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George S. Clason’s The Richest Man in Babylon#

This book is not really a single book but a collection of short pamphlets that Mr. Clason, a businessman in the early 1900’s, wrote on the topic of financial success. Using parables set in ancient Babylonia, the pamphlets provide, generally, seven keys for becoming wealthy.

Although I quickly acknowledge that repetition of concepts aids in internalizing those ideas, I don’t usually care for books that include a lot of repetitive materialBecause the book is a collection of pamphlets, the same seven concepts, with the occasional additional idea thrown in, are repeated multiple times throughout the book using different characters and settings to convey the seven principles. Knowing that the book is a compilation makes the repetition a bit more palatable.

Clason’s ideas show up in variety of different books and other personal finance resources couched in slightly different language, suggesting that his seven principles are foundational or, as some refer to them, first-principles.

What I Liked About the Book#

To be honest, I found the seven (or eight, depending on how you want to read the book) to be on target. Using the parables to present the concepts makes them easy to read and understand without going into unnecessary detail. Presenting the concepts in various different situations aids in comprehension and retention of the ideas. As I said, generally I don’t care for a lot of repetitive messaging in books but for this one it seems to work. In short, I liked everything about the book and understand why it is seen as a classic.

What I Didn’t Like About the Book#

Well, there was nothing that I didn’t like! How’s that for succinct?

Final Thoughts#

Clason provides the foundational knowledge needed to for someone who wants to be wealthy to achieve that goal. He emphasizes that it is through simple, consistent actions that wealth is achieved and reminds that reader that wealth is within everyone’s grasp, if only they’ll follow a few simple rules. I think that most personal finance books, videos, websites, etc try to make the topic much more complex than it needs to be. Yes, when you get into the nitty-gritty of investing and so on it can be quite complex. But Clason lets the reader know that even without that complexity achieving wealth is possible.

Do I Recommend the Book?#

Absolutely and without reservation. For someone who is just starting out on their road to wealth, The Richest Man in Babylon is an excellent primer in how wealth is accumulated. Simple ideas such as always setting aside 10% of your income for savings, managing your expenses, and avoiding excess debt are easy to grasp and easy to accomplish, though a bit of self-discipline is required.

If you want to get started on the road to wealth, I can think of no better way to start than taking the time to read through and internalize the seven (or eight) ideas in this book.

Why do I say “seven (or eight)”?#

Generally, Clason lays out seven principles for achieving wealth:

  1. Always hold back 10% of what you earn for yourself to be put into savings.
  2. Control expenses so that you are only spending about 70% of what you earn for running your home.
  3. Spend you money on things that will increase your income or wealth – take advantage of compound interest.
  4. Guard your wealth. Don’t chase after get-rich-quick schemes that will most likely make someone else wealthy while impoverishing you. Make safe investments that are backed by assets that can be converted to cash if needed.
  5. Plan for the future – put money back for that time when you can no longer work or to care for your family if you’re no longer able to work.
  6. Cultivate your own power through continuous learning and skills development, particularly around ways to manage your finances more astutely.
  7. Recognize that you create your own luck through knowledge, preparation, and awareness of opportunities.

The eighth principle which, as I recall only appears in one story, is that doing good work, and giving more than is required to the task, is a necessary component in becoming wealthy. Seeking the quick buck or trying to become wealthy without putting in your best effort will lead to ruin. Even if you’ve built your wealth, continue to work toward refining you knowledge, skills, and abilities so that you can continue to build your wealth.