"I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you." (pg. 23, The Richest Man in Babylon)
Thousands of years ago, bitcoin, forex, whole life policies, banks, and such institutions did not exist. They certainly didn't exist during the Babylonian Era. Yet, how were people able to be so wealthy and rich? The simple, yet profound, wealth building rule changed one nation from prosperous to super prosperous: The 10% Rule.
In The Richest Man In Babylon, we read about the story of Arkad and Algamish. Arkad, a young scribe, inquired about the secret to wealth from a rich and prominent noble, Algamish. Just from one line, Algamish reshapes Arkad's perception on wealth: "A part of all I earned was mine to keep....a part of all you earn is yours to keep. It should be not less than a tenth, no matter how little you earn." (pg. 23-24)
That sounds selfish, but he backs that truth up with even more foundational truth: "You pay to everyone but yourself....you labor for others. As well be a slave and work for what your master gives you to eat and wear... (pg. 23)"
The 10% principle goes on with this point: "Every gold piece you save is a slave to work for you...If you would become wealthy, then what you save must earn." (pg. 24)
In the last Wealth Made Simple post, we talked about the 50/20/30 rule. Let's just say, the 10% rule is the foundational principle of the 50/20/30 rule. And Arkad mastered the 10% rule and became the richest man in Babylon.
The truth is that wealth is abundant, infinite, and always circulating. How we handle this circulation will help us either become wealthy or flat broke. So, how can we apply this foundational principle in our lives? Do we add more jobs on our plate?
Before you go an apply for your 5th or 6th job, let's take the income you already have and utilize this 10% rule.
Job 1's income: $100/week
Job 2's income: $350/week
Job 3's income: $250/week
Job 4's income: $100/week
The total income coming in per week amounts to $800/week, or $3,200 a month. Let's take each income and set aside 10% each week:
Job 1's income with the 10% rule: $10/week
Job 2's income with the 10% rule: $35/week
Job 3's income with the 10% rule: $25/week
Job 4's income with the 10% rule: $10/week
The total set aside each week is $80/week, or $320/month. When you set aside $320/month to invest or put in a high-yield savings account, you are setting aside $3,840/year. If you decide to place your money in a whole life policy, that's even better. We can talk about the value of whole life policies in a later post.
You may want to set it aside for emergency purposes instead. No matter what you do with this 10%, it must earn more. That way, you're not adding a new job. You are, instead, adding a new way to build wealth.
Again, this principle has been tested by all kinds of wealthy people; the first being Arkad. Now, you can take this principle and start this new habit. It's great for those who are not yet ready to try the 50/20/30 rule, as the 10% rule is the foundational basis to build to that 50/20/30 rule. So if you are not financially ready to split your income to the 50/20/30 rule, just start small and pay yourself at least 10% of your total income. Set that aside for a "rainy day" or for whatever it is your wealth building goals are. That way, you can build a habit that lasts a lifetime.
We hope this rule helps you in building your wealth and your accounts (or coffers, if you prefer to call your bank accounts such a name). If you have tried this 10% rule, let us know in the comments below. Don't forget to like and share this post with your family and friends. The more people share posts like this, the more support we can get for our Blog team to keep giving you wonderful service and content such as this.
Until next time, this is TinyBoss signing off!
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