HH: Financial ignorance is one of the main reasons for the great disparity of wealth in North American society. As Clason writes in the first section of this chapter, a few people know how to gain wealth while many of the other people in society end up with nothing. This chapter could be called Financial Basics.
Seven Cures For a Lean Purse
The glory of Babylon endures. Down through the ages its reputation comes to us as the richest of cities, its treasures as fabulous.
Yet it was not always so. The riches of Babylon were the results of the wisdom of its people. They first had to learn how to become wealthy.
When the Good King, Sargon, returned to Babylon after defeating his enemies, the Elamites, he was confronted with a serious situation. The Royal Chancellor explained it to the King thus:
“After many years of great prosperity brought to our people because your majesty built the great irrigation canals and the mighty temples of the Gods, now that these works are completed the people seem unable to support themselves.
“The labourers are without employment. The merchants have few customers. The farmers are unable to sell their produce. The people have not enough gold to buy food.”
“But where has all the gold gone that we spent for these great improvements?” demanded the King.
“It has found its way, I fear,” responded the Chancellor, “into the possession of a few very rich men of our city. It filtered through the fingers of most of our people as quickly as the goat’s milk goes through the strainer. Now that the stream of gold has ceased to flow, most of our people have nothing to show for their earnings.”
The King was thoughtful for some time. Then he asked, “Why should so few men be able to acquire all the gold?”
“Because they know how,” replied the Chancellor. “One may not condemn a man for succeeding because he knows how. Neither may one with justice take away from a man what he has fairly earned, to give to men of less ability.”
“But why,” demanded the King, “should not all the people learn how to accumulate gold and therefore become themselves rich and prosperous?”
“Quite possible, your excellency. But who can teach them? Certainly not the priests, because they know naught of money making.”
“Who knows best in all our city how to become wealthy, Chancellor?” asked the King.
“Thy question answers itself, your majesty. Who has amassed the greatest wealth in Babylon?”
“Well said, my able Chancellor. It is Arkad. He is the richest man in Babylon. Bring him before me on the morrow.”
Upon the following day, as the King had decreed, Arkad appeared before him, straight and sprightly despite his three score years and ten.
“Arkad,” spoke the King, “is it true thou art the richest man in Babylon?”
“So it is reported your majesty, and no man disputes it.”
“How becamest thou so wealthy?”
“By taking advantage of opportunities available to all citizens of our good city.”
“Thou hadst nothing to start with?”
“Only a great desire for wealth. Besides this, nothing.”
“Arkad,” continued the King, “our city is in a very unhappy state because a few men know how to acquire wealth and therefore monopolize it, while the mass of our citizens lack the knowledge of how to keep any part of the gold they receive.
“It is my desire that Babylon be the wealthiest city in the world. Therefore, it must be a city of many wealthy men. Therefore, we must teach all the people how to acquire riches. Tell me, Arkad, is there any secret to acquiring wealth? Can it be taught?”
“It is practical, your majesty. That which one man knows can be taught to others.”
The king’s eyes glowed. “Arkad, thou speaketh the words I wish to hear. Wilt thou lend thyself to this great cause? Wilt thou teach thy knowledge to a school for teachers, each of whom shall teach others until there are enough trained to teach these truths to every worthy subject in my domain?”
Arkad bowed and said, “I am thy humble servant to command. Whatever knowledge I possess will I gladly give for the betterment of my fellowmen and the glory of my King. Let your good chancellor arrange for me a class of one hundred men and I will teach to them those seven cures which did fatten my purse, than which there was none leaner in all Babylon.”
A fortnight later, in compliance with the King’s command, the chosen hundred assembled in the great hall of the Temple of Learning, seated upon colourful rings in a semicircle. Arkad sad beside a small taboret upon which smoked a sacred lamp sending forth a strange and pleasing odour.
“Behold the richest man in Babylon,” whispered a student, nudging his neighbour as Arkad arose. “He is but a man even as the rest of us.”
