The Richest Man in Babylon by George Samuel Clason is a success classic, used regularly in the New Thought prosperity classes. The book was published in 1926, containing the parables set in ancient Babylon, that the banks and insurance companies were distributing in large quantities.
The book contains ten parables (short stories), each with its own message. In each parable the characters learn simple lessons in financial wisdom through their experiences in business and managing household finance.
In the Foreword, the author says that the prosperity of a nation depends upon the personal financial prosperity of each individual, just like “Babylon became the wealthiest city of the ancient world because its citizens were the richest people of their time”.
- Historical Sketch of Babylon. Clason talks about the city of Babylon and the prosperity of its citizens who succeeded in becoming the wealthiest city in the world even though Babylon possessed just two natural resources—a fertile soil and water in the river; he says that “they were an educated and enlightened people. So far as written history goes, they were the first engineers, the first astronomers, the first mathematicians, the first financiers and the first people to have a written language.”
- The Man Who Desired Gold. The first parable is about Bansir, a chariot builder, and his friend Kobbi, a musician. They talk about how much money they had earned over the course of their lives, and how little they had to show for it now. Then they decide that there must be a secret to acquiring gold, and they go ask for advice their childhood friend Arkad, who is the richest man in Babylon.
- The Richest Man in Babylon. The two friends ask Arkad how come he’s so rich and they are so poor, even though they’ve worked harder than him. Arkad tells them about a man he met while he was a hard working scribe, Algamish. Algamish was a very rich man who needed a copy of a law immediately scribed into clay, so Arkad agreed to do that in exchange for the secret to wealth. Algamish told him that the secret was that a part of all he earns is his to keep. So he started regularly saving at least a tenth of his income, and investing it. After he made a few bad investment decisions, and finally learned how and where to invest his money, Algamish was so pleased with Arkad that he hired him as a manager of his estate.
- Seven Cures for a Lean Purse. The King of Babylon has learned from his Royal Chancellor that the kingdom is poor, and that all gold is in the hands of a few rich men. The King then decides to summon Arkad to teach everyone how to become wealthy. The first cure that Arkad teaches 100 men gathered in front of him is: Start thy purse to fattening – for every ten coins that they place within their purse, they should take out only for use but nine. The second cure is: Control thy expenditures – they shouldn’t confuse necessary expenses with their desires, all men are burdened with more desires than they can gratify. The third cure is: Make thy Gold Multiply – they should put the money they saved to work earning interest. The fourth cure: Guard thy treasure from loss – they must assure their investment from risk of loss, and consult with wise men. The fifth cure: Make of thy dwelling a Profitable Investment – “Own thy own home”, because it’s better to pay the mortgage and to have a house to show for it after a while than to pay rent to a landlord. The sixth cure: Insure a Future Income – “provide in advance for the needs of thy growing age and the protection of thy family”, foretelling the future creation of life insurance companies. The seventh cure is: Increase thy Ability to Earn – in order to make his life rich with gainful experiences, a man must: “pay his debts with all the promptness within his power, not purchasing that for which he is unable to pay, take care of his family, make a will, have compassion upon those who are injured and smitten by misfortune, cultivate his own powers, study and become wiser, become more skillful.”
- Meet the Goddess of Good Luck. Arkad talks with a group of men, telling them that the Goddess of Good Luck smiles upon those who work hard, save their money, and invest well. “Men of action are favored by the Goddess of Good Luck.”
- The Five Laws of Gold. A new character is introduced, Old Kalabab. He tells a story of a man named Nomasir. When Nomasir went out to make his way in the world, his father told him the five laws of gold. Nomasir lost the money that his father gave him, but he remembered the laws of gold, and using them, he later became rich. The parable ends with Kalabab stating: “Without wisdom, gold is quickly lost by those who have it, but with wisdom, gold can be secured by those who have it not, as these three bags of gold do prove.” The laws of gold are:
- 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.
- Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
- Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
- 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 skilled in its keep.
- 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.
