The Richest Man in Babylon by George S. Clason’s has sold more than 2 million copies and been translated into 26 different languages. This review is meant to give you a look inside my favorite aspects of The Richest Man in Babylon while highlighting it’s core principles and most memorable quotes. I create these reviews for myself in Evernote and felt it only fair to give these away for others to use as a study guide also. I too apply the principles from this book while also tithing 10% of my income to my local church as I feel is best practice. I hope to increase my charitable donations as well. These principles will surely help you as they have me.
The Richest Man in Babylon is comprised of several stories following different protagonists and their followers looking to glean insight on how these protagonists have acquired their wealth and become “free men” not controlled by their desires or lack of income.
The 1st Cure
1. Live off the 90%
Put away 10% of your income and use the *90% for your expenses.
*Later in the book 70% is suggested. Do what you can with what you have. The point here is to reduce spending anything on things that are not absolute necessities. Try and reduce what you pay, if possible for absolute necessities also.
The 2nd Cure
2. Control your expenses
Begin by allocating your 90% to only your absolute necessities. Reduce your desires, the things you do not actually need. “Casual wishes.”
Control expenditures to protect savings.
The 3rd Cure
3. Add to the Principle
Look for ways to use simple compound interest that will grow over time.
Invest the 10% and add earnings back to the principal.
The 4th Cure
4. Study Investments, Protect the Downside.
Understand your risk, protect the principal.
Know the dangers in any field.
Don’t just trust your gut or, likely, greedy instincts.
Consult those with investment experience.
Avoid over promising investments.
Seek investments where the principal is safe and can be reclaimed!
The 5th Cure
5. Own Your Own Estate
It is better to put your 90% toward expenses that will further grow one’s treasures.
*Rather than rent, you can pay a little more, for a season, then pay only tax later.
Each payment reduces debt.
*It’s important for me to state here (to avoid one who might look to argue) that I acknowledge owning a property is dependent on a number of varying factors that can not be addressed in one general comment. Everyone’s situation is unique and buying a house could be a grave mistake. Do your research, know the market and understand that every investment has a degree of risk. Owning a property is a fantastic way to increase your net worth over time, putting your money to work.
The 6th Cure
6. Insure a Future Income
Make investments today that will provide a way for tomorrow.
Small regular investments are the most reliable way to prepare for old age.
Leaning on future success isn’t guaranteed and could be tragic. Start now.
The 7th Cure
7. Respect Yourself
Cultivate your skills by respecting yourself, acquiring wisdom and increasing in skillfulness.
Focus on the person beneath the clothes, behind the wheel or in-front of the company.
What’s in your mind and life works for or against you, which will you choose?
Cultivate a desire to earn more.
Have strong, specific, desires, not general and unclear desires.
More wealth? How much more? In what time?
Wisdom breeds wisdom. Wisdom breeds service to all.
Pg 41: Such things as the following, a man must do if he respects himself:
He must pay his debts with all the promptness within his power, not purchasing that for which he is unable to pay.
He must take care of his family that they may think and speak well of him.
He must make a will of record that, in case the Gods call him. Proper and honorable division of his property be accomplished.
He must have compassion upon those who are injured and smitten by misfortune and aid them within reasonable limits. He must do deeds of thoughtfulness to those dear to him
“The Goddess of Luck”
Arkad: “I look to find her, not at the gaming tables or the races where men lose more gold than they win but in other places where the doings of men are more worthwhile and are more worthy of reward.” pg 27
“In tilling the soil, in honest trading, in all of man’s occupations, there is opportunity to make a profit… [but rather] When a man playeth the games [gambling], the situation is reversed for the chances of profit are always against him and always in favor of the game-keeper.” pg 27
Be a person of action
Procrastination is a thief coming to steal both present and future accomplishments
Luck is when action meets opportunity
Luck requires you to step through procrastination
Trust your better judgement and take risks when not taking the risk feels like procrastination
Instead of looking to be lucky, one should position oneself to accept opportunity
“Opportunity waits for no man. Today it is here; soon it is gone. Therefore, delay not!” pg 51
“Opportunity… thinks if a man desires to be lucky he will step quickly.” pg 53
“Men of action are favored by the goddess of good luck.” pg 58
The Richest Man In Babylon’s
The Five Laws of Gold
“…[I] realized that had I but sought wisdom first, my gold would not have been lost to me.”