“As a dutiful subject of our great King,” Arkad began, “I stand before you in his service. Because once I was a poor youth who did greatly desire gold, and because I found knowledge that enabled me to acquire it, he asks that I impart unto you my knowledge.
“I started my fortune in the humblest way. I had no advantage not enjoyed as fully by you and every citizen in Babylon.
“The first storehouse of my treasure was a well-worn purse. I loathed its useless emptiness. I desired that it be round and full, clinking with the sound of gold. Therefore, I sought every remedy for a lean purse. I found seven.
“To you, who are assembled before me, shall I explain the seven cures for a lean purse which I do recommend to all men who desire much gold. Each day for seven days will I explain to you one of the seven remedies.
“Listen attentively to the knowledge that I will impart. Debate it with me. Discuss it among yourselves. Learn these lessons thoroughly, that ye may also plant in your own purse the seed of wealth. First must each of you start wisely to build a fortune of his own. Then wilt thou be competent, and only then, to teach these truths to others.
“I shall teach to you in simple ways how to fatten your purses. This is the first step leading to the temple of wealth, and no man may climb who cannot plant his feet firmly upon the first step.
“We shall now consider the first cure.”
The First Cure: Start Thy Purse To Fattening
Arkad addressed a thoughtful man in the second row. “My good friend, at what craft workest thou?”
“I,” replied the man, “am a scribe and carve records upon the clay tablets.”
“Even at such labour did I myself earn my first coppers. Therefore, thou hast the same opportunity to build a fortune.”
He spoke to a florid-faced man, farther back. “Pray tell also what dost thou to earn thy bread.”
“I,” responded this man, “am a meat butcher. I do buy the goats the farmers raise and kill them and sell the meat to the housewives and the hides to the sandal makers.”
“Because thou dost also labour and earn, thou hast every advantage to succeed that I did possess.”
In this way did Arkad proceed to find out how each man laboured to earn his living. When he had done questioning them, he said:
“Now, my students, ye can see that there are many trades and labours at which men may earn coins. Each of the ways of earning is a stream of gold from which the worker doth divert by his labours a portion to his own purse. Therefore into the purse of each of you flows a stream of coins large or small according to his ability. Is it not so?”
Thereupon they agreed that it was so.
“Then,” continued Arkad, “if each of you desireth to build for himself a fortune, is it not wise to start by utilizing that source of wealth which he already has established?”
To this they agreed.
Then Arkad turned to a humble man who had declared himself an egg merchant. “If thou select one of thy baskets and put into it each morning ten eggs and take out from it each evening nine eggs, what will eventually happen?”
“It will become in time overflowing.”
“Why?”
“Because each day I put in one more egg than I take out.”
Arkad turned to the class with a smile. “Does any man here have a lean purse?”
First they looked amused. Then they laughed. Lastly they waved their purses in jest.
“All right,” he continued, “Now I shall tell thee the first remedy I learned to cure a lean purse. Do exactly as I have suggested to the egg merchant. For every ten coins thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul.
“Deride not what I say because of its simplicity. Truth is always simple. I told thee I would tell how I built my fortune. This was my beginning. I, too, carried a lean purse and cursed it because there was naught within to satisfy my desires. But when I began to take out from my purse but nine parts of ten I put in, it began to fatten. So will thine.
“Now I will tell a strange truth, the reason for which I know not. When I ceased to pay out more than nine-tenths of my earnings, I managed to get along just as well. I was not shorter than before. Also, ere long, did coins come to me more easily than before. Surely it is a law of the Gods that unto him who keepeth and spendeth not a certain part of all his earnings, shall gold come more easily. Likewise, him whose purse is empty does gold avoid.
“Which desirest thou the most? Is it the gratification of thy 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.
“This, my students, was the first cure I did discover for my lean purse: ‘For each ten coins I put in, to spend but nine.’ Debate this amongst yourselves. If any man proves it untrue, tell me upon the morrow when we shall meet again.”
The Second Cure: Control Thy Expenditures
“Some of your members, my students, have asked me this: ‘How can a man keep one-tenth of all he earns in his purse when all the coins he earns are not enough for his necessary expenses?’” So did Arkad address his students upon the second day.
