The First Law of Gold

Let's start with the First Law of Gold in the "Richest Man in Babylon", with the italics from the book, and the updated words as the sub-bullet.

1. “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."

   • Money comes eagerly, willingly, and in increasing quantities to the person who puts at least 10% of their income into savings, to use in the future for security, providing for your family, and then investments.

Why is it important to save? To start growing money that's yours! There is joy in saving, mainly no one else has any claim to. You're paying yourself first, before anyone else. Savings give you security, and eventually growth through good investments. If you're not used to saving regularly, it will feel tough to spend less! You can use the steps in 'Becoming a smiley saver' to get you going.

Here at LSH, we've highlighted ways of building the Habit of 10%, like using micro-transactions. The main thing is to do it, and consistently.

Here is an example showing how the amount saved every 2 weeks, builds the Habit of 10%, leading to the goal of hitting Dave Ramsey's Baby Step 1. We assume you're starting saving next week e.g., when you get paid. That gives you a starting point. Also, the assumption is that there are 2 pay periods in a month. If you are paid once per month, use the net income per month amount.

Let's say your bi-weekly paycheck is $2,300, or a net income after taxes of $4,600 per month. For week 1, you won't need to do anything yet. In Week 2, you would either manually transfer 10% or $230 to a savings account, or have it automatically transfer the $230.00 every 2 weeks starting on the day you get paid. If the money is in your savings account by the time you wake up, you're doing well! Then every 2 weeks, you keep adding $230.00 to the Savings or High Yield Savings Account (HYSA). As you can see, you'll have more than $1,000 saved (without taking into account any interest earned from the Savings or HYSA) by week 10, or 5 pay periods.

Bi-weekly income - Take home pay ($)	Net Income ($/mth)
$2,300.00	$4,600.00

Week	10% of savings	Amount saved per paycheck	Cumulative saved for Baby Step 1 ($)
1	0%	$0.00	$0.00
2	10%	$230.00	$230.00
3	0%	$0.00	$230.00
4	10%	$230.00	$460.00
5	0%	$0.00	$460.00
6	10%	$230.00	$690.00
7	0%	$0.00	$690.00
8	10%	$230.00	$920.00
9	0%	$0.00	$920.00
10	10%	$230.00	$1,150.00

You've hit Dave Ramsey's Baby Step 1 in 10 short weeks as highlighted below. If your take home is higher, you can save more quickly. If your take home is less, it will take longer. But the main thing is to save consistently.

Then you can progress to Baby Step 2 and attack the non-mortgage debt!

The next article in the series will look at the Second Law, money can work for you and multiply itself.

To your success.