Money is plentiful to those who understand this

Last updated on August 4th, 2014 at 11:31 pm

(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

Last Wednesday,  all attendees of COL Financial Midyear Presentation were lucky to have received a copy of a book for kids (from 1-92) entitled (The Retelling of) The Richest Man in Babylon by Rose Fres Fausto. I was one of them. 🙂

The Richest man in Babylon


So if you’ve not attended this, let me share the time-tested golden laws of money shared in this book.

The main premise of this book is this :

Money is plentiful to those who understand AND follow its simple laws.

And what are these laws?

The tiny book gave three.

First Law of Money: Pay Yourself First – A part of all you earn is yours to keep.

Second Law of Money: Get only into a business you understand. Seek advice only from competent people.

Third Law of Money:  Make your gold work for you. Make an army of golden slaves before you buy luxury.

These three laws cover the very basics of money management: how to acquire it, how to keep it, and how to use it.

I believe you’re actually good even if you just follow these three simple laws.

Your Money Beliefs are important too

Interestingly, the book also shattered some wrong beliefs about success and money.

On the role of Lady Luck or Fickle Fate, it says: Luck is the meeting point of preparation an opportunity.

It adds, “Opportunity is a snobbish and impatient goddess who wastes no time with those who are not prepared”.

On the belief that there’s no enough wealth for everyone, the book has this something to say:

Friends, you seem to think that wealth is limited. But I tell you, the world is abundant. Wealth is created whenever men exert energy and effort and do work.

It used its castle building analogy:

“If a  rich man builds himself a new castle, is the gold he pays gone? No, the brickmaster has part of it. The laborer has part of it. When it is completed, is it not worth all its costs? And is the ground upon which it stands not worth more because it is there? Even the ground beside it is now worth more because the castle is there. Wealth grows in magical ways. No one can predict the limit of it.”

When I read this, Henry Sy entered my mind, how he applies this principle by placing his  real estate developments near his malls. With that single move alone, both of these assets instantly increase its worth. Magic no?

When you’re no longer young and has nothing saved

At the end, the book gave hope to those who seem hopeless asking “What then can you advise us to do so that we may also become rich?The years have passed and we are no longer young and we still have nothing saved.

The second statement is one feedback I receive most often from my readers.

And to this concern, the book reiterated the three laws

1. Say to yourself “A part of all I earn is mine to keep. I pay myself first.” Say it in the morning when you wake up. Say it an noon. Say it at night. Say it every hour of each day. Say it until the words stand out like letter of fire across the sky.

In short, make it a part of your sytem daw, to the point na automatic na sya sayo. Habit ba. Do you have this habit already?

Take note, this doesn’t have to be big. More important the amount is the habit, so pls bawal na mag excuse na “e kulang pa nga sakin ang sweldo ko e.”

Weird, dati naman nabubuhay ka without earning the amount you do now. Ngayon, with your increased salary, bat parang mas mahirap to pay for yourself? Mysteries of life no?…

2. Counsel with wise men. Seek the advice of men whose daily work is handling money.

In other words, look for mentors. And don’t just stop there. Apply what they say. Many people look for mentors indeed probably because it feels good, but don’t really APPLY.

I remember what Rex Mendoza, who was once Philam’s big guyz, once shared as pitfall in this generation: the belief that ““If you can now search, you can do it”.

People do that in investing their money. They do self-research then do it themselves. Well maganda actually ang mag-research, but the ultimate question is “maganda ba ang resulta?”

Check your own results. Is it better when compared against the NET performance of pooled funds available out there?

If yes, good for you! If not…

As they say, if you can’t beat them j**n them.

Buti nalang people who do that don’t apply the same principle when they need have to extract their aching tooth, or do surgical operation on themselves.

Rex Mendoza added: Be the net-earner.

In short, focus on increasing your cashflow daw.

Seriously, in my years sa stock market, stock market investing is one slow tool in multiplying your money, don’t you agree?

It’s just good to hear that ‘Stocks outperform all other asset classes” but the question is “How long of a timeframe is that?”

And the answer? Years! Many years!

But of course, that doesn’t mean you stop investing. But what for?  This leads us to the third law.

3. Learn to make your treasure work for you. Make it your slave.

So…the point is, you earn and increase your cash flow, and then use investments (or business) to grow anything in excess of your daily needs. That way, you and your money are both working. From you being the slave of money, the money becomes your slave.

4. Insure an income for your future. Remember that you too will grow old too. Don’t believe those who promise easy and fast money.

Insure an income  for the future since by  this time kasi, you can no longer work. So you prepare for it while you can… and while it’s early. You don’t prepare for your 20 years of retirement  in a span of two years! That would be a lot of catching-up to do!

And don’t fall on scams daw. Unfortunate for one policeman I saw on TV who was victimized recently. Sinangla ang isang ancestral house para lang may i-invest? Ayun, tumiklop. Including all his savings in 25 years. That’s what happens when we can’t tame the greed and get lured by high returns. We lose basic sense.

But these are issues assuming that you’re granted a long life.

But what if heaven suddenly needs one choir member and you you happen to have the voice? Enter the next advice.

5. Provide also that your family may be protected should you die unexpectedly.

Only if you love your family that you do this.  Do you?? Lastly,

6. But remember to enjoy life.

Enjoy the fruits of your labor. You are your biggest asset. Protect and nourish it. 🙂

Are you ready to become rich?

Funny, not all friends of the main character Arkad (who was the wealthiest man in babylon) who learned these concepts were actually ready.

It says

some were silent because they lacked imagination and din’t believe what they just heard

some were frustrated because they expected Arkad to divide his wealth with them

– while some were full of hope because theu fully understood the lessons.


San ka dyan?

Make the right choice.

Have fun investing ( and being ready to be rich!),


PS: The book will soon be available in bookstores. You may still order autographed copies directly from the author,  PM will do. This book may change an entire generation! 🙂

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2 thoughts on “Money is plentiful to those who understand this”

  1. Pwede po magtanong..okay poh ba ung stock trading game ng Phil. Stock Exchange Inc. Ang ibig q poh savhn ay safe poh ba un kc hinihingi personal info at mganda din ba un na training for beginners..

  2. Pingback: Forget everything you learned about money – here’s the real deal | Smart Pinoy Investor

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