“Yesterday how many of thee carried lean purses?”
“All of us,” answered the class.
“Yet, thou do not all earn the same. Some earn much more than others. Some have much larger families to support. Yet, all purses were equally lean. Now I will tell thee an unusual truth about men and sons of men. It is this: That what each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.
“Confuse not the necessary expenses with thy desires. Each of you, together with your good families, have more desires than your earnings can gratify. Therefore are thy earnings spent to gratify these desires insofar as they will go. Still thou retainest many ungratified desires.
“All men are burdened with more desires than they can gratify. Because of my wealth thinkest thou I may gratify every desire? ‘Tis a false idea. There are limits to my time. There are limits to my strength. There are limits to the distance I may travel. There are limits to what I may eat. There are limits to the zest with which I may enjoy.
“I say to you that just as weeds grow in a field wherever the farmer leaves space for their roots, even so freely do desires grow in men whenever there is possibility of their being gratified. Thy desires are a multitude and those that thou mayest gratify are but few.
“Study thoughtfully thy accustomed habits of living. Herein may be most often found certain accepted expenses that may wisely be reduced or eliminated. Let thy motto be one hundred per cent of appreciated value demanded for each coin spent.
“Therefore, engrave upon the clay each thing for which thou desireth to spend. Select those that are necessary and others that are possible through the expenditure of nine-tenths of thy income. Cross out the rest and consider them but a part of that great multitude of desires that must go unsatisfied and regret them not.
“Budget then thy necessary expenses. Touch not the one-tenth that is fattening thy purse. Let this be thy great desire that is being fulfilled. Keep working with thy budget, keep adjusting it to help thee. Make it thy first assistant in defending thy fattening purse.”
Hereupon one of the students, wearing a robe of red and gold, arose and said, “I am a free man. I believe that it is my right to enjoy the good things of life. Therefore do I rebel against the slavery of a budget which determines just how much I may spend and for what. I feel it would take much pleasure from my life and make me little more than a pack-ass to carry a burden.”
To him Arkad replied, “Who, my friend, would determine thy budget?”
“I would make it for myself,” responded the protesting one.
“In that case were a pack-ass to budget his burden would he include therein jewels and rugs and heavy bars of gold? Not so. He would include hay and grain and a bag of water for the desert trail.
“The purpose of a budget is to help thy purse to fatten. It is to assist thee to have thy necessities and, insofar as attainable, thy other desires. It is to enable thee to realize thy most cherished desires by defending them from thy casual wishes. Like a bright light in a dark cave thy budget shows up the leaks from thy purse and enables thee to stop them and control thy expenditures for definite and gratifying purposes.
“This, then, is the second cure for a lean purse. Budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyments and to gratify thy worthwhile desires without spending more than nine-tenths of thy earnings.”
The Third Cure: Make Thy Gold Multiply
“Behold thy lean purse is fattening. Thou hast disciplined thyself to leave therein one-tenth of all thou earneth. Thou hast controlled thy expenditures to protect thy growing treasure. Next, we will consider means to put thy treasure to labour and to increase. Gold in a purse is gratifying to own and satisfieth a miserly soul but earns nothing. The gold we may retain from our earnings is but the start. The earnings it will make shall build our fortunes.” So spoke Arkad upon the third day to his class.
“How therefore may we put our gold to work? My first investment was unfortunate, for I lost all. Its tale I will relate later. My first profitable investment was a loan I made to a man named Aggar, a shield maker. Once each year did he buy large shipments of bronze brought from across the sea to use in his trade. Lacking sufficient capital to pay the merchants, he would borrow from those who had extra coins. He was an honourable man. His borrowing he would repay, together with a liberal rental, as he sold his shields.
“Each time I loaned to him I loaned back also the rental he had paid to me. Therefore not only did my capital increase, but its earnings likewise increased. Most gratifying was it to have these sums return to my purse.
