“Which desirest thou the most? Is it the gratification of they desires of each day, a jewel, a bit of finery, better raiment, more food; things quickly gone and forgotten? Or is it substantial belongings, gold, lands, herds, merchandise, income-bringing investments?
The coins thou takest from thy purse bring the first. The coins thou leavest within it will bring the latter.”
In the second chapter of The Richest Man in Babylon, the king of Babylon asks Arkad to teach 100 people the secrets to retaining more of the money that comes through their purses.
Arkad explains that he can boil down everything they will need to seven keys that will cure the lean purses of anyone who listens. The first cure is that they must spend only nine of every ten coins that makes it into their purses.
Limited capital is one of the biggest hurdles that many new traders are faced with. No one will argue that there is a tremendous advantage in having a sizable account to trade with, so we would all be better off with more capital.
Following that logic, if we look at our trading accounts as purses, we should be making every effort to get more coins into them. The first step in doing this is to limit our spending to 90% of the income that our bank account sees.
Some of us have been doing this for years. Some of us aren’t quite there yet. Some of us couldn’t imagine cutting back on expenses.
If we want to achieve great wealth, which is the initial motivation for almost all traders, we have to first take a hard look at ourselves and decide how much we really want it.
Are you willing to sacrifice to achieve that wealth? If so, the path to that wealth is clearly laid out before us. All we have to do is follow it, which will be easier said than done…..but it will work.
The first step is to set aside 10% of your income that you will not spend under any circumstances. I’m going to start today. Want to come with me on this journey? You can…..just start.