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The Richest Man in Babylon by George Clason Book Review: Profile Traders

Every human who has walked this planet yearns for a secure, hassle-free, and abundant future.


Most of us keep yearning for it for the lack of personal finance management. This book will not pinch you for your time but will leave you with some simple personal finance management ways you don't want to miss.


The Richest Man in Babylon By George Clason Book Review

The Man Who Desired Gold


George starts with a fascinating story of a chariot maker Bansir of Babylon, who wants to become wealthy. He seeks the advice of Arkad, the richest man in Babylon, who coincidently is an old friend of Bansir and Kobbi.

Arkad explained to his friends that they have either failed to learn the laws that govern the building of wealth or do not observe them. They cannot rely on fickle fate to bring them wealth. The book is filled with life lessons said through short parables.

Lessons to Learn


The highlight of the entire book that revolves around the importance of paying yourself first is explained. Arakad learned this when he was a laborer. He learned to save 10% of his earnings and allow it to earn further.


Another lesson he learned was to have every part of his saving earned for you. The laws of compounding are explained in layman's language that you won't need a Ph.D. to understand.

An Old and Experienced Man's Wisdom


Arkad benefitted not only from the land he agreed to take care of for the old man. He also learned some valuable lessons that he applied.

  1. Live upon less than you could earn. Spend no more than what you are left with from your earnings after you have paid yourself first.

  2. Seek advice from competent people to give it through their experiences.

  3. Make gold work for you.


Be Reasonable and Practical


Be careful not to start with difficult and impractical tasks. Humans tend to give up soon if they tire themselves too soon. Love leisure instead. Would you be able to live at leisure when you paid yourself 50% of your income when you started to save?


No right? The 10% pay yourself first way will still get you there by the end of the 5th month.


Wealth grows wherever man exerts energy. A vast palace built by a rich man pays out some to the brickmaker, the laborer, and so on. Once completed, even the building derives its paid worth, and so is the land it stands on.

Cures to Fatten Your Purse


In the narrative, even the King of Babylon calls on Arkad to transfer his knowledge to the ordinary person. The King wanted every man in the city of Babylon to learn to build their riches.


In the simplest of ways, the author explains the seven cures of a lean purse. These simple personal finance lessons can still stand the test of time.

  1. Start thy purse to fattening - Save no less than 10% of your income to pay you first.

  2. Control thy expenditure – Don't burden yourself with more desires than you can gratify.

  3. Make thy gold multiply – The earnings from the 1/10th you save will build your fortunes. Wealth is not built from just savings but from the income it creates.

  4. Guard thy treasures against loss – The first sound investment principle is to secure the principal. The penalty of risk is possible loss. Don't be lured by larger earnings that come with larger risks.

  5. Make thy dwelling a profitable investment – Own your own home, significantly reducing the cost of living and making more of the earnings available to gratify other desires.

  6. Ensure a future income – Arkad describes what we call a systematic investment plan (SIP) that will grow in value along with more contributions as time goes on.

  7. Increase the ability to earn – The man who seeks to learn more of his craft shall be richly rewarded.

How to Entice the Goddess of Good Luck?

"If a man be lucky, there is no foretelling the possible extent of his good fortune. Pitch him into the Euphrates and like as not he will swim out with a pearl in his hand." —Babylonian Proverb.

It is in the Temple of Learning of Babylon that the following parable is set. Arkad, in his usual self, explains people look to entice the Goddess of Good Luck in the wrong places she frequents. They look to get lucky at gaming tables, horse races, or for that matter, just to find a lost wallet. How often does that happen?

He further says he felt the Goddess of Good Luck is a Goddess of love and dignity. As he explains to people to be more practical, he says the Goddess aids those who are in need and rewards those who are deserving.


Thus, stressing the need to be realistic enough. Practical enough to look up to the Goddess of Good Luck to shine upon you when you toil.

The Five Laws of Gold


The laws of gold are words of wisdom from the experienced. The youth seldom listen to them when told by the old or experienced. They for sure learn this from nature, which the author wanted to convey.


1. Gold comes gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.


2. Gold labors diligently and contentedly for the wise owner who finds for its profitable employment, multiplying even as the flocks of the field.


3. Gold clings to the protection of the cautious owner who invests it under the advice of men wise in its handling.


4. Gold slips away from the man who invests it in businesses or purposes with which he is unfamiliar or not approved by those skilled in its keep.


5. Gold flees the man who would force it to impossible earnings, who follows the alluring advice of tricksters and schemers, or who trusts it to his inexperience and romantic desires in investment.

Conclusion


If you picked up this book expecting fancy formula on personal finance, you would be highly disappointed.


This book brings forth personal finance in the simplest forms. It urges us to keep it simple rather than complicate things for ourselves.


To read more such parables from the book, get your copy now.


(Amazon paid link)


Guest Post - Written by Mr. Lal Bajaj, Bangalore



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