Book Club: The Richest Man in Babylon by George Samuel Clason
Updated: Jul 15
The Richest Man in Babylon
Book Review Score: 10/10
Category: Financial Advice
An all-time classic on financial advice and making money. The book was written in 1926 and is set 8000 years ago, in Ancient Babylon 6000 b.c.
It breaks money-making down into timeless principles. These apply in the modern world, just as much as they did in ancient Babylon.
The Richest Man in Babylon is written in short parables, similar to the structure of the bible, this book provides readers with tangible ways of getting rich, acquiring wealth, and growing a fortune.
George Samuel Clason tells stories of Arkad, a poor scribe who turned into the richest man in Babylon. Arkad gives tales to other citizens in Babylon about how he made his fortune and how anyone can do the same.
It is fantastic for anyone who struggles to save money, wants to invest, or get rich. It will teach you about financial discipline, investing in what you know, living within your means, and paying yourself first.
It helped me to develop financial principles that I now try to live by. It has given me a more positive outlook on building wealth and how to do it. I strongly recommend it to anyone interested in business, finance, or just getting smarter about money.
I’ve summarised the main principals outlined in the book. In modern terms, the principals for getting rich and building wealth are:
7 Ways to Fix an Empty Wallet:
1. Grow Your Savings
As Clason puts it, ‘Fatten Thy Purse’. In other words, start building a savings account and always pay yourself at least 10% of earnings. That money is yours and is where you start building your fortune.
2. Control Expenses
This rule comes down to Necessities vs Desires. You must train yourself to spend money on things you need, not the things you want. Until you grow a large enough fortune to buy what you want of course...
3. Make Your Money Work For You
Once you have a small fortune, don't just leave it sitting there. Make your money make you more money. This is a key way to exponentially grow your fortune. See the next rule for more.
4. Invest Wisely
There are no get rich quick schemes, invest wisely, and patiently. You need to seek the advice of people who are experts in the industry you are investing in.
5. Buy Your Own Home
Renting drains your potential for saving. This one can be a little tricky in today's property market but there are other options for finding free accommodation.
6. Ensure You Have Future Income Streams
You need to guarantee you have income streams for your old age and your family. For this purpose, you want to invest in land and housing.
7. Increase Your Ability to Make Money
Upskill yourself through education, training, experience, and reviews.
The 5 Laws of Money:
1. Money Comes to Those Willing to Save
Saving is the key to getting rich and building wealth.
2. Money Grows When Invested Wisely
Compounding is the key to growing wealth. Your investment will grow exponentially if done correctly. Seek the advice of experts before investing. Try Robinhood and start growing your fortune with a free stock.
3. Money Grows When Invested with Smart People
Ask investment advice from people in the industry you aim to invest in. Let people who handle money help you grow your wealth.
4. Money Slips Away From Those Who Invest in Areas Unfamiliar to Them
Invest your money in the areas you specialize in.
5. Money Flees From People Who Seek Get Rich Quick Schemes
Patience is the key to building wealth. If you are looking for an online business to slowly build wealth, try one of these.
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