It might feel like we are not all equally blessed with money, opportunities and wealth, but perhaps that’s not the full story. Perhaps we are not all equally blessed with the knowledge of how money works. At least, that is what George S. Clason teaches in the Richest Man in Babylon.
What is the Richest Man in Babylon about?
In the early 1900s, George S. Clason wrote a series of pamphlets which went on to become hugely popular. He shared secrets in good money management and financial success, through parables set in ancient Babylon to illustrate his points. One of these parables was named the Richest Man in Babylon, and this is also the title which the full collection of stories has been named after.
The fables all teach a similar message, but through different stories and in differing depth. They are set almost 6,000 years ago and are written to show that some things never change. And the laws of money are one of those things.
What was true then, is still true today.
What does the Richest Man in Babylon teach?
The Richest Man in Babylon is not a true story, but a set of parables written to teach some very important lessons about money. In fact, the different stories often cover the same information, but in different ways. Remember, they were originally published as pamphlets so a person wouldn’t have sat down and read them one after another.
Personally, I like having the message written in different ways. It’s a great way to drive home the key points.
The first two stories, “The Man who Desired Gold” and “The Richest Man in Babylon” are a great introduction to these key points. These stories go hand in hand to tell a story of Bansir and Kobbi, two friends who are tired of working hard but never really getting ahead. They decide to go and visit an old friend of theirs, Arkad, who has been very successful in his life and ask him for advice on how they too can become more successful.
Arkad teaches them three lessons in finding financial success.
1. A part of all you earn is yours to keep.
The first lesson is how to acquire money. If you’ve never heard of the 10% rule when it comes to savings, it says that whatever you earn (whether it’s ten dollars or a hundred dollars), put 10% aside for savings. I learnt this lesson really young, and I can personally vouch for it’s effectiveness (now I just need to keep working on lessons 2 and 3!).
When you do this you learn to live off the 90% and this does two good things for you. First, it teaches you to live within your means. If you’re constantly overloading your credit card, and spending more than you actually have coming in, there is no good way out of that situation. You’ll never get ahead with your money. And second, you’ll learn the importance of delayed gratification over instant reward. You’ll have a little savings put aside that will grow steadily. Watching this grow can give you a sense of security and satisfaction that you might just find a little more rewarding than going out and buying the latest trendy handbag or new pair of shoes.
2. Seek advice from those that are competent to give it.
The second lesson is how to keep your money. Don’t gamble it away, don’t let it slip through your fingers and don’t take advice from people who haven’t mastered these lessons themselves. This is a lesson I didn’t learn so early on. 😢
I’ve wasted money on risky investments that tempted me with high rewards. They didn’t pay off! Sometimes you just have to learn from your mistakes and move on.
3. Make your money work for you.
The final lesson is how to make your money work for you. This is the key lesson you’ll also find in books like “Rich Dad, Poor Dad“. Using your money to make more money. This is really the way you can learn to step away from the daily grind. Once you learn this lesson, you are no longer tied to being paid an hourly wage. If you thought the only way to make more money is to work harder, you’ll love this one! Once your money is working hard for you, you don’t need to!
Why should you read the Richest Man in Babylon?
While it’s true money can’t buy happiness, having control over your finances will give you options in life. It allows you to plan ahead, to take advantage of opportunities that might come up and to pursue things in life in a more meaningful way.
And whether you are just starting out in your working life, or decades in, it’s always the right time to learn to manage your money better. These books will teach you these lessons in such a clear way that the message will stay with you long after you’ve read the book.
I first read these books when I was in my 20s, and every few years I come back to them. They make for a quick read and really remind me of what good money management is all about.
Ready to learn some money lessons from the Richest Man in Babylon?
In this short ebook you will read the first two of these stories – “The Man who Desired Gold” and “The Richest Man in Babylon”.
The original version uses older language, a lot of thou’s and thee’s, and can be hard to read. So I’ve rewritten the stories in plain English for you so that you can focus on the message, rather than just trying to understand the words! I think this is such an important message – it’s worth reading ten times over!
Grab your free copy below and start your own path to financial success.
2 thoughts on “Finance 101: A summary of ‘The Richest Man in Babylon’ + free eBook (PDF)”
Enjoyed this post and very much appreciated having easy access to the parable and its reminder not to splash away your hard earned cash on junk. Seems you can never be told the basic facts of money management too many times.
Thank you! Yep, definitely a lesson that needs to be learnt a few times over. 🙂