The Richest Man In Babylon - George S. Clason

Brief Personal Take

For a book written in 1926 it baffles me how its advice on personal finance is still applicable today especially when you consider how much the financial world has changed over the years. I’ve read this book twice and even on the second read I still felt like I was learning something for the first time. It’s written as a story set in the ancient city of Babylon and also in an ancient style of writing as you will notice from the notes below.

It refers to 7 rules of acquiring wealth which are then summarized as the 5 laws of gold as the building blocks to wealth. Its primary focus is teaching you how you can grow wealth by simply saving a tenth of all your earnings before investing the sum into a business or investment you understand very well to create another stream of income and repeating the process until the income streams are multiple.

I loved how it simplifies the process of wealth creation regardless of how much you earn, or your profession, the road to wealth is still the same and it’s not only for the rich. I’m sure you’ll enjoy reading the notes.

 

 

Notes

·        Wealth is a power with which many things are possible. One may ornament the home with the richest furnishings. One may sail the distant seas. One may feast on the delicacies of far lands.

·        I decided to myself that I would claim my share of the good things of life. I would not be one of those who stand afar off, enviously looking watching others enjoying. I would not be content clothing myself in the cheapest raiment that looked respectable. On the contrary, I would make myself a guest at this banquet of good things.

·        I decided that if I was to achieve what I desired, time and study would be required. As for time, all men have it in abundance. You, each of you, have let slip by sufficient time to have made yourselves wealthy.

·        All that night I carved, though my back pained and the smell of wick made my head ache until my eyes could hardly see. But when he returned at sun-up, the tablets were complete.

·        I found the road to successful wealth when I decided that “a part of all I earned was mine to keep. And so will you.”

·        That was sufficient to change the heart of a sheepherder into the heart of a money lender.

 

Money is Plentiful to those who understand the simple rules of its acquisition.

1.    Start thy purse to fattening

2.    Control thy expenditures

3.    Make thy gold multiply

4.    Guard thy treasures from loss

5.    Make thy dwelling a profitable investment

6.    Ensure a future income

7.    Increase thy ability to earn

 

·        But all I earn is mine to keep is it not? Far from it, you pay the garment maker, you pay the sandal maker, the things you eat, can you live without spending? You pay for everyone but yourself. You labor for others. If you did keep for yourself a tenth of all you earn, how much would you have in ten years?

·        Wealth, like a tree, grows from a tiny seed. The first saving you make from your income is the seed from which your tree of wealth shall grow. The sooner you plant the seed, the sooner the tree shall grow, and the more faithfully you nourish and water the tree with constant monthly savings, the sooner you may bask in contentment beneath its shade.

·        Advice is one thing that is freely given away, but watch that you take only what is worth having. He who takes advice about his saving from one who is inexperienced in such matters shall pay with his savings for proving the falsity of their opinions.

·        You first, live upon less than you earn. Next, you learn to seek advice from those who are competent through their own experience to give it. And lastly, you have to learn to make gold work for you.

·        If I set for myself a task, be it ever so trifling, I shall see it through. How else shall I have confidence in myself to do important things? Therefore I am careful not to start difficult and impractical tasks because I love leisure.

·        Counsel with wise men. Seek the advice of men whose daily work is handling money. Let them save you from such an error as I myself made in entrusting my money to the judgment of a brick maker. A small return is far more desirable than risk.

·        Enjoy life while you are here. Do not overstrain or try to save too much. If you can’t keep more than a tenth, be content with this portion. Live otherwise according to your income and be not afraid to spend. Life is good and rich with things worthwhile and things to enjoy.

·        Invest your savings that it would bring in a good interest with safety and would neither be lost no entangled in investments that pay no dividends.

 

 The Seven Cures of a Lean Purse

1.    For every 10 coins I put in, to spend but 9.

2.    Budget the expenses that you may have coins to pay for thy enjoyments and gratify thy worthwhile desires without spending more than 9/10 of thy earnings.

3.    To put each coin to labor that it produces income that shall continually flow into thy purse.

4.    Treasure from loss by investing only where it’s safe and you can reclaim when you want and where you will not fail to collect a fair rental. Let wise men advise and protect thy treasure from unsafe investment.

5.    Own thy own home.

6.    Provide in advance for the needs of thy growing age and the protection of thy family.

7.    Cultivate thy own powers to study and become wiser, to become more skillful, to so at as to respect thyself.

 

·        That we all call our necessary expenses will always grow to equal our incomes unless we protest to the contrary. Confuse not the necessary expenses with your desires. Each of you and your families have more desires than your earnings can gratify.

·        Let thy motto be 100% of appreciated value demanded for each coin spent.

·        The fold we may retain from our earnings is but the start. The earnings it will make will build our fortunes.

·        A man’s wealth is not what he carries in his purse; it is the income he builds, the golden stream that continually flows into his purse keeping it bulging. That’s what every man desires, an income that continues to come whether you work or travel.

·        Preceding accomplishment must be desire. Thy desire must be strong and definite.

·        In learning to secure his one definite small desire, he has trained himself to secure a larger one. This is the process by which wealth is accumulated. First in small sums, then in larger ones as a man learns and becomes more capable.

·        Desires must be simple and definite. They defeat their own purpose should they be too many, too confusing or beyond a man’s training to accomplish.

·        As a man perfects himself in his calling, even so, does his ability to earn more than I could. I determined, more interest in my work, more concentration upon my task, more persistence in my effort, and behold, few men did what I did in one day. Whit reasonable promptness, my skill increased and was rewarded nor was it necessary for me to go six times to my master to request recognition.

·        Good luck waits to come to that man who accepts opportunity.

·        To attract good luck to oneself, it is necessary to take advantage of opportunities.

·        Men of action are favored by the Goddess of good luck.

·        In the strength of thine own desires is a magic power. Guide this magic power with the knowledge of the 5 laws of gold and you shall share the treasures of Babylon.

·        We found the trail to Babylon because the soul of a free man sees life as a series of problems to be solved, and solves them, while the soul of a slave whines, “what can I do?” “who am I but a slave?”

·        Where the determination is the way can be found.

 

 The Five Laws of Gold

1.    Gold comes quickly and in increasing quantities to any man who will put by not less than 1/10 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 it 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 wise men 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 investments.