Men will often ignore wisdom and waste whatever Gold they have.
“Gold is reserved for those who know it’s laws and abide by them.”
We have Kalabab sharing a story to a group of men journeying with him. He tells them a story he learned while just himself a worker trying to earn an honest wage, delivering fine rugs to Nomasir, son of Arkad, one of Babylon’s wealthiest citizens.
Nomasir shares with Kalabab of being sent away from his father Arkad’s home for a decade to learn to survive and create his own wealth. Arkad first gave him a sack of Gold and a single clay tablet with wisdom inscribed on it before sending off his son Nomasir. 10 years passed and Nomasir is now before Arkad giving an account. Nomasir shares his experience losing all his gold having forgotten to read the clay tablet. “…[I] realized that had I but sought wisdom first, my hold would not have been lost to me.”
Be guided by the wisdom of age not the inexperience of youth.
Put away 1/10 of earnings for estate and family’s future
Find wise employment of your gold
Invest money under the advice of the financially experienced.
Gold leaves one who invests in unfamiliar areas or with people unskilled in it’s keep.
You lose Gold when your expectations are unrealistic or romanticized by tricksters
“Who can measure in bags of gold, the value of wisdom? Without wisdom, gold is quickly lost by those who have it, but with wisdom, gold can be secured by those have it not.” pg 68
Wealth that comes quickly, departs quickly.
Wealth and its satisfaction is gradual, like a child born of knowledge and persistent purpose.
Take no chance of losing the principle or tying it up in unprofitable investments.
The Gold Lender of Babylon
In this allegory, our protagonist Rodan (a spear maker) has just stumbled on a fortune of 50 pieces of Gold following the King of Babylon choosing his new design for Babylon’s new spear tip.
The 3 years previous Rodan had been left with 1 piece of Gold saved from his work, to put in perspective the size of his newly received reward. His sister has now approached him to request he lend this fortune to her husband so he can “have his opportunity” to trade as a merchant. Rodan is seeking Mathon, Babylon’s Gold Lender, for advice (to Mathon’s surprise, as his advice is rarely sought).
Mathon shares many stories of the risks that come with lending. Here’s what I highlighted:
“Gold bringeth unto its possessor responsibility and a charged position with his fellow man.” pg 76
With wealth comes it’s own cautions, warning’s and hardships
“If you desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself.” pg 78
“Youth is ambitious. Youth would take short cuts to wealth and the desirable things for which it stands. To secure wealth quickly youth often borrows unwisely.” pg 82
“Gold, you see Rodan, is the merchandise of the lender of money. It is easy to lend. If it is lent unwisely then it is difficult to get back. The wise lender wishes not the risk of the undertaking but the guarantee of safe repayment.” pg 84
“If thee wouldst lend it so that it may earn thee more gold, then lend with caution and in many places.” pg 84
“Be conservative in what thou expect it to earn that thou mayest keep and enjoy thy treasure. To hire it out with a promise of usurious returns is to invite loss… seek to associate thyself with men and enterprises whose success is established that thy treasure may earn liberally under their skillful use and be guarded safely by their wisdom and experience.” pg 87
“Greater a little caution than a great regret.” pg 88
The Walls of Babylon
Tells the story of Old Banzar, an aged warrior who guards the passageway to the top of the ancient walls of Babylon. The city is under attack and her walls enduring great pressure as Babylon’s army defends her fortress. After a tense struggle Babylon defends herself from the violent attack, frightening many citizens but encouraging them that the walls have once more endured and provided protection against the uncertainty of the enemy.
The lesson her is simple:
“We cannot afford to be without adequate protection.” pg 93
“…behind the impregnable walls of insurance, savings accounts and dependable investments, we can guard ourselves against the unexpected tragedies that may enter any door and seat themselves before any fireside.” pg 93
All wise ways to defend against the unexpected tragedies that life can produce.
