Book Review: The Richest Man in Babylon
The “Richest Man in Babylon” is a book made up of a series of pamphlets that were written by George S Clason in 1926. These pamphlets contain a plethora of knowledge about finances and managing your wealth. Clason uses a series of tales that are staged in ancient Babylon to communicate his valuable ideas. The way that the applications of money handling are applied to these stories makes them engaging, but also very informative and practical. So practical, in fact, that they can be applied by those of modern day and be used to an even greater reward than they could almost 100 years ago when they were written. In the following pages, the most pronounced of Clason’s glorious stories will be summarized and evaluated so that every ounce of their worth and purpose can be seen.
The first section is titled, “The Richest Man in Babylon”, like the book. This chapter tells the story of Arkad, one of the richest men in Babylon, who is approached by his friends hoping he will unveil his source of wealth. Arkad tells them of his story of rise to riches. He began his life as a tablet maker, constantly laboring, but never having any money left to show for it. To cure his lean purse, he pursued a rich man in the city to tell him the secret to wealth. The man, who was named Algamesh, tells him just that.
“Every gold piece you have is a slave to work for you. Every copper it earns is its child that also can earn for you. If you are to become wealthy, then what you save must earn, and its children must earn, that all may help to give to you the abundance you crave.” Arkad began to do just as Algamesh said, however, once Arkad had saved enough money to invest, he made unwise decisions and lost his savings. Again, he began to save and learned his lesson from the first time and invested wisely.
He continued to compound his wealth and expand it. This lead to Arkad possessing more gold to invest and before long, Arkad had become one of the richest men in the city of Babylon. In the second section titled, “Seven Cures for a Lean Purse”, Arkad is approached by the King of Babylon, who asks if Arkad would be willing to communicate his knowledge of saving gold to those of the city. Arkad agrees and thus writes up the “Seven Cures for a Lean Purse”. The first cure: “Start thy purse to a fattening”. Arkad explains that to accomplish this, one must spend less than he earns. A person must alwayssave one-tenth of all he earns if he wants to “fatten his purse”. Arkad explains that this is the basic and most useful cure. The second cure: “Control thy expenditures”.
To accomplish this Arkad says that a person must budget his spending. This is so a person can always provide for himself and his family a supple living, while never spending more than nine-tenth of his income. The third cure, “Make thy gold multiply”. Arkad explicates that in order to make the most out of your saved gold, a person must make it work for him by investing it. I the gold can then grow exponentially, and fatten thy purse even more. Arkad warns however, that this is also where much danger lies for your fattened purse. The fourth cure: “Guard thy treasures from loss”.
Arkad cautions that in order to secure prosperous investments, you must invest wisely. You would not entrust your coin to a saddle maker to buy precious jewels for you to sell, for that is foolish. He advises that if you must invest, invest “where thy principle is safe” and to “consult wise men. Secure the advice of those experienced in the profitable handling of gold.” The fifth cure: “Make of thy dwelling a profitable investment”. In short, Arkad states that a person must own his own house.
This is so a person will avoid owing money to pay for his own home and thus his cost of living will be reduced. Consequently, it provides himself with more coin to use for his pleasure. The sixth cure: “Insure a future income”. Arkad articulates that life is precious and it can end at any moment. Thus, a man must have an ever growing surplus, so that when he dies, his family will have enough to support themselves. The seventh cure: “Increase thy ability to earn”. Arkad simply states that a person cannot stay idle with his advancement of wealth, or else it will cease to grow. A man must “cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself.”
The next section of the book is designated, “The Goddess of Good Luck”. Again, Arkad is approached for advice by his friends. This time they inquire about his opinion on luck and how to attract her blessings so that they might increase their coin. Arkad explains that luck is not comprised of winning bets; that is only coincidence. Instead, luck is a blessing to men of action. When an opportunity arises that a man can prosper from and he takes advantage of it, then the goddess of luck looks with favor upon him.She will then send more of these opportunities his way. Nevertheless, when a man does not take advantage of such instances, he will surely drive her blessings away.
The following story is about the “Five Laws of Gold”, which again revolves around Arkad. Conversely, this time he is testing his son to see if he should acquire his generous inheritance. To do so, Arkad sends him out into the world with only a tablet inscribed with the five laws of gold and a bag of gold. Arkad hosts a feast when his son returns and has him present to him his adventures. Arkad’s son tells of how he squandered his father’s gold gift until he had nothing left of his own but the tablet. He then began to read the five laws of gold and put them to use. This provided him with the ability to re-acquire three times the original gold his father had given him.
Arkad looked proudly upon his son as he blessed him with his inheritance as he read the five laws of gold: “ I.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 II.Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. III.Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling IV.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.
V.Gold flees the man who would force it to impossible earning or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. Following this account is a chapter titled, “The Gold Lender of Babylon”. It recounts the advice of a gold lender in Babylon, named Manthon, on how to handle debt, loans, and investments. Manthon first shows a chest he has which contains articles from those who he has lent money to, until they repay their loan. He tells of how eager people are to spend, but not to save.
Thus, they end up in debt or acquiring unwise loans. If someone comes to you for a loan, you must understand what they will use it for and their ability to repay it. It is hard to acquire stores of gold and, if you lend it out unwisely, you will lose your wealth. As a result, it is better to use a little caution, thanhave a great regret. In the final two major passages of the book, Clason conveys the story of a man named Dabasir. Dabasir was put into debt by uncontrolled spending. He ended up losing his wife and home and was sold into slavery because of his debt. As luck would have it, after telling his story to the daughter of his owner, she helped him escape on the promise that he would no longer act like a slave to money, but instead be a free man and use it wisely.
He returned to Babylon and held true to his promise. The timeline of how he accomplished that was written upon stone tablets. Many of the ways he raised himself from the chains of debt were derived from the “Five laws of Gold”. He saved ten percent of all he earned and took another twenty percent of his income and put it towards his debt. He continued to do this until he had paid off all of his debtors. Dasabir takes budgeting a step farther than Arkad and instructs that a person should live off of no more than seventy percent of his budget. Thus he will always have a surplus and never be in trouble or need. In the end, Dasabir was able to get his wife back, own his own home, be prosperous, and most importantly of all, earn the trust of every single one of his debtors.
Despite “The Richest Man in Babylon” being written almost one hundred years ago, it is more applicable today than ever before. These rules and ideas about managing your money can save someone from becoming a slave to the lender. They also provide someone with the ability to set themselves up for life worry-free and full of luxury. This book is very valuable and should be read and studied for many generations to come. Money will always be an issue. It is the basis for human advancement and trade, however, it does not have to control its user. Even more so, if its user learns to wield it wisely and skillfully, money is a very treasured and valuable asset.