The Fifth Law of Gold

Robber running away with the money. AI-generated image.

This is part 5 of the series based on the 5 Laws of Gold. Let's start with the Fifth Law of Gold in the "Richest Man in Babylon", with the italics from the book, and the updated words as the sub-bullet.

“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.”

• Money likes to make money, but steadily and slowly. If the returns sound ridiculously high, get out! If you think you can get rich quickly and stay rich, best of luck to you.

Any reference to specific products in this article is for informational purposes only and does not constitute an endorsement by Little Success Habits. The links to 'The Richest Man in Babylon' or other products are not affiliate links or paid promotions. The information contained herein does not constitute the provision of investment advice.

“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative” (Graham, 1973). That is a great premise for this article. Ask whether the investment you are about to make is claiming unrealistic gains in the short term? Or whether you are taking the alluring messaging of a trickster (or worse a fraudster)? Is the investment of your principal a speculative play? Have you made a level of analysis, or sought good counsel as in the Third Law? Remember, "heed ye the wise men for verily they know the risks that lurk behind every plan to make wealth suddenly" (Richest Man in Babylon). Investments are important to grow your wealth, don't expect or force huge returns in a short period.

In the Fourth Law, we highlighted how inexperience in vetting an opportunity could lead to a loss in your investment. The Fifth Law highlights further that as your savings are growing for making investments, you will come across many opportunities to potentially make a lot of money. Mostly from people trying to line their pockets with your money. "Investing to double your money can be done safely over several years, but there’s a greater risk of losing most or all your money when you're impatient" (Clark, 2024).

Get rich quick. It sounds alluring and highly tempting. Who wouldn't want that? Easy money, with no real effort. Poof, instant mega bucks with a relatively small amount invested. In get-rich schemes, there are significant risks, and the likelihood of long-term gain is low. Worse, you've lost your principal. Even in sudden wealth events such as a relative passing away to leave you a large windfall, this law helps protect you against your "own inexperience and romantic desires in investment" (Richest Man in Babylon). Better to follow as Rob Gordon highlights, "A slow-and-steady approach to stocks and other investments is a proven strategy" (Gordon, 2024).

You can grow $100,000 to $1,000,000, e.g., through Exchange-Traded Funds (ETFs) like the Vanguard S&P 500 Fund (VOO), and either consistently invest, hold over a long time, or both (Bowman, 2024). For example over 10 years (Feb. 14th, 2015 to Feb. 14th, 2025), the VOO ETF total return was +247.75% (FinanceCharts, 2025).

VOO Stock Total Return Chart from Feb. 14th, 2015 to Feb. 14th, 2025. Source image from FinanceCharts, and data as of 14th Feb. 2025.

If you had invested $100,000 into VOO on Feb. 14th, 2015, forgot about it, allowing it to appreciate and ensuring that any dividends were reinvested into VOO, it could be worth approximately $327,750 as of Feb. 14th, 2025. That is a pretty good return over a long period. If you had been consistently investing every month as well as the initial $100,000, say $1,000 per month, with a 12.67% annual return [the 10-year annualized return with the dividends reinvested as of May 2024 (TechCube, 2025)], you would have considerably more today. Closer to $591,000. It is important to mention that "past performance is no indication of future performance, no one can say whether the stock market will perform the same way in the next 20 years" (Best, 2025).

What are impossible earnings compared to reasonable investment returns? For example, "I Turned $1,000 into $10,000 in a Week Trading Options (Strategy Reveal)" seems to be an impossible earning. At least for that week, it does seem to have worked for that options trader. There are ways of making short-term spikes in returns (e.g., luck in timing an exit, leverage, and positive momentum in the market), but generally, it isn't a consistent strategy. When the invested money seems to have "magic powers" as highlighted in Richest Man in Babylon, it might be worth turning and running. I am reminded of the scene in Limitless with Bradley Cooper, where "At the end of the week, my brokerage account contained over $2 million dollars" (Limitless clip via the YouTube channel InfiniteSky in 2021). Most of us don't have access to a mind-bending dosage of NZT to force money to impossible earnings in such a short time.

What are some of the signs of tricksters and fraudsters? Some are more obvious than others. For example, looking at a WhatsApp chat that was blocked, it is clear that it is a scheme with incredible claims, "We have helped over 100,000 investors grow their wealth by over 20x by trading Bitcoin contracts. Friends who want to accumulate wealth quickly, please consult the group assistant in time".

Whatsapp chat from 2023.

This type of setup is increasingly common. The Washington State Department of Financial Institutions (DFI), Securities Division, highlights channels and what to look for (Washington DFI, 2024).

Excerpt taken from "Ongoing Trend of Alleged Cryptocurrency Scams Involving Self Proclaimed “Professors” in WhatsApp Groups" (Washington DFI, 2024).

Think you might be targeted for a scam or that the investment being offered sounds too good? Here are five signs that you may be scammed or about to get scammed (Duped Online, 2024):

1. “Offer exaggerated and above-market returns within a short period of time, with the promise of little to no risk.”

2. “New members are constantly recruited to join the scheme.”

3. “There is an urgency to join the scheme and no clarity on how the scheme works”

4. “The scheme is not registered with or regulated by any recognized authority.”

5. “They use the testimonies from existing members who’ve earned big bucks to promote the scheme.”

   
   

The full article "Get-rich-quick schemes, pyramids and ponzis: five signs you’re being scammed" by professors Bomikazi Zeka and Abdul Latif Alhassan is on The Conversation.

"Americans believe that we can defy the odds, so when we hear of schemes promising to help us build a six-figure or seven-figure business, we believe we can do it." (Duped Online, 2024). As such, it is important to be wary of the Fifth Law and heed its protection from yourself. As Benjamin Graham put it, “The investor’s chief problem, and even his worst enemy, is likely to be himself" (quoted from 'The Evidence Based Investor', Powell, 2024).

The growth of money, like the growth of any system, takes time, patience, and consistency. If someone on the internet claims high returns in a short amount of time, most likely they are trying to free your money and get it into their hands. Remember, “Wealth that stayeth to give enjoyment and satisfaction to its owner comes gradually, because it is a child born of knowledge and persistent purpose."

To your success.