In this blog post, I provide a summary and review of The Richest Man In Babylon by George S Clason. This book is arguably one of the most inspiring books on wealth ever written and provides great insight into how to build and keep wealth.
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To help me on my journey to financial freedom, I’ve been reading different books on personal finance. I did a post on my Instagram stories last month asking for recommendations of personal finance books, and The Richest Man In Babylon was mentioned a few times. I had attempted to read this book last year, but the old English writing style put me off so I didn’t make it past chapter one.
Fast forward to last month, and following all the recommendations received, I decided to give the book a second chance. I’m so glad I did! This book is arguably one of the most inspiring books on wealth that I’ve read. It provides great insight into how to build wealth, and more importantly keep it.
If you haven’t got time to read the whole book, have a read through my summary below. I made notes on the key points discussed in each chapter.
The Richest Man in Babylon by George S Clason, discusses the secrets of wealth used by the ancient civilisations of the world. The book deals with different areas of finances including how to plan financially for your life, how to deal with your personal wealth and finally how this impacts your life.
This chapter tells the story of Kobbi and Bansir. Bansir is complaining that he works so hard yet never has any riches to show for it. They talk about how much gold they had earned over the years, yet they had nothing left to show after all their years of labour as they had spent the gold to live. Kobbi and Bansir discuss how they had both hoped that they may one day become rich, but it never happened to them. They decide to approach one of their childhood friends, Arkad, who was known as ‘The Richest Man in Babylon.’
“Time is something we all have in abundance yet many of us let it slip through our fingers.”
In this chapter, Kobbi and Bansir meet up with Arkad. Arkad tells Kobbi and Bansir that the reason they have failed to accumulate wealth may be because they have failed to observe the laws that govern wealth. Arkad found his road to wealth when he decided that a 10th of all he earned was his to keep. It’s not about how much you earn, it’s about how much you keep. Always pay yourself first. Every money you earn is a slave to work for you. No matter how much or how little you earn always pay yourself first.
3 Laws of handling wealth from Algamish the original richest man In Babylon
1) Live on less than you earn
2) Seek advice from those that are competent through their experiences to give it
3) Learn how to make money work for you
In this chapter, King Sargon is worried about the city as it is getting poorer and he seeks the advice of Arkad. Arkad tells the King his own story and teaches the King the 7 secrets for a lean purse.
For every 10 coins you put in your purse take out 9 and leave 1. Eventually, the purse will become fat. More money flows to you when you don’t spend all you have.
Budget your expenses. Your necessary expenses will always grow to the same amount as your income unless you tell it otherwise. Don’t confuse expenses with desires. We have more desires than our earnings can gratify. Budget necessary expenses. Keep 10% for yourself, all the desires outside of your budget leave them. keep adjusting your budget. The budget will help fatten your purse.
Put your gold to work so it can reproduce more of its kind. An income stream that comes weather you work or travel. Passive income is what true wealth is. Make your money work for you.
Learn to protect the small amounts before you get larger amounts to manage. Study carefully before making investments. Don’t borrow money to people that won’t repay you. Don’t let the desire to make money quickly make you make foolish financial decisions and investments. Consult the wisdom of those that have done it before you as they usually are willing to share this info freely. Invest only where it’s safe, and accessible when needed.
Every man should own his own home. This reduces your cost of living and means more of your money is yours to keep.
Make preparations for a suitable income for years to come, for when you’re old and less able to earn. Provide in advance for the needs of your growing age and protection of your family.
A strong desire to earn more is important and tangible. Press this until fulfilment, and you’ll train yourself to accumulate wealth. Desires must be simple and definite. Perfecting yourself in your calling will increase your earning potential. You will earn more with persistent effort and increasing your skills. Learn more of your craft and you’ll be rewarded financially.
“The more you learn, the more you earn”
In this chapter, Arkad is addressing the King’s chosen 100. He is asked if it was possible to encourage luck in life as everybody has the desire to be lucky.
Good luck is down to opportunity. It comes knocking and some people miss out on it. You need to move when the opportunity becomes available. You need to overcome procrastination if you’re going to acquire riches. To attract good luck, it’s important to take advantage of opportunities. Good luck can be enticed by accepting the opportunity. Action will lead to the successes you desire.
“You have to be ready for an opportunity before the opportunity comes”
Old Kalabab asks his group of men, if they were offered either a large bag of gold or a tablet inscribed with wisdom, what would they choose. All the men chose gold. Old Kalabab told them that this is what wild dogs would do – feed today without worrying about tomorrow. He goes on to tell them about Nomasir, Arkad’s son. Nomasir was given gold and wisdom by his father, to prove that he could be trusted with money. He returned 10 years later to claim his father’s estate as he had been promised, and told his father how at first, he had lost the gold, but then used the wisdom to make his own fortune. Nomasir told Old Kalabab the 5 laws of gold that his father had taught him.
