My friend and mentor, Charlie, is now deceased.

But, I can still remember meeting the richest man in my hometown and having long discussions with him about how to make money.

It took me some time to gather the courage to come out and ask Charlie how he made his fortune. When I did, I was surprised at the answer.

I was expecting to hear some “mystical secret”.

I was expected to have a “eureka moment.”

Instead, Charlie reached into his desk and pulled out a tattered paperback book entitled:

I thought to myself “Great. I have a law degree and a finance degree. I need facts and strategies. What I don't need is this nasty, old, crappy book.”

Charlie said to me, “Every dime that I have made during my life was based on the advice in this book. If you follow the advice, you will become rich.”

I took it home and set it on a table.  I saw it everyday for the next week.  Finally, I picked it up and reluctantly read it.

It changed my life.

Part of what I learned, I am going to share with you today.

Modern financial planners call this “paying yourself first.”

In order to do it, you must learn to live on less than you earn.

The best way to do this is to take advantage of automatic savings programs that automatically deduct a portion of your paycheck and place it into a savings and investment plan.You never see the money so you never really miss it.

If you are self employed, you have to be a bit more disciplined.Have a certain amount debited from your bank account and placed into an investment account.

The important thing is to save a portion of everything that comes into your possession first.

What?

You can’t save ten percent?

How about five percent?

Okay, how about a lousy dollar a day.

Stick it in one of those large plastic water cooler bottles.

Just stick something in it everyday.  Quit making excuses.

Look, I paid for my first year of law school with the pocket change I saved over the preceding six years.If you want something bad enough, you'll do what it takes to make it happen.

When I first began seeking the advice of wealthy men in my community, I was surprised at how eager they were to give it.

It seems that wealthy men enjoy the company of people who are eager to learn to make money. I think part of it comes from the desire to brag about their achievements, but a portion comes from a desire to pass along the wisdom accumulated during a lifetime of entrepreneurial skill to someone who will appreciate it.

But, these wealthy mean and women will not seek you out to impart nuggets of wisdom.

You have to find them and ask them.

What's the worst that could happen?  They'll say "No"?

In my experience, that has never happened.

If you think about it, you have access to someone who is wealthy and willing to share his or her “secrets.” Perhaps he is your neighbor, your relative, a fellow church member or a co worker.

But have to ask, be willing to listen, and follow the recommendations of these mentors without fear or reservation. 

Today, with interest rates being nearly zero, it is difficult to find safe ways to make your money work for you.

Nevertheless, these opportunities are out there.

I am often reminded of the maxim that “….those who understand compound interest earn it, those who don’t – pay it.”

Compound interest can be the investor’s best friend or the debtor’s worst enemy. If you save a portion of what you earn, you will be able to use the power of compound interest to grow a small amount of money into a large fortune over time.

If you couple your commitment to saving with seeking the wise counsel of wealthy people in your community, you will often find out about "inside investments" in your community that will offer safety and a handsome return on investment.

I purchased my first income producing commercial building in 2003.

Not only did Charlie help review the investment with me, he even arranged to have a friend at the local bank loan me over $200,000 to purchase the property even though I did not have any credit or the balance sheet to back the loan.

I simply had to come up with the down payment out of what I had saved.

I made my money work for me and have reaped a substantial return on my investment over the last several years even with the recent real estate crisis.

My tenants keep paying rent and soon I will own the building (and the stream of income it produces) free and clear.

Most people never learn that the only way to become wealthy is to save a portion of everything that they earn.

In fact, today most people not only fail to save a portion of what they earn, they actually spend more than they earn and go into debt.

The Richest Man In Babylon teaches the following principles:

1. A Part Of What You Earn Is Yours To Keep (Pay Yourself First)
   
2. Save At Least A Tenth Of Everything You Earn (Save The First 10%)
   
3. Seek The Counsel Of Those Skilled In Investing (Find A Mentor)
   
4. Make Your Money Work For You (Purchase Passive Income Investments)

Follow these principles, and you can be like my friend Charlie, the richest man in Babylon.