Book Review: The Richest Man in Babylon
The Richest Man in Babylon, written by George S. Clason is an interesting, relatively brief, and useful read that will educate those new to money management and wealth building and entertain those who already know a lot about building wealth.
Title: The Richest Man in Babylon
Author: George Samuel Clason
Publication Date: 1926
Genre: Financial Advice/Money Management/Wealth Building
Through a series of short stories and parables that take place in the once great city of Babylon, Clason teaches readers about saving, investing, and spending. The stories are short and engaging and help illustrate fundamental principles of money management and wealth building. Even though I already knew a lot about saving and investing and would consider myself a sophisticated reader when it comes to books on finance and money management, reading Clason’s The Richest Man in Babylon reinforced some principles in my mind and got me even more excited about saving and building wealth. It feels like the main strength of the book, beyond the basic financial principles that is espouses, is to put the reader in the right mindset for saving. Among the various things taught in this book are The Seven Cures for a Lean Purse and the Five Laws of Gold:
7 Cures for a Lean Purse
Start thy purse to fattening. Begin saving a portion of your income instead of spending all that you earn. This might seem almost too simple, but there’s magic in the boldness of beginning something. Soon you will see your purse and your savings grow and this will make you feel good.
Control thy expenditures. Controlling your spending is half the equation, because even if you earn a ton of money, if you spend it all you’ll still be broke. Control your spending and live below your means.
Make thy gold multiply. Once you start saving and have some money put aside, make the money work hard and earn more. Invest your money wisely so that your savings grow.
Guard thy treasures from loss. A lot of opportunities for investment will come along, but not all of these opportunities are worth your time and your hard-earned money. Security is a vital part of investing, so make sure your principal is safe. Additionally, consult with experienced, intelligent, and wise individuals so that you may learn from them and be guided properly in your investing.
Make of thy dwelling a profitable investment. If you always pay rent you will have nothing to show for it at the end of your life. If you pay a mortgage you will have a house to show for it at the end of your life. So, “own thy own home.”
Insure [Ensure] a future income. It is important to make sure that you have money in old age and that your family will be provided for in case of your demise. Saving diligently and purposefully for retirement and purchasing life insurance can help to protect yourself and your family.
Increase thy ability to earn. A person must set concrete goals and work hard to achieve them. These goals should be to both advance your position and to make yourself a more knowledgeable and wiser person. A person should also pay his or her debts, be compassionate, make a will, and take care of his or her family.
The Five Laws of Gold
1. Gold cometh gladly and in increasing quantity to any man who will put not less than one-tenth of his earnings to create an estate for his future and that of his family.
2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
5. Gold flees the man who would force it to impossible earning or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
These are just some of the many interesting things you will learn in The Richest Man in Babylon. Although the book proffers what many already agree with and understand, it provides excellent motivation to really move forward with wealth building and financial success.
The book is a quick read even though it is written in a somewhat artificially-archaic style in what seems to be an attempt by Clason to add some kind of ancient mystique to his work. It can be finished in less than a week and even less than a single day if one is so inclined. The book will likely earn a permanent place on your bookshelf and be a source of future inspiration when inspiration is needed. You’ll also likely end up recommending the book in the future to someone who is starting out or who wants to learn about wealth building and financial success.