Notes from The Richest Man in Babylon: By George S Clason
I first read this interesting little book just over 20 years ago.
I remember that I had to go into three bookstores before I found it. In the first store the lady asked me “was it an autobiography?” In the second bookstore the man looked at me as if I was mad, but I finally got lucky on my third attempt when the guy said, “Yes, by George Clason”. At last! My search was over.
I had heard how this book contained timeless information about how to accumulate, grow and spend money wisely. I was expecting a colossus of a book. I must say that I was slightly surprised when the cashier handed me this little yellow book with just over 140 pages. I was starting to think maybe I was going mad. How could this little book contain so much information for less that $10?
I remember reading the whole book in one sitting, waiting to be hit with all of this magical information that would show me how I could make more money, how to invest money and how I could retire rich! It didn’t happen. As a twenty something year old I was sure that to me to make more money it had to be much harder than this! It had to be much more of an exact science and not a story set in ancient Babylon, about a chariot maker, coin purses and clay tablets!
Just recently, I was looking through my library, and I decided to read The Richest Man in Babylon again. Maybe I had missed something the first time that I had read it. So, I sat down with an open mind and took the following notes:
Seven Cures for a Lean Purse
Start thy purse to fattening Take one-tenth of all that you earn and save it and invest it for the future. The book uses a coin analogy: for every nine coins you spend, take one coin and save it for yourself and your family. Save 10% of your income. Straightforward advise perhaps, but how many people actually do this? I am not saying that you will get rich by saving 10% of your income, but it is a good number to start on.
Control thy expenditures Budget your expenses. Spend money on necessities and some enjoyments, but put aside the 10% first for saving and investing.
Make thy gold multiply Invest your money so that it will make more money for you. Remember, your savings won’t grow in a savings jar or under the mattress.
Guard thy treasure from loss Educate yourself about finance. Get good solid financial investment advice. Guard it wisely in accounts where you can withdraw it if necessary, and put it somewhere that will get you a good % return. Do your homework about the people that you give your money to.
Make of thy dwelling a profitable investment You should own your own home rather than renting. Some people advise against the benefits of owning your own home. Some say rent, some say buy but for the purpose of these notes George said buy. The best advice I can give you is, do your research about buying or investing in property as your home.
Insure a future income Invest for your retirement and have enough personal insurance.
Increase thy ability to earn Work harder, work smarter and always look for opportunities to earn more money. Continue your education and your skills. Become more valuable to the marketplace.
The Five Laws of Gold:
- Gold cometh gladly and in increasing quantity 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. In other words, a person should put away 10% minimum of his or her income for the future.
- Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. If you invest your money well, your money will simply make more money for you. A very simple law, but one that many people never achieve because they didn’t follow the first law.
- Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling. This law encourages cautious investing, and to be more informed about investing.
- 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 who are skilled in its keep. This follows on from the third law: if you invest in what you do not understand, you will more than likely lose money.
- 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. Be careful not to invest in anything that promises returns that are too good to be true.
So these are my notes from the Richest Man in Babylon. Many of the “laws and cures” are repeated a few times throughout the book. But the solid advice remains the same. This book will not show you how to make more money or exactly how to invest your money, but it will give you a very good foundation of sensible money advice that you can use all of your life.
I think that The Richest Man in Babylon would make a wonderful gift to a teenager or someone who wants sound money advice without the jargon. Better still; why not give yourself the gift of this timeless classic. Just don’t wait for twenty years before you read it again.
If you are interested in this book you can find it here: