 If you are a beginning wealth builder or just looking for inspiration, I highly recommend The Richest Man in Babylon. This book has been a best seller for almost 80 years and the information is as true and valuable today as the first day it was published. I frequently give this book as a gift to friends, family and colleagues and it’s always one of a select few that I recommend to aspiring beginners.
The Richest Man in Babylon no longer requires any marketing, it makes its way to new readers through word-of-mouth or as a gift. That simple fact is a powerful message about the quality of the content.
It must contain revolutionary new money and investment ideas and be as thick as a phone book, right? Not at all, it’s only 140 pages and it doesn’t include any groundbreaking advice. Even when it was first published in 1926, the book didn’t offer any new information to readers, only a common sense approach to acquiring and holding on to wealth.
The brilliance and longevity of this book is a result of George S. Clason's unique approach to sharing financial wisdom. The stories are set in ancient Babylon and they are as entertaining to read as they are insightful and educational. More than any other investing and personal finance author that I've read, Clason had an uncanny knack for simplifying concepts and connecting with readers.
He originally wrote these stories to be used as pamphlets handed out to bank customers to teach financial thrift, but they were so popular that he eventually compiled them into The Richest Man in Babylon. Each short story conveys different parts of Clason's Seven Cures for a Lean Purse and his Five Laws of Gold.
The Seven Cures for a Lean Purse are repeated throughout the book in various stories:
“1 - Start thy purse to fattening” – The right time to start saving is right now.
“2 - Control thy expenditures” - Control your expenses.
“3 - Make thy gold multiply” - Start Investing.
“4 - Guard thy treasures from loss” – Learn to invest wisely and don’t take reckless risks.
“5 - Make of thy dwelling a profitable investment” – Own your own home, don’t rent.
“6 - Insure a future income” – Save, invest, and plan for the future.
“7 - Increase thy ability to earn” - Never stop growing and learning as a person or as an investor.
The Five Rules of Gold as explained by Clason’s main character, Arkad:
- “ Gold cometh gladly and in increasing quantities 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."
- "Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field."
- " Gold clingeth to the protection of the cautious owner who invest it under the advice of men wise in its handling."
- "Gold slippeth 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."
- "Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment."
One of the reasons that this book became an instant classic is that you can read it in a single enjoyable afternoon. Connecting with Clason’s humble and noble characters from a civilization at least 5,000 years in the past helps you enjoy the stories and retain the information. He came up with a wonderfully subtle and entertaining way to share his wealth-building philosophy. The ancient setting also helps to convey the timelessness of the concepts, the fundamental principles of wealth don’t change. Who’s to say that Clason’s stories are far fetched? Babylonians were flourishing in walled cities as far back as 8,000 years ago.
What I find most endearing about this book is that Clason had the courage to weave his moral beliefs into the stories. Very few finance and investing books dare venture into the moral and ethical implications of their subject matter. Through his main character, Arkad, Clason shares his belief that money is never “good” or “bad”, only people are. He goes on to explain that with wealth comes great responsibility and that those who are successful in life, not just in financial matters, are those who are generous with their money and even more generous with their knowledge.
Back in my branch management days I had a bright and ambitious employee who asked me how he could learn to accumulate wealth… well, that’s not exactly how he put it, I think he said something along the lines of “what’s the fastest way to get rich?” While somewhat misguided and naive, I liked him, he was a good person and a hard worker. He also desired his goals so strongly that I believed he might actually achieve them if set on the right path, so I gave him a copy of this book. He dutifully took it home that night and read it cover to cover. The next day he told me in a disappointed tone that “it’s not that I disliked the book, it’s just that I thought it would teach me something profound.”
I thought hard about my response. At the end of the day when the last customer and the rest of the employees had walked out I asked him if he enjoyed the stories, to which he replied that he did, they were fun to read. Next I asked him about some of the key concepts in the book. I had to prompt his memory a couple times with bits of the story but, with a little help, he quickly pieced together the Seven Cures for a Lean Purse.
Finally I explained to him that...
When I read my first personal finance book I felt like a whole new world of possibilities had opened. When I read my second, I was a little disappointed that it was so similar to the first but it was gratifying to see how many wealth-building concepts I already knew. By the time I read my tenth, there was no new information.
Why? Most of the books contained similar information out of necessity, these fundamental wealth building principles are so critical to long-term success that it would be hard to take an author seriously if they omitted any of the major ones.
You’ve only read this one, and while the concepts seem like common sense, very few people adhere to them. By repeating the Seven Cures for a Lean Purse back to me, you proved that many of the concepts in this book are already ingrained in your mind. That’s the magic of this book, you actually enjoyed learning these concepts and now you just have to have the discipline to live by them.
And he did, he’s now a very successful business owner and investor. I personally enjoy Clason’s brevity and applaud him for covering most of the critical wealth-building concepts in The Richest Man in Babylon in a way that readers can enjoy and learn quickly, hopefully you will feel the same.
I thought it would be fun to end this review with a few of my favorite Clason Quotable Quotes.
“Preceding accomplishment must be desire. Thy desires must be strong and definite. General desires are but weak longings.”
“If I set for myself a task, be it so trifling, I shall see it through. How else shall I have confidence in myself to do important things?”
“Can this be so? Rodan, the spearmaker, doth display more cunning than all the rest, for he comes to Mathon, not for gold, but for advice.”
“Money is plentiful for those who understand the simple laws which govern its acquisition.”
“Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly.”
Thanks for reading! Come back soon, I’ll be posting a review of another one of my favorites next month.
Founder, Money-and-Investing.com
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