The Richest Man in Babylon
The Richest Man in Babylon is a bit of a classic. It was published in 1926 by George S. Clason. You may have already read it or heard of it, perhaps you own a copy. It's written as a series of parables and is more like reading a good story than a self-help book.
It's enjoyable to read and is easy to understand. The concepts are simplified to a rudimentary level that one can easily relate to. The book is also fairly small; physically, the pages are not large, and my copy is only 194 pages. It can easily be read in a couple of hours.
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Chapter List
The book contains 11 chapters; here is the list for reference.
- The Man Who Desired Gold
- The Richest Man in Babylon
- Seven Cures for a Lean Purse
- Meet the Goddess of Good Luck
- The Five Laws of Gold
- The Gold Lender of Babylon
- The Walls of Babylon
- The Camel Trader of Babylon
- The Clay Tablets from Babylon
- The Luckiest Man in Babylon
- An Historical Sketch of Babylon
Introduction
For anyone with more than a basic understanding of personal finance and investing, most of this advice will be obvious. It still stands as a good reminder to review these concepts. It's a good introductory book to learn the basics about personal finance and is a good gift idea for teenagers and young adults.
These are two of my favorite quotes from the book, although there are plenty more good ones.
Money is plentiful for those who understand the simple laws that govern its acquisition.
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Money is governed today by the same laws that controlled it when prosperous men thronged the streets of Babylon.
Seven Cures for a Lean Purse
Chapter 3 is probably one of the most well-known portions of the book. It lists these seven important personal finance principles below.
- Start thy purse to fattening
- Control thy expenditures
- Make thy gold multiply
- Guard thy treasures from loss
- Make of thy dwelling a profitable investment
- Ensure a future income
- Increase thy ability to earn
These are timeless principles, including: save 10% of what you earn, limit your expenses, invest for compound interest, avoid get-rich-quick schemes and unwise investments, own your home instead of renting, save for retirement, and improve your knowledge and skills.
Hopefully, you're already doing all of these things. If not, try to start immediately!
The Five Laws of Gold
A second highly popular portion of the book is "The Five Laws of Gold" from chapter 5.
- Gold comes gladly and in increasing quantity to any man who will put aside not less than one-tenth of his earnings to create an estate for his future and that of his family.
- Gold labors diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
- Gold clings to the protection of the cautious owner who invests it under the advice of men wise in its handling.
- Gold slips 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 keeping.
- Gold flees the man who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
As I previously stated several times, these are not new or paradigm-shifting concepts. But they are timeless principles that you can apply now.
Other Lessons
These are three other quotes sprinkled throughout the book that I found memorable.
- "Men of action are favored by the goddess of good luck."
- "Better a little caution than a great regret."
- "Where the determination is, the way can be found."
Closing Thoughts
If you're an experienced investor and your personal finances are stable, you can probably skip reading this. As I said earlier, it makes for a great gift for young readers to establish a good basic financial education.