the richest man in atherstone

Having got my paperwork straight, I now have more of an idea of where I stand financially. Below is a quick rundown of what I have at the moment:

I have the following assets:

• Current account - £4607.69
• Mortgage ISA - £4140.66
• House - £100'000 (my valuation)

Thats a total of £108'748.35.

They are offset by the following liability:

• Mortgage - £46'000

Leaving an equity of £62'748.35.

Discounting my house and mortage, my equity is just the money I have in my current account. This four and a half grand is all I have to show for the previous ten years of my life. It is a little disappointing, really.

In The Richest Man in Babylon, Clason discusses seven cures for a lean purse. The first is 'Start thy purse to fattening'. This law is also discussed in just about every other chapter in the book, therefore stressing its importance. Clason recommends that at least 10% of a person's earnings should be saved. However, rather than using the term 'save', he actually refers to it as 'paying yourself'. The 10% that you pay yourself should be treated like any other bill or expenditure. In fact, it should be given priority over other expenses. There is no excuse not to put this money away for yourself. If affording it is a problem, you need to make cutbacks in other areas.

From this day forward, I will abide by this rule in earnest and save at least 10% (£200) of my monthly salary. Throughout my life thus far I have kept my savings in my Lloyds TSB current acount. This isn't too bad as it pay a good interest rate (4% AER) and I've been more than happy with the customer service I've recieved over the years. But now I think it would be beneficial to open a savings account to keep my savings separate from the money I will use for my monthly living expenses. This will also stop me dipping ino it by accident. So, my next task is to find the best savings account for my circumstances. I'll update when I've found it.

I lasted an hour since my previous post before smoking again. I feel a complete failure. Why do I not have control over my own mind and body? More than anything else I feel weak. How can I achieve anything in my life including my quest for wealth, if I can't beat my addiction to nicotine!

I'm not going to quit today. I don't feel like I'll ever be able to quit. It's quite depressing really. I'm sure I'll pick myself up and try again in the future. I don't know when that will be. All these negative feelings make me want to smoke more.

Well, I’ve been up for an hour and had 2 fags already! I failed. Well, maybe I just lapsed. It’s 7:55, now so after this cigarette, I’ll try again.

Going through my paperwork, I came across two NS&I Ordinary Account books. One had £28 in and the other, £1. I sent them off to be cashed in and the accounts closed. I recieved a couple of warrants which have been duly cashed and deposited in my current account.

The interest rates for these accounts are poor (I actually get a better rate for my current account) so that is where the money will sit until I decide what to do with it.

£29 is not a lot, I know, but every penny counts.

Following the nightmare I had organising my paperwork, I decided to follow-up a pension that i contributed to between the years 1998 to 2002. Admittedly I wasn't earning a lot at that time and didn't really understand what pensions were for when I signed up for it. I was young and my parents advised me to do it, so I did. When I changed jobs in 2002, I elected to opt out of a pension because I wanted more money for myself.

Happening across some paperwork for the pension, I wondered if I could cash it in and put the money towards some other type of investment. I would prefer to be rich long before I reach retirement age and recent news about the poor returns of company pensions have put me off them a bit as an investment vehicle.

My benefit statement for 2005 states that I would get a lump sum of £3'400 and a yearly pension of £1100 plus £500 per annum for my wife.

I wrote a letter to the pension provider stating my intentions, however the reply was negative. Apparantly I cannot liquidate the pension and have only two options:

• Wait until I am 60 and use the pension for its original purpose
• Defer the the benefits to another pension scheme

Never mind. It was worth a try. I have learnt a valuable lesson by doing this: I should not invest money in something I do not understand.

I also feel I've learned a lot more about pension schemes. I didn't really understand them before but now I have a basic knowledge of their advantages and disadvantages. The most important advantage is that you can contribute to your pension straight from your paycheck, before the taxman has chance to get his grubby hands on it. The main disadvantage is that you can't get your hands on the cash until you reach retirement age.

I don't regret investing in a pension. If I hadn't put cash in there it would have only been spent on booze, fags and gadgets anyway! I'm older now and I like to think a little wiser and I know that when it comes to investing money again, I won't go about it willy-nilly. I'll find the best products available and understand them inside-out before I hand over the dough.

I've never been very organised and this was highlighted to me yesterday as I tried to go through my paperwork to see exactly where I stood financially. Going through my big box of statements, policies, bills etc. proved very difficult because of the random manner with which they had been thrown in. Not only that but pages of documents were missing and some were even torn into multiple pieces (i'll blame the kids for that one).

I decided I had to create a system. I bought a proper filing box and neatly filled in the labels to sort the paperwork into multiple categories (banking, savings, bills etc.)

On top of that I scoured the Internet for some software that I could use to keep my finances documented. I came across a great financial package called GNUCash. It is a computer-based double entry book-keeping package and, most importantly, it's open source software so doesn't cost anything. The downside for most is that it only runs on computers that have a Linux Operating System so if you have Windows, unfortunately you can't use it.

Not having a clue about double entry book-keeping I spent a couple of hours reading through the manual which made it a whole lot simpler to understand. The great thing about this application is that I can pull off financial reports such as what my biggest expenses are or my monthly profits. Of course, this means I have to feed each transaction into GNUCash but the ease of use of the application makes it far from time consuming.

So now all my paperwork is neatly organised in a proper filing box and each monetary transaction is recorded in GNUCash for prosperity. As long as I keep on top of things, I won't hasve to spend half a day sorting through paperwork again.

Let me introduce myself. My assumed name is Arkad and I am a 26 year old married man with 2 children earning £24'000 per annum as an IT Consultant in the United Kingdom.

I have a deep desire to become a rich and wealthy man. I want financial freedom. I want to choose to work, not feel forced into it. Don't get me wrong - I'm not lazy. When I decide take on a project I am 100% committed to seeing it through to the end to the highest possible standards. The problem is I want to be able to choose what I do rather than having to do it to keep a roof over my family's heads. I want to be able to spend the afternoon with my kids just because I feel like it. I don't want to worry about being made redundant or how I am going to afford a family holiday.

I own my 3 bedroomed terraced home (well, I will when the mortgage is paid) but apart from that, I have little in terms of assets. My savings amount to around £3000 which isn't really a lot to show for 10 years of labour!

Recently, I have read many books on the subject of personal finance but none have inspired me more than The Richest Man in Babylon by George S. Clason. This book offers brilliant advice on how an average man can make a future for himself and his family and become wealthy. The advice is described in a plain and simple manner using stories/parables to illustrate the key points of each chapter. The rules are so simplistic that, in my opinion, they are ingenious.

I feel so galvanized by reading this text that I have decided to devote the next 5 years of my life testing the advice of the book. I will live according to the laws laid out in Clason's book as a real-life experiment to see whether they work or don't. This blog is the documented account of my project.