We live in an impatient age, and when it comes to money, we want more of it now, today, not tomorrow. Whether it’s a mortgage deposit or clearing those credit cards that lose our energy long after we’ve stopped enjoying what we bought with them, the sooner the better. When it comes to investing, we want easy choices and quick returns. Hence the current cryptocurrency mania. Why invest in nanotechnology or machine learning when Ethereum is locked in an endless upward spiral and bitcoin is a gift that continues to give?
A century ago, the American writer George C. Clayson took a different approach. In The Richest Man in Babylon, he gave the world a treasure trove — literally — of financial principles based on things that may seem old-fashioned today: prudence, prudence, and wisdom. Clayson used the sages of the ancient city of Babylon as spokesmen for his financial advice, but that advice is relevant today, as it was a century ago when the Wall Street collapse and the Great Depression were approaching.
Take for example the five laws of gold. If you want to put your personal finances on a solid footing wherever you are in life, this is for you:
Law № 1: Gold comes with joy and in increasing quantities to anyone who invests at least a tenth of their earnings to create an estate for their future and the future of their family. In other words, save 10% of your income. Minimal. Save more than that if you can. And those 10% aren’t on vacation next year and not on a new car. This is for the long run. Your 10% may include your pension contributions, ISAs, premium bonds or any high interest / restricted savings accounts. Okay, interest rates for investors are now at an all-time low, but who knows where they will be in five to ten years? And compound interest means your savings will grow faster than you think.
Law №2: Gold works diligently and contentedly for a wise master who finds him a lucrative job. So if you want to invest instead of save, do it wisely. No cryptocurrencies or pyramids. We emphasize the words “profitable” and “employment”. Make sure your money works for you, but remember that the best thing you can hope for is a stable return in the long run, not winning the lottery. In practice, this is likely to mean stocks in well-known companies that offer regular dividends and a steady upward trend in stock prices. You can invest directly or through a fund manager in the form of mutual funds, but before parting with one penny, see Laws 3, 4 and 5 …
Law №3: Gold is kept under the protection of a careful owner who puts it under the advice of those who are wise with it. Talk to a qualified, experienced financial advisor before doing anything. If you don’t know it, do some research. Check them out online. What is their experience? What kind of customers? Read the reviews. Call them first to find out what they have to offer, and then decide if a face-to-face meeting is appropriate. Check their commission procedure. Are they independent or affiliated with a particular company under a contract to push that company’s financial products? A decent financial advisor will encourage you to get the basics: retirement, life insurance, somewhere to live before directing you to invest in emerging markets and space travel. If you are sure you have found a consultant you can count on, listen to him. Trust their advice. But review your relationship with them at regular intervals, say annually, and if you’re not happy, look elsewhere. Chances are, if your opinion was valid, you will follow the same consultant for years to come.
Law № 4: Gold slips away from those who invest it in businesses or purposes with which they are unfamiliar or which are not approved by experts in its preservation. If you have in-depth knowledge of food retail, be sure to invest in a supermarket chain that increases market share. Similarly, if you work for a company that has an employee equity scheme, it makes sense to take advantage of it if you are confident that your company has good prospects. But you should never invest in any market or financial product that you don’t understand (remember the crash!) Or can’t fully research. If you are tempted to try your hand at currency or options trading and you have a financial advisor, talk to him first. If they are unaware, ask them to refer you to someone who is. Best of all, avoid anything you’re not sure about, no matter how big the profit potential.
Law № 5: Gold flees from those who seek impossible wages, who follow the alluring advice of tricksters and intriguers, or who believe in their inexperience. Again the fifth law follows the fourth. If you start looking for financial advice and ideas to create wealth online, your inbox will soon be full of “tricksters and intriguers” who promise you land if you invest £ 999 in their “system” to turn £ 1 into £ 1XXXXXX on the Chicago Mercantile Exchange. Remember, the only one who makes money in gold rush is the one who sells shovels. Buy the wrong shovel and you will quickly get into debt. Not only will you pay through the nose for a system that has no proven value; by sticking to it, you will probably lose much more than the price you paid for it. At the very least, you should check out the genuine product reviews. And never buy a system, investment vehicle or financial product from any company that is not registered with a national supervisor, such as the UK Financial Control Authority.