Every trader wants to know how to make more money.
As it should be.
But if you can’t manage money properly…
Well, it won’t really matter how much you make from your trading.
Recently, I saw a book about money management.
It’s called “The Richest Man In Babylon.”
It was written back in 1926 by George S. Clason, and it’s (ahem) right on the money.
It’s mostly about a poor man asking a rich man about how he got wealthy.
There are some lessons the rich man talks about that are especially useful to traders…
1. Pay Yourself First.
This is the book’s first and most important rule…
“Ten percent of everything you earn is yours to keep.”
In other words, pay yourself first.
Not the electric bill.
Or the IRS.
Or your ego with a new car.
Or anyone else.
I’m not saying you don’t pay your taxes or bills. But if you want to be financially independent, you need to pay yourself first.
That means the first 10% (more is better of course) is yours to save and invest with, so it can bring you back many more dollars without you having to manually work for it.
Money’s tight right now? Keep reading…
2. Live within your means.
Said simply… don’t spend more than you make.
It may be hard in the beginning.
And you may have to trim some fat from your finances, such as overpriced coffees or dining out regularly, at least for a little while.
In the end, it’s about knowing the difference between a desire and an expense.
But more importantly, resist the urge to spend more as you start earning more…
Because the more money you can put aside, the more powerful this next lesson will be…
3. Make your money work for you – “Make thy gold multiply.”
This is our bread and butter.
We talk about it day in and day out here at Hawkeye.
So I’ll skip it for today…
On to the next one:
4. Invest in your personal development.
The more you learn, the more you’ll earn…
Knowledge is power…
Education is the passport to the future…
We’ve heard them all before.
But this is what the rich man says in the book:
“If you want to become good at anything…
…seek advice from people who are experts in their particular field, people who have actually experienced what you’re attempting.”
You’ll save time, money, and headaches.
Couldn’t agree more.
And this is especially easy in the times we live in…
… the era of information.
Knowledge is at our fingertips.
And in this case, it’s just one click away…