The Richest Man in Babylon by George S. Clason Recap

This is my summary of The Richest Man in Babylon. The book is a short read, totaling just over 100 pages (regular print). The principles of wealth are told through stories set in ancient Babylon. These very same principles apply today just as they did then. I still encourage you to read the book, although I describe the main points very well here. The stories themselves may provide relevant meaning to your life.

  • Pay yourself first – save or ‘pay yourself’ at least 10% of what you earn; essentially you need to refrain from spending your entire income.
  • Control your expenditures (live below your means) – define what money is to you; define the difference of want vs. need;
  • Make money work for you – first thing is first (have enough money saved up 6-8 months worth); invest your money, but only in things you understand; stock market, real estate, business and compounding interest.
  • Guard your treasures from loss (insurance) – protect your wealth instead of complete financial loss.
  • The fifth cure for a lean purse is: Own thy own home; ”no man’s family can fully enjoy life unless they do have a plot of ground where the children can play in the clean earth and where the wife may raise good blossoms and herbs to feed her family’; ”to a man’s heart it brings gladness to eat of his own trees and vines…have it a place he is proud to care for.”
  • The 6th cure for a lean purse is: Provide in advance for the needs of thy growing age and the protection of thy family; insure investments or provision that may endure safely for many years, yet will be available in later life or when he is gone
  • The 7th cure for a lean purse is: cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself; the more wisdom we know, the more we may earn; preceding accomplishment must be desire, thy desires must be strong and definite; wealth is accumulated first in small sums, then in larger ones as a man learns and becomes more capable.
  • Luck does not exist in the fact that you or I will find a way to increase thy earnings or get rich by random luck (game tables, betting, finding 5K on the side of the road); we have to create our own luck in the sense that we must become more wise, more capable and work smart and hard to increase thy wealth. It will not just happen by pure luck or chance.
  • Opportunity waits for no man. Today it is here; soon it is gone. Therefore, do not delay!
  • Procrastinator – accepts not opportunity when it comes. He waits. He says I am much busy right now. Opportunity will not wait for such a slow fellow.
  • We are more apt to change our minds when right than wrong. Wrong, we are stubborn indeed. Right, we are prone to vacillate and let opportunity escape. My first judgement is my best.
  • Every man must master his own spirit of procrastination before he can expect to share in the rich treasures.
  • To attract good luck to oneself, it is necessary to take advantage of opportunities. Good luck can be enticed by accepting opportunity. Action will lead thee forward to the successes you desire.
  • 5 Laws of Wealth
    1. Wealth come gladly and in increasing quantity to any man who will put not less than 1/10 of his earnings to create and estate for his future and that of his family. Invest it wisely. Save!
    2. Wealth will labor diligently and contentedly for the wise owner who finds for it profitable employment. Opportunity!
    3. Wealth clings to the protection of the owner who invests it under the advice of men wise in its handling.
    4. Wealth slips away from the man who invests it in businesses or purposes with which he is not familiar or not skilled at. Trusting your own judgement on purposes you are not familiar or skilled with often leads to imperfect judgement and pays with your own wealth for the inexperience.
    5. Wealth flees a man who would force it to an impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts his own advice and romantic desires. Wise men know the risks that lure behind every plan to build great wealth suddenly.
  • Lending (Investing) & Borrowing
    • If you desire to help a friend (lend), do so in a way that will not bring the friend’s burdens upon you.
    • In lending (investing), if they borrow for purposes that bring money back to them, it will bring money back to you. If they borrow because of their indiscretions, it is with warning that you may not end up with proper repayment
    • Youth is ambitious. Youth will take short cuts to wealth and the desirable things for which it stands. To secure wealth quickly youth often borrow unwisely. Youth, never having had experience, cannot realize that hopeless debt is like a deep pit into which one may descend quickly and where one may struggle vainly for man days.
    • The wise lender wishes not the risk of the undertaking but the guarantee of safe repayment
    • The first desire of man and his money is for safety
    • The second desire of man and his money is to grow it larger
    • Better a little caution than a great regret
    • One cannot afford to be without adequate protection (insurance, savings accounts and dependable investments)
  • Where The Determination Is, The Way Can Be Found
    • The debts are thine enemies in this matter
    • If you have the soul of a slave (to society, to your debts) you will give up and die slowly
    • If you have the soul of a free man, you will repay your debts and bring happiness to your family
    • The soul of a free man looks at life as a series of problems to be solved and solves them, while the soul of a slave whines
  • Plan from one of the men in Babylon that will lead him out of debt and into self-respect
    1. Provide for future prosperity
      • 1/10 of all I earn shall be set aside as my own to keep
    2. Support the family (wife, children, etc.)
      • 7/10 of all I earn shall be used to provide a home, clothes to wear and food to eat; have a bit extra to spend so that life is not lacking in pleasure and enjoyment
      • Must live upon this portion and never use more nor buy what I may not pay for out of this portion
    3. Debts shall be paid
      1. 2/10 of all I have earned will be divided fairly among all those who I am indebted
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