“I tell you, my students, a man’s wealth is not in the coins he carries in his purse; it is the income he buildeth, the golden stream that continually floweth into his purse and keepeth it always bulging. That is what every man desireth. That is what thou, each one of thee desireth; an income that continueth to come whether thou work or travel.
“Great income I have acquired. So great that I am called a very rich man. My loans to Aggar were my first training in profitable investment. Gaining wisdom from this experience, I extended my loans and investments as my capital increased. From a few sources at first, from many sources later, flowed into my purse a golden stream of wealth available for such wise uses as I should decide.
“Behold, from my humble earnings I had begotten a hoard of golden slaves, each labouring and earning more gold. As they laboured for me, so their children also laboured and their children’s children until great was the income from their combined efforts.
“Gold increaseth rapidly when making reasonable earnings as thou wilt see from the following: A farmer, when his first son was born, took ten pieces of silver to a money lender and asked him to keep it on rental for his son until he became twenty years of age. This the money lender did, and agreed the rental should be one-fourth of its value each four years. The farmer asked, because this sum he had set aside as belonging to his son, that the rental be add to the principal.
“When the boy had reached the age of twenty years, the farmer again went to the money lender to inquire about the silver. The money lender explained that because this sum had been increased by compound interest, the original ten pieces of silver had now grown to thirty and one-half pieces.
“The farmer was well pleased and because the son did not need the coins, he left them with the money lender. When the son became fifty years of age, the father meantime having passed to the other world, the money lender paid the son in settlement one hundred and sixty-seven pieces of silver.
“Thus in fifty years had the investment multiplied itself at rental almost seventeen times.
“This, then, is the third cure for a lean purse: to put each coin to labouring that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse.”
The Fourth Cure: Guard Thy Treasures From Loss
“Misfortune loves a shining mark. Gold in a man’s purse must be guarded with firmness, else it be lost. Thus it is wise that we must first secure small amounts and learn to protect them before the Gods entrust us with larger.” So spoke Arkad upon the fourth day to his class.
“Every owner of gold is tempted by opportunities whereby it would seem that he could make large sums by its investment in most plausible projects. Often friends and relatives are eagerly entering such investment and urge him to follow.
“The first sound principle of investment is security for thy principal. Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly.
“Before thou loan it to any man assure thyself of his ability to repay and his reputation for doing so, that thou mayest not unwittingly be making him a present of thy hard-earned treasure.
“Before thou entrust it as an investment in any field acquaint thyself with the dangers which may beset it.
“My own first investment was a tragedy to me at the time. The guarded savings of a year I did entrust to a brick maker, named Azmur, who was traveling over the far seas and in Tyre agreed to buy for me the rare jewels of the Phoenicians. These we would sell upon his return and divide the profits. The Phoenicians were scoundrels and sold him bits of glass. My treasure was lost. Today, my training would show to me at once the folly of entrusting a brick maker to buy jewels.
“Therefore, do I advise thee from the wisdom of my experiences: be not too confident of thine own wisdom in entrusting thy treasures to the possible pitfalls of investments. Better by far to consult the wisdom of those experienced in handling money for profit. Such advice is freely given for the asking and may readily possess a value equal in gold to the sum thou considerest investing. In truth, such is its actual value if it save thee from loss.
“This, then, is the fourth cure for a lean purse, and of great importance if it prevent thy purse from being emptied once it has become well filled. Guard thy treasure from loss by investing only where thy principal is safe, where it may be reclaimed if desirable, and where thou will not fail to collect a fair rental. Consult with wise men. Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments.”
The Fifth Cure: Make of Thy Dwelling a Profitable Investment
“If a man setteth aside nine parts of his earnings upon which to live and enjoy life, and if any part of this nine parts he can turn into a profitable investment without detriment to his wellbeing, then so much faster will his treasures grow.” So spake Arkad to his class at their fifth lesson.
“All too many of our men of Babylon do raise their families in unseemly quarters. They do pay to exacting landlords liberal rentals for rooms where their wives have not a spot to raise the blooms that gladen a woman’s heart and their children have no place to play their games except in the unclean alleys.
