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The Richest Man In Babylon by George Clason

by Alvin

      The Richest Man in BabylonBook Review:

Babylon was a rich and modern city at its time and through its stories, the author did a great job to inculcate basic personal finance knowledge that everyone ought to have. Everyone wishes to be rich or financially free and many would think it takes great luck to be able to achieve that. But the author stressed that it is through very simple methods and a determined mind to succeed. It is interesting to see the problem of managing personal finance traces back to ancient times. The author shares with us the wisdom of the Babylonians with regards to money.

Book Summary:
The tale of the man who desired gold

A chariot builder wondered why he labored and still remained poor. After a coversation with his friend, they decided to approach the richest man in Babylon, Arkad, and seek for an answer.

The richest man in Babylon tells his system

Arkad told them about his hardship before he became rich and how he overcame poverty. He stressed that “a part of all you earn is yours to keep”, and that everyone should pay himself first and not less than a tenth of whatever he earns. In addition, each amount saved should in turn work for him to create more wealth. Arkad also warned the importance of where or whom you invest your money in. As mentioned in the book, it was a mistake to trust the brick maker to buy rare jewels.

Seven remedies for a lean purse

The king of Babylon, SARGON, returned after defeating the enemies and the situation of the Babylon city was bad. The King then ordered Arkad to teach the citizens how to acquire wealth. Arkad started inculcating the seven remedies for a lean purse:

1) Start fattening your purse – ‘For each ten coins I put in, to spend but nine’.

2) Control your expenditures – ‘Budget your expenses so that you may have coins to pay for your necessities, to pay for your enjoyments and to gratify your worthwhile desires without spending more than nine-tenths of your earnings.

3) Make your gold multiple – ‘…to put each coin to laboring so that it can reproduce itself and help bring you income, a stream of wealth that will flow constantly into your purse.’

4) Guard your treasures from loss – ‘Guard your treasure from loss by investing only where your principal is safe… Secure the advice of men experienced in the profitable handling of gold. Let their wisdom protect you from unsafe investment.

5) Make your home a profitable investment – ‘Own your own home’

6) Insure a future income – ‘Provide in advance for the needs of your growing age and for the protection of your family.’

7) Increase your ability to earn – ‘…cultivate your powers, to study and become wiser, to become more skillful…’, ‘the man who seeks to learn more of his craft will be richly rewarded’.

The debate of good luck

A discussion took place in the Temple of Learning where they debate whether wealth arised from good luck. Arkad explained that in betting, the game keeper always have the upper hand. A more concrete way to look at luck is that ‘good luck comes to the man who accepts opportunity’. E.g. when a money making opportuniy comes by, he should accept it and not procrastinate, letting it slip away. ‘Action will lead you forward to the successes you desire’.

The tale of the five laws of gold

Kalabab, a traveler spoke the story of Arkad and his treatment to his son, Nomasir. Arkad believed it was important for his son to learn how to manage money before he can inherit his wealth. He gave his son a bag of gold and a clay tablet with the five laws of gold carved on it. He then sent his son away and ask him to return 10 years later. If Nomasir could proved his worthiness, he will be made the heir to Arkad’s wealth. Nomasir lost his bag of gold very soon but it was the five laws that taught him to earn back the gold in multiples.

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 contendedly for the wise owner who finds profitable employment for it, multiplying 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 not familiar or which are not approved by those skilled in its keep.

5) 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.

The tale of the gold lender of Babylon

Rodan, a spear maker received fifty pieces of gold as reward from the king for improving the spears of the royal guards. He felt lost with so much money and approached Mathon, a money lender, for advice. Mathon taught him the importance of protecting gold through his personal experiences. He advised Rodan that ‘better a little caution than a great regret’ when investing his gold.

The tale of the walls of Babylon

Using the analogy of the high impregnable walls of Babylon to ward off enemy attacks, the message in this chapter tells us that insurance, savings and dependable investments help guard us against unexpected tragedies and we cannot afford to be without adequate protection.

The tale of the camel trader of Babylon

Debasir shared his slavery story and what the Queen told him, “How can you call yourself when your weakness has brought you to this? If a man has in himself the soul of a slave will he not become one no matter what his birth, … If a man has within him the soul of a free man, will he not become respected and honored in his own city in spite of his misfortune?” The message from this chapter – ‘where there is determination, the way can be found’.

The tale of the clay tablets from Babylon

Debasir carved 5 clay tablets recording the progress of returning his debts and attaining his wealth. This appear to be the most original story from Babylon as it seems to be directly translated from the clay tablets.

Historical sketch of Babylon

This chapter gave a brief introduction and history about the city of Babylon.