Takeaway
- You become richer when you spend less than you earn.
- You become richer when you invest the money you have spared.
- Buying your own house helps become richer.
What The Richest Man in Babylon Is About
The Richest Man in Babylon is a book written by George S. Clason. It tells several stories of courage, work, and wisdom surrounding the theme of money. The book explains principles such as that you can become rich when you spare the money you earn, invest it into a company you understand, and study ways to make more money.
The stories focus on heroes who for the most part, hustled their way out of slavery to become rich merchants in the city.
The Richest Man in Babylon embodies the eternal principles related to good money management. Its lessons are timeless.
These lessons won’t make you a millionaire, but they are a definite good base to teach children (or conspicuous spenders) the philosophy of money.
I did not summarize all of the stories as some were irrelevant regarding building wealth.
Nonetheless, you can consider this summary complete.
Enjoy!
8/10.
Summary of The Richest Man In Babylon by Georges S. Clason
The book starts with Bansir, a carriage builder.
Bansir is poor, and he doesn’t understand why. He complains to his friend that since Babylon is a prosperous city, shouldn’t he be rich as well?
To answer this question, the two friends go visit Arkad, the richest man in Babylon, to ask him why he is rich while Bansir is poor.
Arkad explains them he always wanted to be rich, so he studied how to become so.
Arkad started as poor as everybody else, as a scribe.
One day, he asked the lender how he could become richer. The lender taught him three lessons.
First, Arkad should not spend all the money he earns.
Every time he earns ten coins, he should at least keep one for himself.
Second, Arkad should invest his money but not in any businesses. He should talk to competent and trustworthy people so that he doesn’t lose his capital.
Third, the money he invests will make more money for him, which will make more money for him, in a virtuous circle.
When the King came back to Babylon, he heard some terrible news. The people did not have any more gold to buy anything.
“Where is the gold, the king asked.
– It seemed everything went into the pocket of a few men.
– How did these few men manage to get everyone’s gold?
– Because they knew how to get it.
– Could we teach what they know to everyone else?
– Yes, but who will teach them?
– Who knows how to best become rich?
– The richest man in Babylon.
– Good. It’s Arkad. Bring him to me tomorrow.
The next day, Arkad was brought to the King who asked him to teach people how to become rich.
Arkad accepted and promised to teach the seven principles of wealth.
He began by teaching in front of a hundred people.
The first principle: for every 10 coins earned, only spend 9 of them.
The second principle: make a budget to control your spending.
The third principle: invest your money so that it makes you more money.
The fourth principle: protect your investment. It is tempting to invest in high-yielding projects, but these are riskier as well. If you lose your capital, you will have to start from zero. Study well the opportunities you seize.
The fifth principle: buy your own house.
The sixth principle: make sure you have enough money for your future.
The seventh principle: increase your knowledge of earning money. Your desire to acquire wealth must be great. First, start small and acquire a fixed amount of money (become better at your job). Then acquire more and more.
The next story sees Arkad discussing with a group of citizens in the palace of knowledge.
The topic is luck. What is luck, and how do you attract luck?
Several citizens tell stories of how they were presented with opportunities that they didn’t seize due to fear or hesitancy.
After a while, the opportunity had gone, and they regretted not having seized it.
Arkad concluded that luck happens to those who take action, and seize the opportunity when it presents to them.
As he was sitting around a fire with his men, the old Kalabab asked them a question.
“What would you choose: a pouch of gold, or a book of wisdom on how to acquire gold?
– The gold! The gold, answered the men.”
Kalabab explained them that gold belonged to those that know how to get it.
To reward them for the good work of the day, he decides to explain the 5 laws of gold.
Kalabab told the story of Arkad, the richest man in Babylon.
Arkad had a son, Nomasir.
He didn’t want Nomasir to inherit his fortune without knowing how to handle it.
So he gave Nomasir a pouch full of gold and a clay tablet with the five rules of gold, and he told him to live and travel for 10 years, then come back.
He would then judge if Nomasir was worthy of inheriting his fortune.
Normasir left and came back 10 years later.
He told his story.
In the beginning, he made a lot of mistakes and lost all of his money. Then he read the 5 rules of gold.
- Gold comes to the one who spares at least 10% of his monthly salary.
- Gold makes more gold for the one who invests it wisely
- Gold is protected as long as its owner carefully invests it
- Gold is lost when one invests it in enterprises one doesn’t know or in enterprises not advised by those who know how to invest.
- Gold flees from the one who asks impossible returns.
Nomasir started to apply these laws.
He got a job and spared his money. Then he invested it into a reasonable enterprise.
When he came back to Babylon, he gave his father Arkad one pouch of gold, the same he had had when he left, and two more to thank him for the five laws of gold.
Rodan is the manufacturer of spears in Babylon. For his good work, the king gave him 50 coins of gold.
Soon, everyone started asking Rodan for a loan.
Rodan didn’t know what to do. So he went to get advice from his friend Mathon, the gold lender.
Mathon told him that if he wanted to help his friends and family with a loan, he should be careful not to end up doing the work for them.
He told Rodan that he is free to lend his gold, but that he should make sure that the borrower can pay him back.
A bit of caution is better than a lot of regrets.
For more summaries, head to auresnotes.com.
Image by Mariusz Matuszewski from Pixabay
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