“No man’s family can fully enjoy life unless they do have a plot of ground wherein children can play in the clean earth and where the wife may raise not only blossoms but good rich herbs to feed her family.
“To a man’s heart it brings gladness to eat the figs from his own trees and the grapes of his own vines. To own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart and greater effort behind all his endeavours. Therefore, do I recommend that every man own the roof that sheltered him and his.
“Nor is it beyond the ability of any well intentioned man to own his home. Hath not our great king so widely extended the walls of Babylon that within them much land is now unused and may be purchased at sums most reasonable?
“Also I say to you, my students, that the money lenders gladly consider the desires of men who seek homes and land for their families. Readily may thou borrow to pay the brickmaker and the builder for such commendable purposes, if thou can show a reasonable portion of the necessary sum which thou thyself hath provided for the purpose.
“Then when the house be built, thou canst pay the money lender with the same regularity as thou didst pay the landlord. Because each payment will reduce thy indebtedness to the money lender, a few years will satisfy his loan.
“Then will thy heart be glad because thou wilt own in thy own right a valuable property and thy only cost will be the king’s taxes.
“Also wilt thy good wife go more often to the river to wash thy robes, that each time returning she may bring a goatskin of water to pour upon the growing things.
“Thus come many blessings to the man who owneth his own house. And greatly will it reduce his
cost of living, making available more of his earnings for pleasures and the gratification of his desires. This, then, is the fifth cure for a lean purse: Own thy own home.”
The Sixth Cure: Insure a Future Income
“The life of every man proceeded from his childhood to his old age. This is the path of life and no man may deviate from it unless the Gods call him prematurely to the world beyond. Therefore do I say that it behooves a man to make preparation for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them. This lesson shall instruct thee in providing a full purse when time has made thee less able to learn.” So Arkad addressed his class upon the sixth day.
“The man who, because of his understanding of the laws of wealth, acquireth a growing surplus, should give thought to those future days. He should plan certain investments or provision that may endure safely for many years, yet will be available when the time arrives which he has so wisely anticipated.
“There are diverse ways by which a man may provide with safety for his future. He may provide a hiding place and there bury a secret treasure. Yet, no matter with what skill it be hidden, it may nevertheless become the loot of thieves. For this reason I recommend not this plan.
“A man may buy houses or lands for this purpose. If wisely chosen as to their usefulness and value in the future, they are permanent in their value and their earnings or their sale will provide well for his purpose.
“A man may loan a small sum to the money lender and increase it at regular periods. The rental which the money lender adds to this will largely add to its increase. I do know a sandal maker, named Ansan, who explained to me not long ago that each week for eight years he had deposited with his money lender two pieces of silver. The money lender had but recently given him an accounting over which he greatly rejoiced. The total of his small deposits with their rental at the customary rate of one-fourth their value for each four years, had now become a thousand and forty pieces of silver.
“I did gladly encourage him further by demonstrating to him with my knowledge of the numbers that in twelve years more, if he would keep his regular deposits of but two pieces of silver each week, the money lender would then owe him four thousand pieces of silver, a worthy competence for the rest of his life.
“Surely, when such a small payment made with regularity doth produce such profitable results, no man can afford not to insure a treasure for his old age and the protection of his family, no matter how prosperous his business and his investments may be.
“I would that I might say more about this. In my mind rests a belief that some day wise-thinking men will devise a plan to insure against death whereby many men pay in but a trifling sum regularly, the aggregate making a handsome sum for the family of each member who passeth to the beyond. This do I see as something desirable and which I could highly recommend. But today it is not possible because it must reach beyond the life of any man or any partnership to operate. It must be as stable as the King’s throne. Some day do I feel that such a plan shall come to pass and be a great blessing to many men, because even the first small payment will make available a snug fortune for the family of a member should he pass on.
“But because we live in our own day and not in the days which are to come, must we take advantage of those means and ways of accomplishing our purposes. Therefore do I recommend to all men, that they, by wise and well thought out methods, do provide against a lean purse in their mature years. For a lean purse to a man no longer able to earn or to a family without its head is a sore tragedy.
