A renowned classic, The Richest Man in Babylon by George S. Clason, dispenses a multitude of financial advice. First written in 1926, folks have been delighted for nearly a century over this personal finance book.
This is much to do with it’s presentation, showcasing a collection of parables set 4,000 years ago in ancient Babylon. Although written nearly 100 years ago, many still feel the book is very applicable in the present day.
This is a summary of The Richest Man in Babylon, highlighting the best concepts and ideas we have got from reading it and we are also going to tell you whether it is worth reading the complete book.
Summary The Richest Man in Babylon
The parables throughout this book are majorly presented by a fictional Babylonian character, by the name of ‘Arkad’. Arkad is introduced as once being a mere poverty-ridden scribe, but through his determination, he became the “richest man in Babylon”.
At the time of the story, Babylon was famously known for being the wealthiest city in the world – assumably making Arkad the richest man alive.
Throughout the book, Arkad shares his advice on how to generate money and wealth, and also how to protect and invest wealth. He does this through what is referred to as the “Seven Cures” and the “Five Laws of Gold”.
Each of the Seven Cures and the Five Laws of Gold come with a particular message and advice – making up the first and longest parable within this book. The final chapters of this book feature three different, shorter parables – also holding great advice in terms of personal finances.
Main Concepts from The Richest Man in Babylon
The Seven Cures for a Lean Purse
Cure 1: ‘Start Thy Purse to Fattening’
Essentially, Arkad suggests saving 10% of your annual income to begin building wealth.
Cure 2: ‘Control Thy Expenditures’
Here, Arkad advises against unnecessary or luxury expenditures, that will ultimately be confused with necessities.
Cure 3: ‘Make Thy Gold Multiple’
This cure involves investing, then compounding that investments’ return into savings. Simply put, this is utilizing investments to create additional income.
Cure 4: ‘Guard Thy Treasures From Loss’
In this section, Arkad describes the importance of securing and protecting your investments. He advises against the use of get-rich-quick schemes, saying saving is better than risking finances.
Cure 5: ‘Make Thy Dwelling a Profitable Investment’
Arkad strongly advises purchasing your principal residence, as opposed to renting. This is due to the personal equity gained, instead of contributing to someone else’s. He also recommends utilizing your home to establish a business.
Cure 6: ‘Ensure a Future Income’
Arkad highly recommends considering the importance of having both a pension and future retirement income. He explains that this is something every person should strive to possess, but is often overlooked.
Cure 7: ‘Increase Thy Ability to Earn’
Lastly, Arkad strongly advises the constant pursuit of self-betterment, knowledge, etc. He explains that if you choose to continue progressing your skillset, you will increase your investment wisdom and therefore, your earnings power and overall wealth.
The Five Laws of Gold
The First Law of Gold; essentially, gold comes easily and at increasing quantity to someone willing to save 10% of their income for the future.
The Second Law of Gold; gold will earn more gold if you continuously invest wisely – do not take unnecessary risks.
The Third Law of Gold; gold will cling to the owner that invests it wisely, through the utilization of advice from wiser folks.
The Fourth Law of Gold; gold will slip away from you if you make uneducated or unwise investments – stay within your knowledge base.
The Fifth Law of Gold; gold will flee the owner that forces impossible earnings, especially through the utilization of financial schemes, gambling, etc.
The Gold Lender of Babylon, The Walls of Babylon, and The Camel Trader of Babylon;
The last few chapters of this book are broken down into three short parables entitled ‘The Gold Lender of Babylon’, ‘The Walls of Babylon’, and ‘The Camel Trader of Babylon’.
The Gold Lender of Babylon comes with the message of aiding friends financially. It’s explained that a wise lender will do so based on the guarantee of repayment, not the loan amount required. Also, the safest loans are made to those whose possessions are of more value, than anything that they desire.
The Walls of Babylon comes with a financial message. It’s posed as a stark comparison between the walls of Babylon, which protected its citizens from invaders for over 1000 years, and that of building your financial wall to protect you from unexpected expenses. Savings allow for protection against unexpected events like funerals, home issues, illnesses, etc.
Lastly, the Camel Trader of Babylon is a message about the importance of paying off debts, as opposed to borrowing. If you are spending more than you earn, you are submitting to self-indulgence. Intelligent savers will always put away 10%, commit seven-tenths of your earnings to meeting needs, and commit two-tenths of your earnings to paying debt.
Who Should/Shouldn’t Read The Richest Man in Babylon
This book is an excellent resource for anyone looking to better their financial situation. The advice presented is relevant and current, even though the book was written in 1926. Amongst the benefits of financial betterment from this book, readers can also look forward to the delightful parable presentation – bringing enjoyment to an otherwise statistic-based genre.
Folks who aren’t interested in the field of personal finances, may not find use in reading this book. Similarly, people who don’t enjoy the concept of parables, probably wouldn’t find amusement from the way this book is written.
Review of The Richest Man in Babylon
The Richest Man in Babylon is a light and refreshing take on a sometimes dry and overly analytic genre – which says a lot, considering when it was written. I found that the parable is presented with a multitude of lessons, characters and advice, making it a charmingly unique and interesting read.
Although some readers may not be particular fans of the parable style of writing, the fact that this book has been beloved for nearly a century, speaks for itself. While the book itself is dated, I believe that the advice and information presented to readers are not. It’s incredibly applicable to present-day financial situations, making it a valuable book in my opinion.
In conclusion, The Richest Man in Babylon by George S. Clason is an insightful personal finance novel, intertwined with a fictional parable. Despite the age of the book, it presents advice that is both relevant and applicable to any reader’s financial situation.
The parable allows for a lighthearted take on a seemingly dry genre, allowing for the fan base to expand. Regardless of whether you classify yourself as a wealthy individual or a person who struggles with finances, there’s something for you to learn within this book.
All of this makes The Richest Man in Babylon a more than worthwhile read.