The Most Influential Book I’ve Ever Read

Richest Man in Babylon by George Samuel Clason

I read this book when I was 15, and it changed my perspective on finances ever since.

I won’t give away all the juicy stuff, just in case you haven’t already read this book full of “golden” personal money management wisdom. This is a financial education book, written in 1926, and the story is based in the times of ancient Babylon.

The wealth of knowledge in this book, even as it relates to ancient Babylonian citizens (and the fact that it was written in 1926), it is very applicable to the financial obstacles we face today.

This book is made up of fictional characters that inquire upon their wealthy friend about his secrets to amassing such a fortune. And it is then, the financial wisdom starts to pour all over the pages in parables, short stories, and priceless quotes bursting with simple brilliance.

It’s a quick read, only about 150 pages, and the knowledge you’ll gain from it will put into perspective just how simple money management really is. There’s no dazzling tips or tricks in this book, just old fashioned saving, investing, protecting and multiplying.

I highly encourage everyone to read this book if you haven’t already, it is a timeless masterpiece that has become ever more resourceful in it’s straightforward and uncomplicated approach to personal money management, especially this day and age. Give it to your kids, as my dad gave this book to me, and plant a seed in their minds that will ensure a financially prosperous future.

Here are some really awesome “Babylonian” financial wisdom excerpts from the book:


Start thy purse to fattening

         Control thy expenditures

Make thy gold multiply

    Guard they treasures from loss

             Make of thy dwelling a profitable investment

                Insure a future income. 

                     Increase thy ability to earn.


The 5 Laws of Gold – From The Richest Man in Babylon

  1. Gold comes 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
  2. Gold labours diligently and contentedly for the wiser owner who finds for it profitable employment, multiplying even as the flocks of the field
  3. Gold clings to the protection of the cautious owner who invests it under the advice of men wise in its handling
  4. Gold slips away from the man who invests it in business or purposes with which he is not familiar or which are not approved by those skilled in its keep
  5. Gold flees the man who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment



Investing Like Warren Buffett w/High Dividend Emphasis

The most successful investor in history has some very solid, fundamental and simple guidelines for the way he chooses stocks. I plan to implement the same guidelines with an emphasis in seeking high dividend stocks.


I’ll use 5 rules that Mr. Buffett uses, and add my own high-yield investor twist.


1. Ensure The Business Is Solid & Consistent w/Dividends

Mr Buffett seeks companies that he’ll feel comfortable investing in if “the stock market closed for 5 years”. This means that he invests in companies that show promising growth, earnings and overall performance in the forward projecting years. For finding high-yield stocks, you’d want to implement this same strategy. However, besides strong overall performance, you want to make sure the company your investing in has a strong past history of paying dividends at stable, consistent rates. This means try to find companies that haven’t drastically changed their dividend payouts, or ever stopped paying dividends. Always check a company’s fundamentals through your own due diligence, but also ensure that their dividend payouts are consistent and reliable.

2. Emerge Yourself In The Company’s Business

Investing is businesses that you understand is a critical component of Mr.Buffett’s investing strategy. This is an important element for successful investing for us beginning investors also.  We must understand the fundamentals of the businesses we invest in, because once you invest in the stock, you are now an owner. Does it make any sense for an owner not to understand the business to which he holds financial interest in?

The answer is: NO, it makes absolutely no sense.

Also, it will make reading financial reports easier if you understand how they make money, and it will enable you to project your own analysis of their future earnings, growth, etc. You need to understand how the company makes money to know where the value of the stock is derived from, and their cash flow is a good predictor of future earnings and dividend payouts.


3. Trust The Shot-Callers

Warren Buffett is a firm believer in strong management. It makes a lot of since to want capable and intelligent managers to be in charge of the business you’re investing in.

The way I envision it, is that the company I’m investing in IS my own business that I’ve entrusted to the hands of managers. This helps me make it personal, and from there, I’ll seek and destroy all available information, news, or social profiles I could find on the executive management. Using a website like LinkedIn, and further investigation with Google, should give you a basic understanding of the managers’ past history, their prior works and other important information.


4. Look For The Cigar Butts

Actually a term coined by Benjamin Graham, Warren Buffett has put it in excellent practice and it is now regarded as a pillar to his investing style. In simple terms, cigar butt = cheap stock. Keep in mind, that just because it is cheap doesn’t mean it’s a good deal.

You do want to further assess the stock’s value by implementing some valuing metrics, like this one as an example:

If: Price/Earnings X Price/Book Value IS LESS THAN 22.5

Then: This company may be worth investing into after further analysis.

This is an actual metric Warren Buffett used while working with his mentor, Mr. Graham. It could prove a useful starting point into your analysis of company’s under your radar.


5. Invest It & Forget It (and happily collect the dividends!)

Once you’ve completed your thorough analysis of a company, and have finally decided to invest into a business THAT YOU NOW OWN a part of, you must be prepared to let it conduct it’s business. Warren Buffett stresses that successful investors do not keep their portfolio at the mercy of the media or market and public opinion.

Just because your company endured a horrific public relations attack or scandal does not mean that you have to sell it, if it doesn’t directly affect the means to which the business makes money. We must remember that the market has a very short term memory, and more often than not, any PR disaster eventually flies by the wayside and normal routines go on.

Find a company you are confident in after some intense analysis, and trust yourself enough to not get wrapped up in the buy, sell, buy, sell emotional and financial destruction that you will cause yourself.

Also, keeping in mind that we are dividend investors, and we could not reap dividends if we do not own the stock for a certain time.



Buy & Hold FOREVER.


Thanks for reading,




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Fundamental Value Investing Has Never Changed – Video

I wanted to archive this video and share it, as it highlights the important underlying message of investing. Investing HAS NOT changed. Long term, value investing has always been the road to true wealth.

This video illustrates (in old fashioned cartoon style) how a small amount invested, in a strict monthly plan (Monthly Investment Plan) that will snowball into a very respectable and highly-valued portfolio. Also, that we should be reject get-rich-quick schemes like the plague.

The beginning of the video after the respectable family man earns a $60 dollar raise (oh, great inflation has been to us), shows him being conned into investing into a fake company with fake promises of ultra-wealth. It is important that as respectable and educated investors, we ensure we do not get taken advantage of by buying into deals that seem too good to be true. Stay clear of OTCC markets and Pink Sheet stocks, this is merely a large roulette table that offers too much risk.

This video really is impressive in how it shows the true and meaningful approach to investing. That is, investing a little bit, each month, will eventually grow into a valuable portfolio. This is the approach I plan to take, because I know it is reliable and realistic. Instead of risking my cash to get rich quick schemes, I’ll invest my money into something that will give me returns over a long period of time. Investing in companies only after I’ve thoroughly evaluated them, and go through my checklist of “acceptable” stocks.

Take a blast into the past by checking out this video, it will be humorous and insightful. I’m sure by the time you’re done watching it, you will realize how sometimes the simplest approach is the most profitable.