.

Now imagine that over two or three decades. I was too lazy to do the math myself so I asked AI to do it for me, and the math maths out to more than half a million dollars. The compounding effect is insane and that’s exactly the kind of thing you want to take advantage of if you want to secure a future for yourself and your family.

Maybe $822 is more than one-tenth of your earnings a month, or maybe its less, either way, if you’re not saving and investing one-tenth of your income and making it work for you, then you are guaranteed to have less money at the end of your lifetime. A little can be a lot over time, but nothing is nothing at all.

Whatever you have to invest is enough. The rule of saving one-tenth of your earnings should be the goal, but if you can’t afford that, then save whatever you can. Many people get discouraged and think if they can’t meet the goal of one-tenth, then what is the point, might as well spend it, but over time even a little can compound into a lot. And if you have more to save than that one-tenth, then you should do it because it will benefit you all the more in the long run.

The Second Law of Gold: Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

You need to make your money work for you. Saving is good, but investing is better. If you put all your money in a bank account and let it sit in there and earn even 1% interest, but inflation is at 3%, then you lose 2% a year to inflation. Your money isn’t doing anything useful in the bank. It’s actually depreciating in value over time, and inflation can be much more than 3%.

I know that inflation is unfair and awful, but the nature of money is to flow like the current. That’s why it’s called currency, and the more it moves, the more it grows. If you have money that you’re saving, I would recommend only keeping what you need as an emergency fund in the bank and to put the rest to profitable use.

That means investing in something, whether it be in the stock market, in businesses, real estate, or cryptocurrency. Whatever floats your boat, so long as you’re investing it wisely, which brings us to the Third Law of Gold.

The Third Law of Gold: Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

Good investing is the surest way to make more money, and bad investing is the surest way to lose money. That’s why you need to be a cautious owner of your treasure and ask for the advice of those who are already great at handling wealth.

Find at least one wealthy person in your life who you can trust when it comes to investments and ask them to mentor you. With all the misinformation and scams out there, it can be incredibly helpful to have a mentor that has first-hand experience and can help you avoid their own mistakes. Mentors are short-cuts to learning. A smart man learns from his mistakes, a wise man learns from the mistakes of others.

That wealthy person can be one of your own parents, or even your friend’s dad like it was for Robert Kiyosaki, the author of Rich Dad, Poor Dad. Maybe you know someone you work with who is incredibly well-versed in the stock market who can mentor you, or maybe it’s a close friend who is a finance wizard. Either way, it’s far easier to get rich and not make poor decisions when you have a rich mentor in your corner who already knows the game.

I had little time to keep up with the market and little knowledge of the market itself when I first got interested in investing. The first mistake that I made was following the advice of people I knew who were trying to get rich quick. Rich people aren’t gamblers. They are wise investors that strategically protect their principle. So, naturally I lost money listening to fools because I didn’t know better.

The smartest financial move I’ve ever made was taking my money to an investment firm and now I pay people with much more financial knowledge than I have to make wise choices with my money. I would gladly pay professionals to make informed decisions about my investments and make money instead of hoping that my own “educated” guess and poor timing will work out and I make more than I lose.

I may not be making big wins like others who are taking bigger risks in the stock market, but my money is steadily growing at my investment firm, and I’m definitely not taking as many losses as I was when I was trying to go about it on my own. I didn’t have the time to keep up with the market or do research. I didn’t have the knowledge to make wise investments, but thankfully I didn’t have so much pride that I couldn’t go to an investment firm and get help from people wiser than me in the ways of investing.

The Fourth Law of Gold: Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.

If you have difficultly finding a person who can be your financial mentor, then find someone wise in the ways of money on YouTube that is highly regarded and consume their content, or buy a book written by someone who is financially successful in the way you want to be. But you need to get educated and familiar with what you’re dealing with first.

For example, if you work in the field of tech, then you should invest in tech companies you know have a promising future. If you work in retail, then you probably shouldn’t be investing in tech unless you really understand it. Catch my drift? Stick with what you know, and if you don’t know much like I didn’t, then trust your money to professionals that do.

If your mentor tells you not to put your money into something, then heed their advice. There’s always something new and exciting around the corner, and I’m not saying don’t take a chance but don’t fall for the shiny new thing all the time. Your mentors and other experts have seen and been through more than you know, so listen to their wisdom.

The Fifth Law of Gold: Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.

I know the lessons of the Fifth Law of Gold only too well. It’s part of the reason I decided to take my money to the investment firm. I was basically gambling with my money and taking the advice of friends who were making educated bets when I first got involved with the stock market.

I lost some and I earned some, and that’s because sometimes I was lucky, but I lost much more than I ever should have because I wasn’t relying on my own experience or education. I was investing in things I didn’t understand and those were the things that I lost the most money on. My new rule is that if I don’t know what it’s about or I don’t fully understand it, then I don’t put my money there.

Another reason that I went the investment firm route was because either I didn’t have time to keep up with the market and I got out too late and lost money, or I held investments too long because I romanticized the idea of earning astronomic amounts. I got unrealistic or greedy, and I would end up losing money because I wasn’t wise enough to get out when I should have.

It wasn’t until I read about the Fifth Law of Gold that I finally gained the wisdom to remind myself to be realistic and take a profit without getting too greedy. I learned to protect my principle and get out at a good time.

Don’t listen to schemers.

Don’t put money towards things you don’t understand.

Take the advice of people wiser than you.

Make your money work for you.

Build your wealth by paying yourself one-tenth of your income first.

Go get the bag.

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