Review of The Richest Man in Babylon by George S. Clason

The book: The Richest Man in Babylon by George S. Clason is one of the must-read books that provide readers with relevant lessons for gaining wealth and financial freedom. Published in 1926, the book shares the lessons in the form of fables that take place in the dominating city of Babylon, thus being informative and entertaining at the same time. Despite having been penned almost a hundred years ago, the principles can still be used as a guide in today’s society where many are either unable or do little to save, invest or plan for the future.

The present work is a review of The Richest Man in Babylon and thus will offer the consideration of main themes, advantages, and potential consequences for readers, as well as some of the book’s shortcomings. It does not focus on complicated philosophies but that which is basic and easily understandable by anyone including the poor. Thus, having been inspired by the literature of ancient Babylon, Clason provides people with recommendations for constructing a fortune.

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Overview of the Book

The ‘The Richest Man in Babylon’ is a collection of short stories that teach personal finance and wealth idol through characters that live in the ancient city of Babylon. These are silent picture stories detailing practical lessons about finance set in Babylon, the city that was reputed to be one of the richest and most developed at the time.

It is a book with no protagonist but one of the main characters is Arkad, a man who rose from rags to riches in Babylon. As Jim Kahns travels through the bends of life, one gets to understand the concept of FAST, save, invest and never incur debts. Two other characters; Bansir, Kobbi and Dabasir also learn from their financial gains and losses.

Every story serves different lessons on wealth in the context of Babylon that Clason uses to represent today’s society. Although the plot is set in the Old World, the ideas given are quite New Age, which will make the book interesting to modern audiences.

Key Lessons and Principles

The essence of The Richest Man in Babylon consists of seven major rules, also known as the Seven Cures for a Lean Purse and five major laws called the Five Laws of Gold which shape the entirety of Clason’s work and make the trip throughout this book.

1. The second is the Pay Yourself First principle and the current one is to save 10% of the income.

They include: The first one is paying yourself first, it is one of the best laws which the author of The Richest Man in Babylon teaches. According to Arkad, everyone should set an aim to always save 10% of their earnings even if they earn a big salary. This is because by practising saving a part of their wages regularly, people can build up wealth.

This principle has aspects of hardships and patience as the key constituents of this principle. Leaving out the portions of the earned money is advisable as specified by Clason instead of spending entire earnings satisfying today’s adrenaline. Even to date, this lesson is pertinent going by the current world economy where people are more willing to spend than to save.

2. Live Below Your Means

The last vital principle in the book is the principle that one should spend less than he or she earns. This is a concept that Arkad uses to make people understand that they shouldn’t always satisfy their wants. Most of the time one is tempted to go overboard and spend on frivolous items only to end up in huge losses.

Thus, by, for instance, keeping tabs on expenditures, one would avoid reaching a situation where he or she lives from salary to salary. This principle is very connected with the first one as it helps people to save and invest part of their revenue. Clason’s message is clear: People sometimes forget that to achieve financial success there is aa need for people to be disciplined and avoid extravagance.

3. Invest Wisely

The third big concept that Clason expounds on is the concept of wise investment. Savings by itself cannot create wealth hence individuals must employ their savings by investing them in profitable activities. Arkad also takes time to caution the public against indulging in pyramid schemes which offer handsome profits in the shortest time possible but are very dangerous investments.

However, this book does support appropriate and wise investment as the best way of getting back the much-needed lost wealth. According to Arkad, people should consult professional investors with adequate knowledge in the matter before investing their cash. This principle brings out the importance of budgeting and the need to know where our money is being spent.

In today’s world, this advice will entail learning about stocks, bonds, mutual funds, and real properties. Also, Clason’s words about financial dishonesty remain germane, as investors are attracted by high risks, which guarantee a high income.

4. Avoid Debt

As you will learn from The Richest Man in Babylon, debt is one of the greatest enemies of wealth. According to Arkad, it is akin to forgoing services better to perform these with caution and in cases of necessity. Debt that is taken beyond its reasonable limit can lead a person to make endless successful payments that diminish his ability to save.

Looking at Clason’s advice related to debt, it will be pertinent to mention that the present generation is embattled with credit card balances, student loans, and mortgages. The lesson here is clear: frugal lifestyles and ability not to indulge in debt are some of the essential lessons to practice to obtain financial freedom.

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5. Knowledge is Power and Financial Literacy

This is another great lesson that the author has brought out for people to understand as they embark on their various businesses. According to Arkad; some people need to look for information and help in some fields especially in the financial field. This way individuals can make good decisions on their money without falling prey to some of the pitfalls.

This principle concerns the problem of financial literacy which is still present in the world. A large population suffers from financial illiteracy, which equals poor investment, improper spending and management of funds. Clason assures readers the fact that they are solely responsible for financial literacy but it’s okay to seek help when needed.