1) Gold comes gladly and in increasing quantities for any man that would put aside a 10% for his future and family.
2) Gold works for its owner who uses it wisely, it is a willing to multiply itself.
3) Gold clings to a wise investor.
4) Gold slips away from the man who invests in an area he doesn’t know, isn’t skilled in, or hasn’t sought the wisdom of an expert in that area
5) Gold flees the man who would force it to impossible earnings or who follows the advice of tricksters and schemers, or who trusts it to his own inexperience and romantic desires in investment.
Wealth comes and goes quickly to those that don’t understand the principles of gold. True wealth grows slowly over time.
Rodan the spear maker here finds himself with 50 pieces of gold. He seeks advice from Mathon the Gold Lender, as he does not know what he should do with it. Mathon tells Rodan about the types of loans that he can give people. Some of these are based on property, some are based on income and some are based on the guarantees of friends and family.
If you desire to help a friend, do so in a way that does not bring your friends burden on your head.
The safest loans are to those whose possessions are of more value than the treasures they desire. The wise lender lends based on the guarantee of repayment and not on the actual loan amount required.
Banzar, a warrior who guarded the passageway to Babylon, was the first person to tell of news when the city was surrounded. The villagers ask Banzar for news, and he consoles them. Banzar kept guard day and night and watched the enemies of Babylon try to break into the city. After 3+ weeks the defences of the city proved how good they were and the attackers were defeated. Banzar uses this to show the citizens that he had been proved correct, and that Babylon had been strong enough to withstand the force of all the armies of the enemy. Banzar uses this to illustrate the strength of the city.
Tarkad owes money to people and hasn’t eaten for two days. He comes across a friend of his, a camel trader named Dabasir. Dabasir asks for the money he is owed by Tarkad. He tells Tarkad of the time he used to be a slave in Syria. Dabasir had many debts, and he told Tarkad that no man who did not repay money could ever respect himself, so in effect, he gave himself the soul of a slave.
He told how he had run from Babylon away from his debts after he had made wrong decisions about money, and how eventually he was captured and taken as the slave of a Syrian. The wife of the man who owned him took pity upon him and gave him the opportunity to escape.
He took camels and ran out of Syria and into the desert, and while he was exiled he had an epiphany. Although his debts may have been his enemies, he had true friends in Babylon who he wanted to repay. He returned to Babylon to face the people he owed money to and begged them to be patient while he worked.
The moneylender Mathon helped him to find a job tending camels, and he worked hard and repaid all his debts. He tells all this to Tarkad and he can see what a difference his words have made to Tarkad, and knows that Tarkad wants to follow his example and work to get himself out of debt.
“Where the determination is, the way can be found.”
The five tablets containing the secret to wealth are discovered in Mesopotamia. Alfred Shrewsbury, an archaeologist, reported the findings on the tablets to Professor Franklin Caldwell. This chapter deals with the letter that he wrote, and what the tablets contained. The tablets told the story of Dabasir’s return to Babylon and the plan that he followed to repay his debts and start his life over again. Alfred writes to Professor Caldwell and tells him that he and his wife have started to follow the lessons detailed in the tablets, and even though the tables were thousands of years old he found the lessons helped him in life.
Here we meet Sharru Nada, who is travelling with the grandson of his partner, Hadan Galu. Sharru tells Hadan that he was once a slave and that he counted himself as hugely lucky as he was sold to a baker, and he was so happy to be able to learn the trade of a baker. He told Hadan that his grandfather had also been a slave, but who was close to buying his freedom. When Sharru and Arad, Hadan’s grandfather, met next, Arad had been freed and Sharru had been sold to another master. Arad bought Sharru’s freedom, and this story touches Hadan’s heart. Hadan from that moment on decides that work truly is the only key needed to his future successes.
This concludes my not so short summary of The Richest Man In Babylon. It really is a great book and my summary doesn’t do it justice! My favourite concept and lesson from the book is to always pay yourself first. It’s easier said than done, but I’m working towards being able to pay myself 10% of all the money I earn.
Have you read this book? What are your thoughts on it? How did I do with my summary? I would love your feedback.
If you enjoyed this post, ‘Book Summary – The Richest Man In Babylon’, then you will also enjoy my other book reviews below:
Wife and mum of three boys on a journey to achieve financial freedom. Earn more, spend less and invest the difference.