The Camel Trader of Babylon
Here we read the tale of Tarkad’s and his defining moment. Tarkad arrives hungry and without food or money as he runs into Dabasir, a well respected Babylonian to who Tarkad is indebted two pieces of copper and a piece of silver. Dabasir, knowing Tarkad has an empty stomach, invites the embarrassed young Tarkad into the eating hall. Dabasir, playing off Tarkad’s hunger, tells a story of once being a Syrian slave. Eavesdroppers slide closer to hear the story.
Dabasir shares of being youthful and reckless before being sold into slavery. He inspires Tarkad to no longer keep the “Soul of a Slave” but think and act s a respectable man.
“The hungrier one becomes, the clearer one’s mind works-also the more sensitive one becomes to the doors of food.” pg 94
“If a man has in himself the soul of a slave will he not become one no matter what his birth, even as water seeks its level? if a man has within him the soul of free man, will he not become respected and honoured in his own city in spite of his misfortune?” pg 99-100
“No man is otherwise who cannot respect himself and no man can respect himself who does not repay honest debts.” pg 100
“I sat up and looked about me. There was a coolness in the morning air. My camels lay dejected not far away. About me was a vast waste of broken country covered with rock and sand and thorny things, no sign of water, naught to eat for man or camel. ‘Could it be that in this peaceful quiet i faced my end? My mind was clearer than it had ever been before. My body now seemed of little importance. My parched and bleeding lips, my dry and swollen tongue, my empty stomach, all had lost their supreme agonies of the day before.
I looked across into the uninviting distance and once again came to me the question, ‘Have I the soul of a salve or the soul of a free man?’ Then with clearness I realized that if I had the soul of a slave, I should give up, lie down in the desert and die, a fitting end for a runaway slave.
But if I had the should of a free man, what then? Surely I would force my way back to Babylon, repay the people who had trusted me, bring happiness to my wife who truly loved me and bring peace and contentment to my parents.
… Then a strange thing happened… At last, I saw the true values in life… Die in the desert! Not I!’” pg 102-103
“We found the trail to Babylon because the soul of a free man looks at life as a series of problems to be solved and solves them, while the soul of a salve whines, ‘’what can I do who am but a slave?’” pg 104
“Where the determination is, the way can be found.” pg 104
The Clay Tablets from Babylon
This chapter is written a gentlemen named Alfred H. Shrewsburry to his professor after having discovered the tablets that make up the narrative this book has followed. He recaps the principles he has set aside and uncovers in the following 2 chapters how it has begun to provide him and his wife wealth and structure to their financial future.
1/10th of all earnings shall be set aside as my own to keep. “That man who keepers in his purse both gold and silver that he need not spend s good to his family and loyal to his king. pg 108
2/10th’s of all I have earned shall be divided honourably and fairly among those who have trusted me and to whom I am indebted. pg 109
7/10th’s have I divided with my good wife to pay for our living. pg 111
“Therefore am I more determined than ever to carry through, being convinced that it is easier to pay one’s just debts than to avoid them.” (pg 110) “My heart is lighter than it hath been for a long time.” pg 111
“We made a list of all our debts and I took it around and shoed it to everyone we owed. I explained how it was simply impossible for me to ever pay them the way things were going along. They could readily see this themselves from the figures. Then I explained that the only way I saw to pay in full was to set aside twenty percent of my income each month to be divided pro rata, which would pay them in full in a little over two years… I secured all their names to an agreement binding them not to molest us as long as the twenty percent of income was paid regularly. Then we began scheming on how to live upon seventy percent. We were determined to keep that extra ten percent to jingle.” pg 115
“It was like having an adventure to make the change. We enjoyed figuring this way and that, to live comfortably upon that remaining seventy percent… Next we put our favorite brands of tea and such under suspicion and were agreeably surprised how often we could purchase superior qualities at less cost… We managed and right cheerfully at that.” pg 115
“You see, that is the sporty part. It is real fun, to start accumulating money that you do not want to spend. There is more pleasure in running up such a surplus than there could be in spending it… There is a most gratifying sense of security to know our investment is growing steadily.” pg 116
“All of this out of my same old check. Difficult to believe, yet absolutely true. All our debts being gradually paid and at the same time our investment increasing. Besides, we get along financially even better than before. Who would believe there could be such a difference in results between following a financial plan and just drifting along… We will have more to pay upon our investment besides some extra for travel. We are determined never again to permit our living expenses to exceed seventy percent of our income.” pg 116
The Luckiest Man In Babylon
Sharru Nada a wealthy man leading many merchants alongside a young Hadan Gula, heir to his grandfathers hard work, teaches Hadan, the lazy millennial type, about the value of hard work and an earned wage.
