The Richest Man in Babylon - Review

For those that have not had the pleasure of reading The Richest Man in Babylon I highly recommend it. The book is extremely simplistic in it's approach to wealth building, but sometimes the simplest things are the most effective. The book was first published in 1926 and was written by George S Clason. It is 160 pages of pure joy. The book has several parables that tell the stories of various people in ancient Babylon. The text is written in the form of the bible and this should be the bible by which all junior wealth building followers should worship.

The basic premise of the book is pay yourself 10% of your income. No matter what happens keep this 10% every pay check and invest it. That money will become your slave and bare children. Those children will also become your slaves and so on and so on. Original, "No". Complex, "No". Highly effective, "YES!!!". This should be mandatory yearly reading in every middle school / high school in America.

Using an ancient civilization and writing in the 1920's Clason makes a balls on statement about wealth and society. He basically states that no society can be rich and prosperous unless it's people are also rich and prosperous. With our current debt ridden, recession bound economy could anything else be more true.

Below is the table of contents along with the Seven Cures for a Lean Purse and The Five Laws of Gold. Please drink from this well of financial wisdom.

Table of Contents
The Man Who Desired Gold
The Richest Man In Babylon
Seven Cures for a Lean Purse
Meet the Goddess of Good Luck
The Five Laws of Gold
The Gold Lender of Babylon
The Walls of Babylon
The Camel Trader of Babylon
The Clay Tablets from Babylon
The Luckiest Man in Babylon
An Historical Sketch of Babylon

The 5 Laws of Gold
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.

The 7 Cures to a Lean Purse

FIRST CURE: Start thy purse to fattening.
The stream of money that flows into and out of one's life is immense. Wealth and security can be secured from it, but only if portions of that stream are diverted. Time and again, the book's "enlightened" characters stress saving at least ten percent of your income every month, without fail. Accomplish this by setting aside that ten percent before all other expenses are considered.
"But when I began to take out from my purse but nine parts of the ten I put in," Arkad said, "it began to fatten. So will thine."


SECOND CURE: Control thy expenditures.
The amount of money a person makes is important, but it is secondary to the degree to which that person controls his expenses. Budget and plan your expenses earnestly. Demand value for the dollars you spend.
"That what each of us calls our 'necessary expenses' will always grow to equal our incomes unless we protest to the contrary," Arkad stated. "Confuse not the necessary expenses with thy desires."

THIRD CURE: Make thy gold multiply.
Three words: interest, interest, interest. Take care to see that all saved monies are kept in the highest-yield interest-bearing accounts available. If you have the experience and education to do so, invest a portion of your money by other means, always striving to create a reasonable risk/reward ratio.
"A man's wealth is not in the coins he carries in his purse; it is the income he buildeth. That is what thou desireth: an income that continueth to come whether thou work or travel."


FOURTH CURE: Guard thy treasures from loss.
Forget about gunning for those astronomical returns promised by market gurus and their "hot tips." And don't bother with those wacky startup businesses you see boxed in the classified ads, either. If you're going to take risks and invest your money, then make sure you have the education to know how to guard and protect your assets. Only you can keep your best interests at the forefront. Your savings control your future; treat them like it.
"The first sound principle of investment is security for thy principal. The penalty of risk is probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own desires to make wealth rapidly."

FIFTH CURE: Make of thy dwelling a profitable investment.
In most cases, home ownership — even when financing is included — is preferable to renting. At some point, the mortgage payments will end, and ownership will be achieved. There is no ownership for the renter ... ever.
"Thus come many blessings to the man who owneth his own house. And greatly will it reduce his cost of living, making available more of his earnings for pleasures and the gratification of his desires."


SIXTH CURE: Insure a future income.
The future cannot be known, but preparations can be taken to assure a certain level of financial safety. Whether this is done via a strict savings plan, outside insurance, or a combination of both, one must be careful to provide for the wellness of himself and his loved ones in later years. Disability and untimely death have caught and ruined families and their finances since time immemorial.
"No man can afford not to insure a treasure for his old age and the protection of his family, no matter how prosperous his business and investments may be."

SEVENTH CURE: Increase thy ability to earn.
Last among Clason's "cures" is action taken to increase one's earnings. Acquire education, experience, and confidence in yourself, and use these things to improve your income. You might begin a second, part-time job, or simply freelance your abilities in your spare time. Whatever you do, never underestimate the opportunity to turn a favorite hobby or skill (woodworking, photography, home decorating, cooking, etc.) into extra income.
"The more of wisdom we know, the more we may earn. The man who seeks to learn more of his craft shall be richly rewarded. Cultivate thy own powers, study and become wiser, become more skillful, and act as to respect thyself."