The Seven Cures for a Lean Purse Francesco Sannella 5/3/2003 License: Standard The author and the licensee make no warranties as to the accuracy, durability or fitness of the copyrighted material.

In one of the sections of the book equipped with the title “Seven Cures for a Lean Purse,” Arkad reveals actions that will lead to a wealthy life. These cures are a valuable guide to how to amass wealth and contain valuable lessons on the topic of money.

Start thy purse to fattening: This cure relates towards the act of saving a segment of the income that one has been earning.

Control thy expenditures: This cure encourages people to live a frugal life and avoid wast of money.

Make thy gold multiply: Here, Arkad suggests to his readers to invest their savings properly to increase his or her capital.

Guard thy treasures from loss: This cure portrays the foundations of sound investment decision-making or otherwise risky investment.

Make of thy dwelling a profitable investment: Arkad promotes owning a house as a way of investing as he believes that investing in a house is much better than investing in the market.

Ensure a future income: This cure very much makes people advised for their economic future, for example, how they are going to provide for themselves in old age.

Increase thy ability to earn: Last of all, Arkad stresses that the so-called ‘education’ should be continued to improve one’s income.

Five Laws of Gold

1-Of special interest is the “Seven Cures,” and “Five Laws of Gold” presented by Clason, which are the principles that guide the management of money. All these laws help in formulating principles of amassing and preserving property.

2-Gold returns gladly and in greater abundance to the man who saves no less than one-tenth of his income to invest into a fortune for himself and his progeny.

3-Gold goes on working faithfully and happily for the intelligent employer who gets value out of it, and gets an increase out of it as the flocks of the pastures.

4-Gold adheres to the safe custody of the conservative buyer who buys it with the guidance of the people who fully understand the commodity.

5-Gold slips from the man who employs it in enterprises or for objects with which he has no conversance or which are not endorsed by those who are trained to handle it.

Gold runs away from the man who would compel it to unrealistic profits or who obeys the siren call of swindlers or who turns it over to his own ignorance and sentimental dreams in financiering.

These laws encapsulate the book’s approach to wealth-building: that is regular basis, invest, seek financial advice, minimize risks, and be patient.

Strengths of the Book

Perhaps the biggest advantage of The Richest Man in Babylon is considered its simplicity. As with most fables and parables, Clason draws the readers through the use of relatable examples making it easier to grasp the financial principles being espoused. The stories are concise and can easily be summarized and since they are memorable, they remain in the heart of the reader.

A former strength is that the recommendations made are timeless. There is no question that much of what was written in the book was composed almost one hundred years ago, but the philosophy behind the book is just as pertinent in today’s world as it was during the time of ancient Babylon. This belief about savings, investment, and debts is relevant in today’s world in which individuals’ finances are much more significant than before.

Another relevant strength that is derived from the book is that it speaks about personal responsibility and discipline. Clason’s message is clear: There is no fatality about wealth, and that is why people say that wealth is the child of prudence and Industry. This empowering message will make the readers take the initiative in the management of their finances.

Limitations of the Book

Despite this, The Richest Men in Babylon is a worthy reference source on matters of personal finance, though it has certain drawbacks. The first possible criticism is, to some extent, the book is very practical and its recommendations are very general. For instance, the recommendation to save ten per cent of their income may be impossible to embrace for some people, considering that some of them are struggling to make ends meet due to high expenses and bills.

Also, the book points the finger at a person and therefore does not look at the broader systemic factors that might impact success financially. Aspects like poverty, poor financial literacy and social constraints which are core issues influencing peoples’ decisions in the economic world are missing in his work. Although the strategies presented in the book can be described as somewhat realistic, the book may not provide an adequate representation of the issues one has to face when in a worse financial situation.

A third limitation, as has been mentioned, is that the book does not offer much detail about the mechanics of investing. Although Clason encourages his readers to consult with other investors, he does not explain in detail various money investment specialities and types. Therefore, readers may require sourcing other books to complement this work as much as investment is concerned.

Conclusion

The Richest Man in Babylon has remained one of the most popular works of fiction which has lessons on business and finance. The primary goal of George S. Clason is to make people learn how one could manage to become financially successful while telling funny stories of ancient Babylon. Most of the book’s message is still pertinent in the present day: saving money, living frugally, investing, and avoiding credit.

Overall, this book has a simple approach and is thought-provoking with very little focus on systemic financial problems, however, everyone seeking a better way to transform his or her financial status should use this book as a basic reference. These spheres of life remain very important now as Clason’s approach to personal responsibility, discipline and lifelong learning.

In conclusion, The Richest Man in Babylon is a book that anyone who wants to be financially informed and forward will need to take time and read. It does not matter if you are a beginner in the financial world or whether you intend to brush up on your financial skills, Babylon gives you an ideal guideline towards wealth acquisition.

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