The Business of the 21st Century

The cashflow quadrant represents the different methods by which a cash income
is generated. For example, an employee earns money by holding a job and working
for someone else or a company. The self-employed are people who earn money
working for themselves, either as solo operators or through their own small business.
A business owner owns a large business (typically defined as 500 employees or more)
that generates money. Investors earn money from their various investments—in other
words, money generating more money.
E = Employee
S = Self-employed or Small-business owner
B = Business owner
I = Investor

The Richest Man in Babylon

Seven Cures For a Lean Purse[edit]

1. The First Cure: Start thy purse to fattening.^[15]

   Arkad advises on saving 10% of your annual income to start building up your wealth (or purse): "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 they soul".^[3][15]

2. The Second Cure: Control thy expenditures.^[15]

   Arkad advises against luxury expenditures that ultimately become confused as necessities: "The gold we may retain from our earnings is but the start", and, "What each of us calls our 'necessary expenses' will always grow to equal our incomes unless we protest to the contrary", and, "Confuse not the necessary expenses with thy desires".^[3][15]

3. The Third Cure: Make thy gold multiply.^[15]

   Arkad advises to invest and to compound the investment return from these savings: "The earnings it will make shall build our fortunes ... Learn to make your treasure work for you. Make it your slave. Make its children and its children's children work for you".^[3][15]

4. The Fourth Cure: Guard thy treasures from loss.^[15]

   Arkad advises against taking a risk of loss and investing get-rich-quick schemes: "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".^[3][15]

5. The Fifth Cure: Make of thy dwelling a profitable investment.^[15]

   Arkad advises buying versus renting your principal residence, and using your residence to establish a business: "I recommend that every man own the roof that sheltereth him and his", and, "Nor is it beyond the ability of any well-intentioned man to own his home".^[3][15]

6. The Sixth Cure: Insure a future income.^[15]

   Arkad advises on having a pension and future retirement income: "Therefore do I say that it behooves a man to make preparations 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".^[3][15]

7. The Seventh Cure: Increase thy ability to earn.^[15]

   Arkad advises to keep developing your own skills to increase your investing wisdom and also to increase your earnings power: "The more of wisdom we know, the more we may earn", and, "That man who seeks to learn more of his craft shall be richly rewarded".^[3][15]

The Five Laws of Gold[edit]

1. The First Law of Gold. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.^[15]

   Arkad's advice here is very similar the First Cure, which is that saving is the start to building wealth.^[2][15]

2. The Second Law of Gold. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.^[15]

   Arkad's advice here is very similar the Third Cure, which is that these savings can themselves growth and compound your wealth.^[2][15]

3. The Third Law of Gold. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.^[15]

   Arkad's advice here is similar the Fourth Cure, which is about being patient and having a long-term view.^[2][15]

4. The Fourth Law of Gold. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.^[15]

   Arkad's advice here is about investing in what you know about and understand.^[2][15]

5. The Fifth Law of Gold. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.^[15]

   Arkad's advice here is about avoiding get-rich-quick or very aggressive wealth creation strategies.^[2][15]