How to build wealth while you are still a student – lessons from the richest man in Babylon

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how to build wealth while you are still young

Over the past year I have become  interested in learning how people become rich, more specifically I became interested in how people build wealth that can be passed on to future generations turning new money into old money. That is not something black people are very good at, but that is because we have not enjoyed the same opportunities in the past but that should change now. Before 2016 I had always been under the impression that one had to have a degree first or a solid job in order for them to start investing in their future and building wealth until I met a young businessman at the airport. He was in his mid 20’s and already owned a freight company and a farm, the guy had a degree in computer science and a degree in agriculture, the latter he used to secure funding when he came across an opportunity to purchase a farm. I am not going to say much more of this encounter other than the fact that I was inspired from that day onwards, this young black guy had managed to start his first business while he was still a student, unlike me at the time who used being a student as an excuse not to try out business ventures. He was doing well for himself but not super rich yet, but you could tell that he was onto something, wealth for someone who thinks like the guy at the airport is inevitable. Some people are just born with entrepreneurial spirit while others lack it and are full of excuses. How do you explain how people with the same background and the same opportunities never end up at the same point in life? Some will always be more successful than others. People have been trying to study this phenomenon since the beginning of time. Over the past year I have read dozens of books on success and wealth and in those books I started to notice a trend in their teachings. Those trends are best explained by telling you the lessons I picked up from reading a short book called the richest man in Babylon.

The book the richest man in Babylon teaches you that even though times have changed the methods of wealth accumulation have not changed.

How to start building wealth as a student:

1. Find a way to make money – find a job or income stream, it doesn’t matter what kind of job it is as long as you generate income. The best way to earn money is by using the skills you have e.g a university degree but before you graduate you have to find part-time jobs or a side hustle to make money. I know of guys who use the allowance they get from bursary funding to import laptops and sell them for a profit on gumtree and other such sites.
 2. Save 10% of your income – No matter how much money you get save 10% of it in a savings account. Even if you get just R1000 in a month save R100.
 3. If you have debt, use 20% of your income to pay of all the people/institutions you owe – this way you will eventually end up not owing anyone and that 20% can then be saved/invested.
 4. Use 70% of your income for all your monthly expenses – for food, clothing, rent etc.
Do not live beyond your means – it is better to buy things using cash you have saved up rather than buying using credit as credit means spending money you don’t have. Don’t live like someone who would be featured on top billing when you know you cannot afford it.
 5. Find a way to make the 10% that you save each month grow by seeking advice from qualified people, it’s not wise to fall for get rich quick scams (Ponzi scams) which will steal all your hard earned cash. This can be done by opening a savings account with a good interest rate, investing in shares in South African companies (this service is offered by banks and it is not that expensive, you could invest from as little as R150 a month or by using a lump sum investment at the end of each year to buy shares and/or gold). There are other investment opportunities but make sure to study up to learn about those investments and to seek out qualified people to advice you, one does not go to a magician to seek out investment advice.
 6. Protect your savings – do not risk your hard earned cash by falling victim to “black tax”, avoid borrowing money to people who are unlikely to be able to pay it back to you unless you are willing to give it away.

Those are the lessons I picked up about building wealth from the richest man in Babylon which were similar to lessons picked up from other books. These lessons are not for someone who wants quick money but for someone who wants to be well off in the future. The younger one starts following these steps the greater the reward and the sooner they will become wealthy. Other things that are noteworthy to becoming rich are hard work, self-belief and persistence when the times are tough.

I hope that this article will inspire you to start thinking about your future and motivate you to take action and start saving and investing. Subscribe to Sa Varsity Student via email or using twitter or Facebook.

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