Before leaving my dad’s house, my sisters and I had to read several books and repeat the story or lessons from the book to him. One of the books was by George S. Clason The richest man in Babylon. The book is educational and contains a lot of good advice. It’s a great book for young adults or anyone who hasn’t been interested in personal finance before.
Clason did not write this book as a book.
He claimed to have written his parables in 1926 and the banks distributed them in pamphlet form. (I find it interesting that it started during the roaring twenties and prohibition.) The most famous of these parables were compiled later in the book, The richest man in Babylon.
Each chapter of the book tells a parable set in ancient Babylon, around the time of King Nebuchadnezzar.
The stories teach you how to save, pay off debt, and attract gold. The fact that the stories take place in ancient times is irrelevant, because the message is valid for any period and probably for any culture. When you read the book, what I recommend you do, or at least have your teens read, remember that each chapter is a different parable from a different booklet. This is why the chapters don’t flow well together and why you don’t see a character or two in the whole book.
Chapters 1 and 2: The Man Who Desired for Gold and the Richest Man in Babylon
Bansir, a car manufacturer, reflected one day why he had no money. He was a great car maker. His friend, who played the lyre, asked him if he could borrow money. Bansir said no, I don’t have any. His friend then asked him why he was sitting staring at nothing when he was broke. Bansir told him that he was reflecting on his financial situation. They recalled that they went to school with a classmate named Arkad.
Arkad grew up with the same financial position as Bansir and Kobbi, but now he had a reputation as the richest man in Babylon. They asked him for advice.
Arkad told them how he got rich, including how he started, his early failures, and his early successes. The lessons Arkad taught his friends were threefold.
1. Save at least a tenth of the money you earn.
2. Invest your money wisely so it can grow.
3. Invest the interest in your investments.
Chapter 3: Seven Cures for a Tight Portfolio
The king realized that although the city was prosperous, the gold was in the hands of a few men. He asked Arkad, the richest man in Babylon, to teach a class to 100 men, who would then teach others, on ways to attract money. Arkad agreed and taught seven principles. Each day he taught a principle through a parable.
1. Start your bag to get fat. (Save at least 1/10 of everything you earn.)
2. Control your expenses. (Live within your means. Don’t spend more than 90% of what you earn).
3. Make your gold multiply. (Invest wisely).
4. Save your treasure from loss. (Research your investments in advance. Don’t be tempted by get-rich-quick schemes.)
5. Make your home a profitable investment. (Buy your own house and land instead of paying rent, but buy a house within your means.)
6. Secure a future income. (Do you want to work until the day you die? Or become a burden on your children when you can’t work? Plan for retirement.)
7. Increase your ability to earn money. (Study and learn what you can so that you are wiser and can make better investments.)
Chapter 4: Meet the Goddess of Good Luck
Arkad, the richest man in Babylon, was at the learning center. All men could speak freely in the learning center, whether they were slaves or princes. The topic of conversation that night was luck. They discussed how gambling halls have always been to the benefit of the house, and that most of the “luck” is actually just men of action seizing opportunities. The chapter ends with “Men of action are favored by the Goddess of Good Luck.”
Chapter 5: The Five Laws of Gold
Arkad, the richest man in Babylon, did not believe in the custom of his eldest son living with him in the preparations to take over Arkad’s wealth. Many firstborn who did this wasted wealth and did nothing for themselves. Then, when the son came of age, Arkad gave him a tablet with his five golden laws inscribed on them and a bag full of gold. He told his son to take the tablets, the gold, and leave the city of Babylon. The son would return in ten years and be accountable for himself.
Ten years later, his son returned, with his wife and two children in tow, and told his story. After losing all his money, he had to start over. Only then did he read his father’s tables and put the laws of gold into practice. The five laws of gold could be rewritten like this:
1. Save no less than one-tenth of your income.
2. Find ways to multiply your gold.
3. Seek the advice of the wise in handling your gold.
4. Don’t invest in companies you’re unfamiliar with.
5. Don’t get involved in get-rich-quick schemes. If the investment seems too good to be true, it probably is.
Chapter 6: The Gold Lender in Babylon
Rodan, a spear maker, was rewarded by the king for an incredible design for a spearhead. The king gave Rodan 50 pieces of gold. After a few days with the money in his wallet, Rodan went to visit Mathon, a moneylender. He sought Mathon’s advice and met him for dinner.
Mathon taught Rodan that he had to be cautious and not give away his money. Invest in solid investments. Rodan’s sister wanted him to loan the money to her husband so that he could be a merchant. Rodan’s brother-in-law was not good at handling money, and after talking to Mathon, Rodan realized that it would not be wise for Rodan, his sister, or his brother-in-law to loan him the money.
Chapter 7: The Walls of Babylon
The Walls of Babylon were tall and strong and held off attackers for centuries. In this parable, a guard calms many people when they approach him and ask him when the siege will end, if the wall will stand, and how they will survive. The guard calmed the people down.
The lesson of this chapter was to plan ahead and protect yourself.
Chapter 8: The Babylonian Camel Trader
One man, Dabasir, tells how he went from slave to rich. The lesson of this story is “Where determination is, a way can be found.”
Chapter 9: The Clay Tablets of Babylon
A teacher and his wife in modern times (1920s) translate and read ancient Babylonian clay tablets. They put the lessons into practice and get rid of debt, and they get better financially in two years. The tablets tell the story of Dabasir (from Chapter 8, The Camel Trader) and how he went from poor to rich.
Chapter 10: The Luckiest Man in Babylon
Sharra Nadu was leading a caravan with Haden Gula, the grandson of her former partner and friend. Haden and his father squandered the deceased grandfather’s wealth and blamed her for not knowing the secrets to attracting gold. In what is arguably the best chapter in the book, Sharra Nadu tells her story, and the story of Haden’s grandfather, to Haden. Haden learns that Sharra and her grandfather were slaves, that work is a good thing for all men, not just slaves, and how extraordinary her grandfather was.
Should you read this book?
Definitely. This book is entertaining only as a story. I’m going to read one chapter a night to my kids as bedtime stories, and I think I’ll repeat this every few years. This book will surely be on my kids’ list of things to accomplish before leaving home. My dad was wise.