- The Gold Lender of Babylon. Rodan, a spearmaker, who received fifty pieces of gold from the king, seeks out Mathon, a money lender, to ask for the advice on what he should do with the gold. Rodan’s sister wishes that he gives the gold to her husband, so that he might become a merchant. Mathon then gives him the first advice: If you desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself, through a story about the donkey and the ox. The second advice is: Better a little caution than a great regret – he should be careful about who he will lend the gold to, showing him his box of security tokens and telling him about the people who have left them.
- The Walls of Babylon. This is the story of Old Banzar, a soldier who guarded the gates of the wall of Babylon for four weeks, while battle was raging in front of the walls. The height and breadth of the impenetrable walls ultimately repulse the invaders. The morale of this story is that “in this day, behind the impregnable walls of insurance, savings accounts and dependable investments, we can guard ourselves against the unexpected tragedies that may enter any door and seat themselves before any fireside.”
- The Camel Trader of Babylon. Tarkad had nothing to eat for two days. He meets Dabasir, a camel trader, a man that Tarkad owes money to, and Dabasir invites him into the eating house where he orders food for himself and water for Tarkad. Dabasir talks about how he once lived an extravagant lifestyle, beyond his means, and, due to the constant hounding of creditors, he ran away from Babylon, falling in with some caravan robbers. They sold him as a slave in Damascus. When he tried to explain to his master’s oldest wife that he wasn’t really a slave but a free man, she protested that he couldn’t call himself a free man when his financial weakness has brought him to such ruin. He later escaped back to Babylon, faced his creditors and eventually repaid everything he owed.
- The Clay Tablets From Babylon. A fictional professor of archaeology, Alfred H. Shrewsbury, presents the ancient Babylonian stone tablets which tell the story of Dabasir:
- Tablet 1: Dabasir vowes to save one-tenth of all he earns, that he will support and clothe his wife and pay for their house, their food, etc., with seven-tenths of his income, and use the remaining two-tenths of his income to repay his creditors.
- Tablet 2: Dabasir will take the two-tenths that he has saved and split it amongst his creditors each month.
- Tablet 3: Dabasir states that he is determined to repay his creditors.
- Tablet 4: Dabasir states that in the past three months he did indeed save one-tenth of his income for his retirement and to invest and that he saved two-tenths of his income to repay his creditors.
- Tablet 5: Twelve months later, Dabasir just finished repaying his creditors.
- The Luckiest Man in Babylon. Sharru Nada, a merchant prince of Babylon, is riding with Hadan Gula, the grandson of his deceased business partner Arad Gula. Sharry asks Hadan how a rich man should live, and the young man replies that he should live as richly as he could, and that work was made for slaves. Sharry then tells him how he and Hadan’s grandfather became partners: he was once a slave bought by a baker. He was so dilligent and willing to work that his master let Sharru keep a portion of the extra money that was being made. One of Sharru’s loyal customers was Arad Gula, another slave who was about to buy his freedom. He did it and became a merchant, and later he bought Sharru’s freedom as well and asked him to become his partner because he knew how industrious Sharru was. Then Arad’s grandson understood that the key to acquiring wealth is work.
The stories are laid out like Aesop’s fables: each story has a concrete point or two that becomes apparent from reading and digesting the message. These points are basic tenets of how to get ahead financially in any time, not just in Babylonian times or in the 1920s. This book is perfect if you learn by reading the experiences of others.
Soon, after the fifth reading, the the principles became habits for me. My wealth esculated at a very rapid rate. I was no longer wasting money. I was now investing the first 10% of my income, tithing 10% and investing another 10% in capital like no load mutuals, real estate, discounted mortgages, tax liens and my own business. (…) The Richest Man in Bablyon is an excellent book. Although only 145 pages, it is packed with powerful information that can be life changing.
I have always found books on personal finance exceptionally boring and have avoided reading them because of this. This book however takes the form of stories from Babylonian citizens each touching on an aspect of personal finance (save 10% of your earnings, don’t rent but rather own property and invest your money wisely so it may grow etc etc)
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