6 Wealth Creation Principles From The Richest Man In History
Have you ever heard of Solomon? If not, you’ve probably heard of his father, David. You know, the David that dropped Goliath with a rock and a sling, and later became the second king of Israel.
This is the same David that saw a beautiful woman once bathing on her rooftop. Even though she was already married to one of his closest friends, he took her for himself, and then killed her husband to cover it up.
That woman was Bathsheba, who also happened to become Solomon’s mother. Solomon went on to inherit the throne of Israel from David. He became renowned, not only for his immense wealth, but his great wisdom.
National leaders would travel long distances to learn from Solomon. There was so much gold in Israel during his reign that silver became nearly worthless.
Many historians consider Solomon to be the richest man to have ever lived. If we convert his net worth to Aussie dollars, his fortune would amount to about AU$1 trillion. That would make Solomon more than10 times wealthier than the richest man in the world today.
It just so happens that Solomon was also a great teacher. He wrote countless proverbs and even penned a philosophical work on the meaning of life, called Ecclesiastes. As you might expect, he often taught about money and wealth creation through his proverbs.
Here are six timeless wealth creation principles from the Proverbs of Solomon, the richest man to have ever lived:
1. The Starting Point Of Wealth Creation Is A Long-Term Goal
“Where there is no vision, the people perish.” (Proverbs 29:18)
Solomon ruled Israel about 3000 years ago. How did people survive in his day? Unless you had the vision to sow seeds this year in order to reap a harvest next year, you didn’t. Survival depended on having a long-term goal.
I’m always greatly encouraged by our Property Apprenticeship students in their early 20’s who are already dreaming about financial freedom in their 40’s. I get jealous in fact, wishing I could go back to their age with the knowledge and perspective I have today.
But it’s never too late to start. Last year, The Atlantic published a piece called, “What Happens When We All Live to 100?” Google and other start-ups are investing a significant amount of cash into longevity research. Even at our current progress that experts claim with each passing year, newborns live about three months longer than those born the prior year, this means 40 is the new 20.
We’re all barrelling toward the day when we need to live off the income of our assets. Our only hope of avoiding the need to rely upon family or the government is to begin dreaming now and develop a vision for what our financial life will look like in 20 or 40 years.
2. Abundance Is The Result Of Following A Proven Plan
“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5)
Solomon here contrasts the diligent person who takes time to create a thorough plan with the hasty person who begins to take action without any forethought. One path leads to abundance, and the other to poverty.
This sounds a lot like Steve’s teaching in the Property Apprenticeship course on the difference between the asset approach and the outcome approach to investing.
Using the asset approach, investors rush out and acquire assets, assuming that all real estate goes up in value. In the end, this amounts to little more than speculation and reliance upon luck.
Using the outcome approach, you determine your objectives first, and then through careful planning and incremental goal setting, you strategically acquire the assets that most appropriately correspond to your desired outcome. The outcome approach harnesses skill, rather than luck, to create wealth.
3. Wealth Grows Over Time As You Spend Less Than You Earn
“The wise have wealth and luxury, but fools spend whatever they get.” (Proverbs 21:20)
Don’t you love how Solomon pulls no punches? If you spend all of your money without saving, he doesn’t just say you’re undisciplined. He says you’re a fool.
What does your monthly budget reveal about your character? Are you wise or are you a fool?
As Steve says in 0 to Financial Freedom, “The first and most important of all wealth creation laws is to spend less than you earn and invest the difference.” As you save consistently and wisely,and then use your investing skill to grow your money, eventually you will end up with what Solomon promises: “wealth and luxury.”
4. Debt Equals Slavery
“The rich rule over the poor, and the borrower is the slave of the lender.” (Proverbs 22:7)
If a fool spends everything he gets, what do you call a man who spends more than he gets? According to Solomon, you call him a slave.
The Merriam-Webster Dictionary defines a slave as, “someone who is legally owned by another person and is forced to work for that person without pay.”
In other words, the slave’s labour contributes to the long-term wealth creation goal of the slave-owner. The slave is doomed to forever trade his time for the privilege of remaining alive.
This is essentially the result of debt, even in our culture today. Our work not only represents our time, but also the creative output of our lives. What we get in return is money. But if we’re in debt, though that money flows to us first, legally it belongs to the debtor. If you don’t believe me, just stop paying your loans and see what happens.
The truth is, there’s a fine line between foolishness and slavery. If you’re spending every thing you get, you’re just one small step away from spending more than you get.
How well are you and your partner sticking to a written budget? What is the one small sacrifice you can make now to increase your current level of savings?
5. Wealth Creation Requires Persistent Hard Work
“Lazy people are soon poor; hard workers get rich.” (Proverbs 10:4)
“Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time.” (Proverbs 13:11)
I could quote at least a dozen other of Solomon’s proverbs on the same principle. Just read all of Proverbs 10 through 14 if you want more.
They all essentially communicate the same point. Lazy people want to get rich overnight without expending any effort. Even if they succeed temporarily, they fail in the end.
I have a good friend who was a drug dealer in his early 20’s. He had a profitable little “get-rich-quick scheme” going. He recently shared with me how futile the whole operation was. He couldn’t deposit his money in the bank. And he didn’t know what to do with it anyway, so he blew it. He would spend hours at the pokies shoving bills into a machine.
Work helps us to value our money. Those who work hard show the evidence of their commitment to their long-term goal by the action they are willing to take to achieve it. As they watch their wealth grow over time, they are also building the character required to hold onto it.
Nearly every single person I’ve coached in Steve’s Property Apprenticeship course felt like giving up on the dream at some point. In fact, some of them have. The ones who haven’t given up all possess this trait that Solomon speaks of in his writings. Regardless of setbacks, they persevere and keep working hard toward their goal. Their consistent effort proves their deep commitment to the desired outcome.
6. Staying Wealthy Requires Integrity And A Sense Of Justice
“Wealth created by a lying tongue is a vanishing mist and a deadly trap.” (Proverbs 21:6)
“Whoever gives to the poor will lack nothing, but those who close their eyes to poverty will be cursed.” (Proverbs 28:27)
In these two proverbs, Solomon calls out both the liar and the ungenerous. He says both will gradually move farther away from prosperity. Their character and their actions repel wealth.
The liar may acquire riches for a time, but it will eventually vanish. Similarly, those not moved by the need of the poor should expect to be cursed. They should expect their future to be worse than their present.
The ancient Hebrew people who Solomon led were clear that there is a higher meaning to life than acquiring assets. They believed that some things are more important than the long-term financial goal.These two proverbs teach us that what matters more than money is people.
Why should we act with integrity in our business dealings? Why should we have a sense of justice and concern for the less fortunate? We should be both honest and generous, because people have value. People matter more than money.
Growing up, I watched someone very close to me repeatedly value money over people. He lied and he stole to achieve his financial dreams. He was very wealthy for a season, but in the end he lost it all, and he died before his time.
Your integrity and sense of justice puts you on the positive end of the law of sowing and reaping.As you tell the truth and treat people fairly in business, even when it seems like a sacrifice, you are attracting wealth. When you give to those in need, you’re sowing seeds that will bring you a financial harvest in the future.
Besides, as a very wise person once said, “You’re far happier giving than getting.”