"Gold in a purse is gratifying to own... but it earns nothing."
In the first two cures, you learned to Save 10% (Pay Yourself First) and Control Expenses (Budgeting). Now, imagine you have done this for a year. Your bank account has ₹1 Lakh.
You feel proud. You feel rich.
But Arkad (The Richest Man in Babylon) has bad news for you. He says: "Gold in a purse is gratifying to own and satisfieth a miserly soul, but it earns nothing."
If your money is sitting idle in a box (or a Savings Account), it is dying. This brings us to the Third Cure: Make Thy Gold Multiply.
1. The Invisible Enemy: Inflation
In 2026 India, we have a silent thief called Inflation (Mehangai). It steals about 6-7% of your money's value every year.
The Math of Poverty:
• You keep ₹1 Lakh in a Savings Account.
• Bank gives you 3% interest (₹3,000).
• Inflation eats 7% value (₹7,000).
• Result: You actually LOST ₹4,000 in purchasing power.
Keeping money "safe" in a bank is actually risky because it guarantees that you will get poorer over time. You must make your gold work.
2. Treat Your Money as Employees
Arkad gave a beautiful analogy: "Every gold piece you save is a slave to work for you. Every copper it earns is its child that also works for you."
Imagine your ₹1 Lakh is not paper; it is an Army of 1 Lakh Soldiers. If you lock them in a room (Bank Locker), they sleep. They do nothing.
But if you send them to the battlefield (Market/Business), they capture enemy soldiers (Profits/Interest) and bring them back. Now you have 1.1 Lakh soldiers. Next year, these new soldiers will also fight for you.
This is called Compounding. Your money must earn babies, and the babies must earn grand-babies.
3. Vehicles of Multiplication
Arkad lent money to shield makers. Today, we have modern vehicles to multiply wealth:
- Mutual Funds (SIP): The easiest way for Indians. Invest in the top 50 companies (Nifty 50). Historically, they beat inflation by a wide margin (12-14%).
- Stocks: Buying ownership in great businesses (like Tata or Reliance). As the business grows, your wealth multiplies.
- Real Estate (REITs): Earning rental income without buying a whole building.
The Goal: Create "Passive Income." Your money should make money while you sleep, travel, or play with your kids.
4. The Third Cure
Arkad’s advice is timeless:
"Put each coin to labor that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse."
Wealth is not the cash in your pocket. Wealth is the Income Stream that refills your pocket automatically.
Key Takeaways
- Don't Let Money Sleep: Idle money is losing money. Invest it immediately.
- Beat Inflation: Your investment return must be higher than the inflation rate (Target 10%+).
- Reinvest Returns: Never spend the interest. Let the "children" of your gold earn more gold.
Frequently Asked Questions (FAQ)
Q1: Is Fixed Deposit (FD) a good investment?
A: FD is for safety, not for wealth creation. Post-tax returns of FDs often fail to beat inflation. Use FDs only for emergency funds.
Q2: What is Passive Income?
A: Income that comes without active work (e.g., Dividends, Rent, Interest). It is the key to financial freedom.
Q3: Is investing risky?
A: Not investing is riskier. Inflation guarantees you will lose money. Investing gives you a chance to win. Manage risk by diversifying.
Up next: Part 6 – The 4th Cure (Guard Thy Treasures from Loss).
📚 Credit & Disclaimer:
This post is a summary based on the classic bestseller "The Richest Man in Babylon" by George S. Clason.
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