Babylon

A few posts back I wrote about money and worry. I don’t think that I know anyone who isn’t at least a little worried about money. They’re either worried about the recession/depression, their debt levels, the fact they don’t own a house or that they can’t afford a shiny new watch. Seems to me that we’ve got our heads screwed on the wrong way…again.

Earlier this year I read The Richest Man in Babylon by George Classon. It is a collection of stories that teach you how to get out of debt and become wealthy. And it’s not a bunch of crap like a lot of books on wealth. No get rich quick silliness. Just a lot of ideas that are so sensible they’ve been forgotten and are now uncommonsense.

Here’s the basic premise: of the money that you earn (no matter how much or how little) allocate 10% to savings, 20% to debts and the rest to living expenses. Never pay more than 70% for living expenses and never fail to save and repay debt. This method will get you out of debt, build savings and allow you to live comfortably (although you may have to forgo things you want in the immediate term).

It works. It’s not fast. It’s a simple concept that might be exactly what you need.