Tuesday, March 9, 2010

Make thy Gold Multiply

Make thy gold multiply. This is the third of the seven rules that George S. Clason lays out in The Richest Man in Babylon.

Building on the first two rules, Make thy gold multiply begins to layout what you should do with the money once you have it.

If you followed my advice on the first rule, Start Thy Purse to Fattening, you've already got a jump on this because this rule simply tells us to do something with the money we've saved.

This is especially true today as money is continually losing value.

Let me make this clear: If you leave money in a checking account and dont' touch it, you are losing money.

Without going into inflation and opportunity cost, you'll just have to take my word on this one.

So Clason cautions against this.

In Babylon, this meant loaning money to the blacksmith or a herder or whatever.

Today this means investing or learning or buying equipment to automate your workflow.

Use your money to make more money. Where do you think the expression "it takes money to make money" comes from?

For many of us, this means stowing it away in a Roth or 401(k) or a CD or even a savings account. That's great.

For others, this means buying your way into a new venture and waiting for the flip. That's great, but riskier.

Still for others, this means hiring a virtual assistant to take the mundane work of your plate so you have more time to learn or make more money. That's great, too.

Bottom line: Don't horde your cash.

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