“I like to work and I like to do good work, for work is the best friend I’ve ever known. It has brought me all the good things I’ve had, my farm and cows and crops, everything.” pg 123
“Megiddo felt that we would soon part. When no buyers were near, he talked to me earnestly to impress upon me how valuable work would be to me in the future: ‘Some men hate it. They make it their enemy. Better to treat it like a friend, make thyself like it. Don’t mind because it is hard. If thou thickest about what a good house thou build, then who cares if beams are heavy and it is far from the well to carry the water for the plaster… if you get a master, work for him as hard ad thou canst. If he doesn’t not appreciate all thou do, never mind. Remember, work, well-done, does good to the man who does it. It makes him a better man.’”
– pg 125
“Such spirit can carry thee far on the road to success…” “…What such words of encouragement could mean to a slave boy, lonesome in a great city, struggling with all he had in him to find a way out of his humiliation… Work was proving to be my best friend just as Megiddo had said, I was happy… Work is helping me to recover from my great trouble. Some day it will help me to buy me freedom and once more own a farm of my own.’”
“Cling no longer to thy master. Get once again the feeling of being a free man. Act like a free man and succeed like on! Decide what thou desires to accomplish and then work will aid thee to achieve it!” pg 131
“My willingness to work enabled me to escape from being sold to join the slave gangs… It also impressed thy grandfather, he selected me for his partner.” pg 135-136
“Work attracted his many friends who admired his industry and the success it brought. Work brought him the honours he enjoyed so much in Damascus. Work brought him all those things I have approved. And I thought work was fit only for slaves.”
“ Life is rich with many pleasures for men to enjoy,” Sharru Nada commented. “Each has its place. I am glad that work is not received for slaves. Were that the case I would be deprived of my greatest pleasure. Many things do I enjoy but nothing takes the place of work.” pg 136
Hadan Gula: ‘I shall start humbly as he started, which befits my true station far better than jewels and fine robes.’
“So saying Hadan Gula pulled the jeweled baubles from his ears and the rings from his fingers. Then reining his horse, he dropped back and rode with deep respect, behind the leader of the caravan.” pg 137
An Historical Sketch of Babylon
Babylon is an outstanding example of man’s ability to achieve great objectives, using whatever means are at his disposal. All of the resources supporting this large city were man-developed. All of its riches were man-made.
Babylon possessed just two natural resources – a fertile soil and water in the river… Babylonian engineers diverted the waters from the river by means of dams and immense irrigation canals. far out across that arid valley went these canals to pour the life-giving waters over the fertile soil. This ranks among the first engineering feats known to history. Such abundant crops as were the reward of this irrigation system the world had never seen before.” pg 139
“Babylon… today… a heap of dirt, so long abandoned that no living person even knew its name until it was discovered by careful removing the refuse of centuries from the streets and the fallen wreckage of its noble temples and palaces.” pg 140
“The Babylonians were clever financiers and traders. so far as we know, they were the original investors of money as a means of exchange, of promissory notes and written titles to property.” pg 144
“The eons of time have crumbled to dust the proud walls of its temples, but the wisdom of Babylon endures.” pg 144
Having shared my highlights from The Richest Man in Babylon, I would still recommend you sit down and read this for yourself. The story of the richest man in babylon will not only challenge your understanding and preconceptions about garnering wealth, but it will engage and delight your senses as you imagine a time far from now where things weren’t quite different than they are today.
I’m more excited than ever to help individuals achieve their wildest dreams and live a life inspired and fully engaged. @jakenicolle