“This, then is the sixth cure for a lean purse. Provide in advance for the needs of thy growing age and the protection of thy family.”
The Seventh Cure: Increase Thy Ability to Earn
“This day do I speak to thee, my students, of one of the most vital remedies for a lean purse. Yet, I will talk not of gold but of yourselves, of the men beneath the robes of many colours who do sit before me. I will talk to you of those things within the minds and lives of men which do work for or against their success.”
“Not long ago came to me a young man seeking to borrow. When I questioned him the cause of his necessity, he complained that his earnings were insufficient to pay his expenses. Thereupon I explained to him, this being the case, he was a poor customer for the money lender, as he possessed no surplus earning capacity to repay the loan.
“’What you need, young man,’ I told him, ‘is to earn more coins. What dost thou to increase thy capacity to earn?’
“’All that I can do,’ he replied. ‘Six times within two moons have I approached my master to request my pay be increased, but without success. No man can go oftener than that.’
“We may smile at his simplicity, yet he did possess one of the vital requirements to increase his earnings. Within him was a strong desire to earn more, a proper and commendable desire.
“Preceding accomplishment must be desire. Thy desires must be strong and definite. General desires are but weak longings. For a man to wish to be rich is of little purpose. For a man to desire five pieces of gold is a tangible desire which he can press to fulfillment. After he has backed his desire for five pieces of gold with strength of purpose to secure it, next he can find similar ways to obtain ten pieces and then twenty pieces and later a thousand pieces and, behold, he has become wealthy. In learning to secure his one definite small desire, he hath trained himself to secure a larger one. This is the process by which wealth is accumulated: first in small sums, then in larger ones as a man learns and becomes more capable.
“Desires must be simple and definite. They defeat their own purpose should they be too many, too confusing, or beyond a man’s training to accomplish.
“As a man perfected himself in his calling even so doth his ability to earn increase. In those days when I was a humble scribe carving upon the clay for a few coppers each day, I observed that other workers did more than I and were paid more. Therefore, did I determine that I would be exceeded by none. Nor did it take long for me to discover the reason for their greater success. More interest in my work, more concentration upon my task, more persistence in my effort, and behold, few men could carve more tablets in a day than I. With reasonable promptness my increased skill was rewarded, nor was it necessary for me to go six times to my master to request recognition.
“The more of wisdom we know, the more we may earn. That man who seeks to learn more of his craft shall be richly rewarded. If he is an artisan, he may seek to learn the methods and the tools of those most skilful in the same line. If he laboureth at the law of at healing, he may consult and exchange knowledge with others of his calling. If he be a merchant, he may continually seek better goods that can be purchased at lower prices.
“Always do the affairs of man change and improve because keen-minded men seek greater skill that they may better serve those upon whose patronage they depend. Therefore, I urge all men to be in the front rank of progress and not to stand still, lest they be left behind.
“Many things come to make a man’s life rich with gainful experiences. Such things as the following, a man must do if he respects himself:
“He must pay his debts with all the promptness within his power, not purchasing that for which he is unable to pay.
“He must take care of his family that they may think and speak well of him.
“He must make a will of record that, in case the Gods call him, proper and honourable division of his property be accomplished.
“He must have compassion upon those who are injured and smitten by misfortune and aid them within reasonable limits. He must do deeds of thoughtfulness to those dear to him.
“Thus the seventh and last remedy for a lean purse is to cultivate thy own powers, to study and become wiser, to become more skilful, to so act as to respect thyself. Thereby shalt thou acquire confidence in thy self to achieve thy carefully considered desires.
“These then are the seven cures for a lean purse, which, out of the experience of a long and successful life, I do urge for all men who desire wealth.
“There is more gold in Babylon, my students, than thou dreamest of. There is abundance for all.
“Go thou forth and practice these truths that thou mayest prosper and grow wealthy, as is thy right.
“Go thou forth and teach these truths that every honourable subject of his majesty may also share liberally in the ample wealth of our beloved city.”
