Before leaving my dad’s house, my sisters and I would have to read various books and regurgitate the story, or the 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 lots 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 they were distributed by banks in booklet form. (I find it interesting that it started during the Roaring Twenties and prohibition.) The most famous parables were later compiled in the book, The richest man in Babylon.
Each chapter of the book tells a parable set in ancient Babylon, at 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. As you read the book, which I recommend you do, or at least have your teens read it, remember that each chapter is a different parable from a different pamphlet. That’s why the chapters don’t flow well together and why you don’t see one or two characters in the whole book.
Chapters 1 and 2: The man who wished for gold and The richest man in Babylon
Bansir, a car manufacturer, wondered one day why he had no money. He was a great car maker. His friend, who played the lyre, asked him to borrow some money. Bansir said no, I don’t have any. Then his friend asked him why he was sitting there staring at nothing when he was broke. Bansir told him that he was reflecting on his financial situation. They remembered that they went to school with a guy named Arkad.
Arkad grew up in the same financial situation as Bansir and Kobbi, but was now reputed to be the richest man in Babylon. They asked him for advice.
Arkad told them how he got rich, including how he got started, his early failures, and his early successes. The lessons that Arkad imparted to his friends were threefold.
1. Save at least 1/10 of any money you earn.
2. Invest your money wisely, so that it grows.
3. Invest the interest on your investments.
Chapter 3: Seven Cures for a Thin Purse
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 how to attract money. Arkad agreed and taught seven principles. Each day he taught a principle through a parable.
1. Start fattening your bag. (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. Protect your treasure from loss. (Research your investments early. 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 your retirement.)
7. Increase your ability to earn. (Study and learn what you can so that you become wise and can make better investments).
Chapter 4: Meet the Goddess of Good Luck
Arkad, the richest man in Babylon, was hanging out 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 card rooms always benefit the house, and that most of “luck” is really 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 having his eldest son live with him in preparations to seize Arkad’s wealth. Many firstborn who did this squandered their wealth and did nothing for themselves. Then, when his son came of age, Arkad gave him a tablet with his five gold laws inscribed on it, 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 give an account of himself.
Ten years later, his son returned, accompanied by his wife and two children, and told his story. After losing all of his money, he had to start over. He only then read the tablets of his father and put into practice the laws of gold. The five laws of gold could be rewritten like this:
1. Save no less than 1/10 of your income.
2. Find ways to multiply your gold.
3. Seek the advice of wise men in handling your gold.
4. Do not invest in companies with which you are not familiar.
5. Don’t get involved with get-rich-quick schemes. If the investment seems to be 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 gold pieces. After a few days with the money in his wallet, Rodan went to visit Mathon, a moneylender. He sought Mathon’s advice and joined him for dinner.
Mathon taught Rodan to be cautious and not give away his money. Invest in solid investments. Rodan’s sister wanted him to lend her husband the money so he could be a merchant. Rodan’s brother-in-law was not good at handling money, and after speaking with Mathon, Rodan understood that it would be unwise for Rodan, his sister, or his brother-in-law to lend him the money.
Chapter 7: The walls of Babylon
The Walls of Babylon were high and strong and kept attackers at bay for centuries. In this parable, a guard calms many people who come to him asking when the siege will end, if the wall will hold, 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
A man, Dabasir, tells how he went from being a slave to a rich man. The lesson of this story is “Where the determination is, a way can be found.”
Chapter 9: The Clay Tablets of Babylon
A professor and his wife in modern times (the 1920s) translate and read ancient Babylonian clay tablets. They put the lessons into practice and got out of debt and became financially better in two years. The tablets tell the story of Dabasir (from chapter 8, the camel trader) and how he grew from poor to rich.
Chapter 10: The Luckiest Man in Babylon
Sharra Nadu was riding at the head of a caravan with Haden Gula, the grandson of his former partner and friend. Haden and his father squandered the late grandfather’s wealth, blaming him for not knowing the secrets to attracting gold. In what is arguably the best chapter in the book, Sharra Nadu tells the story of him and the story of Haden’s grandfather to Haden. Haden learns that Sharra and his grandmother were slaves, that work is good for all men, not just slaves, and how remarkable his grandmother really was.
Should I read this book?
Definitely. This book is entertaining as a story. I’m going to read a 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 children’s list of things to do before leaving home. My dad was wise.
