The richest man in Babylon summary

The richest man in Babylon summary

The Richest Man in Babylon is one of the classic books on personal finance. The principal in this book is very simple and very powerful.

It is not that this book teaches you something you don’t know, but after reading this book you will start believing in these simple principles. 

This is a very short book, you can read it in one day. I must recommend that you read this book. 

Key takeaways

·       A part of all you earn is yours to Keep.

·       Pay yourself first. At least 10% of your income.

·       Investment is important, it helps to build wealth.

·       Advice is freely available, beware where the advice comes from.

·       Money is the medium by which earthly success is measured.

·       Money makes possible the enjoyment of the best earth affords.

·       Money is plentiful for those who understand the simple laws which govern its acquisition.

The man who desires the gold

In the city of Babylon, two friends Bansir and Kobbi. Bansir was a chariot maker and Kobbi was a musician. Both struggle financially, they do not have money to feed his family.

They have a mutual friend named Arked, who is the richest man in Babylon. They both decided to go to his friend to ask how to become wealthy.

The richest man in Babylon

“If you have not acquired more than a bare existence in the years since we were youths, it is because you either have failed to learn the laws that govern the buildings of wealth or else you do not observe them.”

Wealth is power. With wealth many things are possible.

As of study, did nor did our wise teacher teach us that learning was of two kinds: The one kind being the things we learned and knew, and the other being the training that taught us how to find out what we did not know?”

“I found the road to wealth when I decided that a part of all I earned was mines to keep.”

“Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you.”

A part of all you earn is yours to keep.” It should be not less than a tenth, no matter how little you earn. It can be as much as you can afford.

Pay yourself first

“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow.”

Take advice from those who you think have expertise in those fields. Never take advice for investment from a school teacher.

Advice is one thing that is freely available.

“Opportunity is a haughty goddess who wastes no time with those who are unprepared.”

“ A Part of All you Earn is Yours to Keep.”

Seven curses for a lean purse:

1. Start Thy(your) Purse Fattening: Start saving

For every ten coins, you placest within your purse take out for use but nine. Your purse will start to fatten at once and its increasing weight will feel good in your hand and bring satisfaction to your soul.

Start putting one-tenth of everything you earn. It helps your purse fatten.

2. Control Thy (Your) expenditure

Never spend more than you can Earn.

Your necessary expenses will always grow to equal your income unless you control your expenses.

Budget your necessary expenses. Do not touch your savings that are fattening your purse.

 3 Make Thy (Your) Gold Multiply: Make Investment

 Your money saved earns nothing for you unless you put them to work.

A man’s wealth is not in the money he keeps in his purse: it is in the income stream he generated which puts money in his purse: whether he works or travels.

This is what every man desires, to build a cash flow of income.

4 Guard thy (Your) Treasures from Loss

It is important to guard your wealth for losses.

Thus it is wise that we must first secure small amounts and learn to protect them before the gods entrust us with large.

“The first sound principle of investment is security for thy principal.”

Guard your treasure against loss by investing only where your principal is safe, where it may be reclaimed if desirable, and where thou will not fail to collect a fair rental. Consult with wise men. Secure the advice of those experienced in the profitable handling of Gold. Let their wisdom protect thy treasure from unsafe investments.”

5 Make of Thy Dwelling A Profitable Investment: Invest in homes

No man’s family can fully enjoy life unless they do have a plot of ground wherein children can play in the clean earth and where the wife may rise not only blossoms but good rich herbs to feed his family.”

“Own thy (Your) own Home”

6 Insure A future income: Plan for the future

 Invest for your retirement, retirement is a phase where you are not able to earn more.

There are always diverse ways by which a man may provide safety for his future. You can buy properties for long term investment, which will grow in value.

Provide in advance for the need of your growing age for the protection of your family.”

7 Increase the ability to earn: Invest in yourself

This principle is more about yourself than money. It says that you have to learn new things to earn more.

Invest in new skills. The skills and wisdom you have will never be stolen or lost.

“The more wisdom we know, the more we may earn.”

The seventh and last remedy for a lean purse is to cultivate your own Powers, to study and become wiser, to become more skillful, to so act as to respect yourself.”

Meet the goddess of good luck

 “ Men of Action are Favored by the Goddess of Good Luck.”

Five laws of Gold

“The gold is Reserved for those who know its Laws and Abide by them”

1st Law

Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earning to create an estate for his future and that of his family

2nd Law

Gold works diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

3rd Law

Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

4th Law

Gold slippeth away from the man who invests it in business or purpose with which he is not familiar or which are not approved by those skilled in its keeping.

5th Law

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 desire in investment.

Bottom Line

The best lesson you can learn from this book

“Pay Yourself First”

It requires discipline to Pay Yourself First. And it is the hardest step to follow.

The best way to Pay yourself First is to Automate your savings.

Always remember:

“A part of all you Earn is Yours to Keep”

Make investment

Your money invested will work for you and help build wealth over a long period of time.

Money Kept as cash never produces you Anything.

Cash is a bad investment. Investing provides money to work.

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Shubham Pal

A student and an investor. Shubham has a passion for investing in the stock market. He loves to talk about investing, money, and the stock market. He is a follower of Warren Buffett. He loves to read personal finance and investing books.

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