Main ideas
Babylon became the wealthiest city of the ancient world because its citizens were the richest people of their time. They appreciated the value of money. They practiced sound financial principles in acquiring money, keeping money and making their money earn more money.
The man who desired gold
Wealth often eludes us because, even though we desire it, we don’t take the necessary steps to achieve it.
Throughout our lives, we have all accomplished a lot. Big things or small things, we accomplished them because we took the right steps and put in the right effort. We didn’t just wish to graduate high school, get our dream job or learn a new skill; we took action to make it happen.
Thou makest me to realize the reason why we have never found any measure of wealth. We never sought it.
The richest man in Babylon
The road to wealth is easy to find once you decide that a part of all you earn is yours to keep: the idea of paying yourself first. Wealth requires you to learn how to acquire money, how to keep it, and how to use it.
Grow your wealth by learning three lessons:
- Live on less than you earn.
- Seek advice from those competent to give it.
- Make gold work for you.
Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow.
Seven cures for a lean purse
Everyone can learn how to accumulate gold and become rich and prosperous, but no one can build wealth without first mastering each step.
- Start thy purse to fatteningFor each ten coins put in, spend but nine.
- Control thy expendituresBudget your expenses so you have coins to pay for your necessities, your enjoyments and your worthwhile desires, without spending more than nine-tenths of your earnings.
- Make thy gold multiplyPut each coin to work, so it can reproduce like the flocks of the field, and bring you a stream of income that flows constantly into your purse.
- Guard thy treasures from lossInvest only where your principal is safe, where it can be reclaimed if needed, and where it will reliably earn a fair return. Get advice from those experienced in the profitable handling of gold.
- Make of thy dwelling a profitable investmentOwn your own home.
- Insure a future incomeProvide in advance for the needs of your later years, and the protection of your family.
- Increase thy ability to earnCultivate your own abilities: study and become wiser, become more skillful, and act in a way that lets you respect yourself.
Meet the goddess of good luck
Luck isn’t something we stumble upon. Luck is created.
Good luck waits for those who accept opportunity. To attract good luck, you have to put yourself in a position to take advantage of an opportunity when it arises. Taking action leads to the success you desire.
Men of action are favoured by the Goddess of Good Luck.
The five laws of gold
Building wealth is a slight burden on the thoughtful person. Bearing that burden consistently, year after year, is what it takes to reach the final goal.
- Gold comes gladly, and in increasing quantity, to anyone who puts aside at least one-tenth of their earnings to create an estate for their future and their family’s.
- Gold labours diligently and contentedly for the wise owner who finds it profitable employment, multiplying like the flocks of the field.
- Gold clings to the protection of the cautious owner who invests it under the advice of people wise in its handling.
- Gold slips away from those who invest it in businesses or purposes they aren’t familiar with, or that aren’t approved by those skilled in keeping it.
- Gold flees the person who tries to force it to impossible earnings, who follows the alluring advice of tricksters and schemers, or who trusts it to their own inexperience and romantic notions about investing.
Wealth that comes quickly goeth the same way.
The gold lender of Babylon
Lending money is easy. What’s difficult is getting it back when it’s been lent unwisely. When you want to help a friend or family member, do it in a way that doesn’t bring their burdens onto yourself.
Don’t be swayed by the fantastical plans of impractical people to force unusually large earnings from your money. If it sounds too good to be true, it likely is.
Better a little caution than a great regret.
The walls of Babylon
Thousands of years ago, the great walls of Babylon protected the city, its citizens and their riches from their enemies. The wall around the city was the only protection against the unexpected.
Today, protection from the unexpected comes in the form of insurance, savings accounts, emergency funds and dependable investments. Don’t overlook protection when planning for the future.
We cannot afford to be without adequate protection.
The camel trader of Babylon
Each of us has everything we need to be anything we want to be. The path isn’t always obvious; it’s something we have to discover for ourselves, and work towards consistently.
That discovery comes from determination: wanting something badly enough to pursue it no matter what. Determination can lead people out of difficulties and into the success they seek.
Where the determination is, the way can be found.
The clay tablets from Babylon
We tend to believe the fun is in spending, but the real fun comes from accumulating money you don’t want to spend. Following a financial plan, even a very simple one, can be the difference between staying where you are and ending up where you want to be.
A very simple formula for your income could be:
- 70% Base your lifestyle on this.
- 20% Pay off your debts and save.
- 10% Invest this for your future.
The luckiest man in Babylon
Hard work is your best friend when it comes to building wealth. If building wealth were easy, we’d all be rich, but that’s far from the reality we live in.
Hard work should be enjoyed; it should be meaningful and purposeful. It can help you make more money. It can help you be better prepared when opportunity comes along. It can teach you the value of something. It can let others see the value in you. And it can align your priorities and values with what’s really important.
With enough time, hard work can take anyone anywhere. From the outside, it might look like luck. But when you work hard to achieve what you really want, you know it was anything but.
Final thoughts
The Richest Man in Babylon is a short book, but full of timeless lessons about personal finance. Set in an ancient city thousands of years ago, and written in 1926, its lessons are just as relevant today as they were back then, and as they’ll continue to be in the future.
If you’re looking for a first finance book, or want to reinforce your financial knowledge with a book of powerful stories, The Richest Man in Babylon might be exactly what you’re looking for.
All ideas, quotes and illustrations are borrowed from or based on The Richest Man in Babylon by George S. Clason.
