Blog 116 – The Richest Man in Babylon by George Clason

Pedro A. Palicio

|

The Richest Man In Babylon

We read “The Richest Man in Babylon” many years ago; long before we were introduced to the Infinite Banking Concept in 2008. The author, George Clason, is known for writing a series of informational pamphlets about being thrifty and how to achieve financial success. He started writing the pamphlets in 1926, using parables that were set in ancient Babylon. Banks and insurance companies began to distribute the parables, and the most famous ones were compiled into the book “The Richest Man in Babylon”. You should read this book if you are looking to form your foundation on how growing wealth works. The author is also credited with coining the phrase, “pay yourself first”.

The original 1926 book groups the parables into general themes of advice, and particularly “The Seven Cures” and the “Five Laws of Gold”. The parables are told by a fictional Babylonian character called Arkad, a poor scribe who became the “richest man in Babylon”. 

Seven Cures For a Lean Purse

  1. The First Cure: Start thy purse to fattening. Arkad advises on saving 10% of your annual income to start building up your wealth (or purse).
  2. The Second Cure: Control thy expenditures. Arkad advises against luxury expenditures that ultimately become confused as necessities.
  3. The Third Cure: Make thy gold multiply. Arkad advises to invest and to compound the investment return from these savings.
  4. The Fourth Cure: Guard thy treasures from loss. Arkad advises against taking a risk of loss and investing in get-rich-quick schemes.
  5. The Fifth Cure: Make of thy dwelling a profitable investment. Arkad advises buying versus renting your principal residence, and to use your residence to establish a business.
  6. The Sixth Cure: Ensure a future income. Arkad advises on having a pension and future retirement income.
  7. The Seventh Cure: Increase thy ability to earn. Arkad advises to keep developing your own skills to increase your investing wisdom and also to increase your earnings power.

The Five Laws of Gold

  1. 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. Arkad’s advice here is very similar to the First Cure, which is that saving is the start towards building wealth.
  2. 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. Arkad’s advice here is very similar to the Third Cure, which is that these savings can themselves grow and compound your wealth. 
  1. 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. Arkad’s advice here is similar to the Fourth Cure, which is about being patient and having a long-term view. 
  2. 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. Arkad’s advice here is about investing in what you know about and understand. Also, not to invest in schemes which seasoned investors would not recommend. 
  3. 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. Arkad’s advice here is about avoiding get-rich-quick or very aggressive wealth creation strategies. 

As you can see, the above parables describe the Infinite Banking Concept (IBC) process. Nelson Nash in “Becoming Your Own Banker” is trying to change the way people think about their financial decisions. Too many Americans follow the gurus when they tell them to put a small sliver of their paycheck into a highly restricted stock market investment program (aka “tax-qualified plans”), so that they can’t touch these “savings” until decades later when they retire. In the meantime, when these people need to spend money on big-ticket items, they are counseled to do what “everybody” does: go to outside lenders. The result is that the typical American is swimming in debt, with a large fraction of his monthly income devoted to paying interest to outsiders. The fundamental change in thinking occurs when people flip this arrangement. Rather than giving away our savings to the control of outsiders, so that we must approach outsiders (hat in hand) whenever our expenses exceed our paycheck, we can instead begin to capitalize our own “bank”. That is, we direct as much cashflow as possible into building up an asset that we control. IBC is indeed an exceptional cashflow management strategy for your personal economy or for your business.

As we already know, IBC consists of a process and a platform and It just so happens than when we survey the world as it is, a high cash value dividend-paying whole life insurance policy from a mutual life insurance company is by far the best platform on which to implement IBC. It is a guaranteed method of building wealth and contractually obtain access to cash values via policy loans. 

If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at http://InfiniteBankingSimplified.com/  or feel free to email us your questions at ContactUs@InfiniteBankingSimplified.com or call us toll-free at 1-844-443-8422.

Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners

We are experts in designing high cash value dividend-paying whole life policies.          

Call Now Button