We live in an impatient age, and when it comes to money we want more now, today, not tomorrow. Whether it's a deposit for a mortgage or clearing those credit cards that drain our energy long after we've stopped enjoying what we've bought with them, the the sooner the better. When it comes to investing, we want easy choices and quick returns. Hence the current craze for cryptocurrencies. Why invest in nanotechnology or machine learning when Ethereum is locked in an endless upward spiral and Bitcoin is the gift that keeps on giving?
A century ago, American writer George S Clason took a different approach. In Babylon's Richest Man, he gave the world a treasure – literally – of financial principles based on things that may seem old-fashioned today: prudence, prudence, and wisdom. Clason used the sages of the ancient city of Babylon as the spokesperson for his financial advice, but that advice is as relevant today as it was a century ago, when the Wall Street crash. and the Great Depression were looming.
Take for example the five laws of gold. If you're looking to put your personal finances on a solid footing, wherever you are in life, this is what you're looking for:
Law # 1: Gold comes willingly and in increasing quantities to anyone who puts in at least a tenth of their earnings to create an estate for their future and that of their family. In other words, save 10% of your income. Minimum. Save more than that if you can. And that 10% isn't for next year's vacation or for a new car. It's for the long haul. Your 10% can include your pension contributions, ISAs, premium bonds, or any type of high interest / restricted access savings account. OK, interest rates for savers are at historically low levels right now, but who knows where they will be in five or ten years? And compound interest means your savings will grow faster than you think.
Law # 2: Gold works diligently and with satisfaction for the savvy owner who finds it profitable employment. So if you are looking to invest rather than save, do it wisely. No cryptocurrencies or pyramid schemes. We focus on the words “profitable” and “employment”. Make your money work for you, but remember that the best you can hope for for this side of the rainbow is consistent long term returns, not lottery wins. In practice, this probably means stocks of established companies offering a regular dividend and a steadily rising trend in the price of the shares. You can invest directly, or through a fund manager in the form of unit trusts, but before you part with a single penny, see Laws 3, 4 and 5 …
Law # 3: Gold clings to the protection of the careful owner who invests it under the guidance of those handling it. Before doing anything, speak with a qualified and experienced financial advisor. If you don't know of any, do your research. Find them out on the Internet. What expertise do they have? What kind of customers? Read the reviews. Call them first and get a feel for what they can offer you, then decide if a face to face meeting will work. Check out their commission arrangements. Are they independent or linked to a particular company, under contract to promote the financial products of that company? A decent financial advisor will encourage you to put the basics in place: pension, life insurance, housing, before you move on to investing in emerging markets and space travel. When you're confident you've found an advisor you can count on, listen to them. Trust their advice. But review your relationship with them at regular intervals, say every year, and if you're not happy look elsewhere. Chances are, if your judgment was sound in the first place, you will stick with the same advisor for many years to come.
Law # 4: Gold moves away from one who invests it in businesses or for purposes they are not familiar with or approved by those skilled in the art. If you have deep knowledge of food distribution, invest in the supermarket chain which is increasing its market share. Likewise, if you work for a company that has an employee stock ownership plan, it makes sense to take advantage of it, if you are sure that your company has good prospects. But, you should never invest in a market or financial product that you don't understand (remember Crash!) Or that you can't fully research. If you are tempted to try your hand at currency or options trading and have a financial advisor, talk about it first. If they don't know about it, ask them to refer you to someone who is. Better yet, avoid anything that you are unsure of, regardless of the potential return.
Law # 5: Gold shuns one who seeks impossible gains or follows the seductive advice of crooks and schemers or who trusts his own inexperience. Again, the fifth law follows the heels of the fourth. If you start scouring the internet for financial advice and wealth building ideas, your inbox will soon be full of "cheaters and schemers" promising you the land if you invest £ 999 in their "system" to convert £ 1 into £ 1XXXXXX on the Chicago Mercantile Exchange. Remember that the only one who makes money in a gold rush is the one who sells shovels. Buy the wrong shovel and you'll get into debt fast. Not only will you pay through the nose for a system that has no proven value; by following it you will probably lose a lot more than the price you paid for it. At the very least, you should check out the genuine reviews of the product. And never buy any system, investment vehicle, or financial product from a company that is not registered with a national supervisory body, such as the Financial Conduct Authority for the UK .