Book Notes: The Richest Man in Babylon

By George S. Clason. 125 pages.

NOTE: Whenever I read a nonfiction book, I like to summarize the ‘meat’ of it, the parts that really had value to me (I copied the idea from Derek Sivers). So, fair warning: this is less a book summary and more a ‘points I liked in a book’ summary.

I really enjoyed the writing style and approach of this well-known book. Reviews and summaries of it are ubiquitous. For me, the main nuggets of wisdom in the book are “Seven Cures For a Lean Purse” and “Five Laws of Gold”, which mostly overlap. Here they are (the ‘thys’ and ‘thous’ are how the author wrote them):

Seven Cures For a Lean Purse

  1.  Start thy purse to fattening: Pay yourself first (that phrase originates here). Save 10% of your income.
  2. Control thy expenditures: Live on 70% of your income, no more than 20% to debt.
  3. **Make thy gold multiply**: Invest wisely and make your money work for you as hard as possible.
  4. Guard thy treasure from loss: Protect your principal. Invest safely and conservatively.
  5. Make of thy dwelling a profitable investment: Own your own home.
  6. Insure a future income: Plan for retirement and providing for your family after death.
  7. Increase thy ability to earn: Work hard, always be learning, always be looking for ways to increase your income.

The Five Laws of Gold

  1. 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.
  2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
  3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
  4. 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 who are skilled in its keep.
  5. 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 price of the book is worth the last chapter alone, titled The Luckiest Man in Babylon. In it, a wealthy merchant tells his young companion, the grandson of his business partner, the story of how his grandfather became such a successful merchant. That story powerfully and clearly illustrates all of those seven cures and five laws in action.

The message repeated throughout: You have to be willing to work hard for all this, as hard as necessary. Enjoy work for it’s own sake, and work hard, and you maximize your chances of succeeding. That hard work attracts the attention and respect of others.

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