You have probably heard that it is a recommended read. I have always been meaning to read this book but never had the opportunity to, until I picked it up from the library recently because I put it on my 2017 Personal Finance Goals books to read list.
It was written by George S. Clason way back in 1926 and is considered a classic.
Personally, I think a lot of the big personal finance books probably just re-hashed portions of this book, modernized it, and put their individual spin on it. The advice in it is spot on, and obviously pertinent almost a century after it was written.
I personally don’t like reading classic style writing (or other stuff with a lot of verbosity) but as I got into reading this book, it got easier to understand and read. It is a quick and easy read, not a long read at all. The book is set in Ancient Babylon, and the stories and lessons by an individual named Arkad, the Richest Man in Babylon.
The great thing about this book is that it kind of combines with The Secret or the Law of Attraction meaning that those who attract money will have more money and it will come easier. Like begets like.
Here is an outline and the main tenets of what you will find in The Richest Man in Babylon:
Start thy Purse to Fattening
Just like many financial gurus recommend today, the Babylonians recommend saving and investing at least 10% of your income. According to Trading Economics, the household savings rate from 1981 to 2016 was a dismal 7.49%. We can do a little better than that.
Control thy Expenditures
Spend less than you earn. This is the golden secret – but it’s not rocket science. Control your wants and focus on your needs.
Make thy Gold Multiply
Invest your savings and make your gold multiply. They’re not telling you to invest in gold here, it’s just an analogy.
Guard thy Treasures from Loss
There were some good stories in here about being too naïve in investing your money. Being wise is very important when investing your money and it is crucial to avoid investments that seem to sound too good to be true.
Make of thy Dwelling a Profitable Investment
This is an interesting recommendation from The Richest Man in Babylon, which is to own your home. This is contrary to the popular advice that we are receiving now and I suppose it’s important to put into context that owning your own home doesn’t mean having a mortgage that is ten times your annual salary. Perhaps there should be a caveat in the book that the North American Dream to own a home can be fraught with danger.
Ensure a Future Income
This is really important, but I don’t think people who are working pay much attention to it since not everyone seems to be saving for retirement. He recommends making sure that you have enough money in retirement, when you aren’t able to work anymore. Also, to ensure you have enough money to take care of your family when you pass away.
Improve thy Ability to Learn
Finally, this is always good advice for anyone, to strive to become wiser and more knowledgeable so that your ability to earn more money can be developed and strengthened.
As you can see, these are classic recommendations for anyone interested in personal finance and a great first step to foray into investing in yourself and the future of your family. In addition to these, recommendations, The Richest Man in Babylon also shares the five laws of gold, including not to share your gold with your family.
Here’s a free PDF version of The Richest Man in Babylon that I found on the Internet. Here’s also a full audio book in just under 5 hours of The Richest Man in Babylon.
Readers, have you read The Richest Man in Babylon? What did you think of it?