The Richest Man in Babylon: George S. Clason’s Parables on Saving, Investing and the Five Laws of Gold
We cannot afford to live without proper protection; prevention is better than cure. And before investing your savings, you need to know how the market works. The Richest Man in Babylon sets out, through simple parables set in the ancient city, the five laws of gold that show how money can grow.
Author: George S. Clason (1874–1957)
Title: The Richest Man in Babylon (1926)
Format: English paperback (Berkley), 224 pages, with an introduction by Suze Orman
Scope: Personal finance told as parables
Amazon: www.amazon.es/dp/0451205367 (ASIN 0451205367)
Knowledge Before Advice
Experience leads to good decisions; wisdom and new knowledge are what, in the long run, tell you whether an investment is good. If you ask the right people, the experts, you can apply their advice; but a newcomer to investing, full of high hopes, can fall for the most absurd scams. That is why it is better to gain knowledge before taking any advice lightly. Luck happens when steady effort over time meets knowledge acquired in advance.
Arkad’s Lessons
Some of the advice in the book comes from Arkad, a man who rose from humble beginnings to become the richest man in Babylon and a lender of money:
Save a tenth. Keep at least 10 per cent of what you earn and put it to work in a profitable venture that generates new income.
Help wisely. If you want to help a friend, do it in a way that does not leave his burdens falling on you.
Spread your money. If you have money to invest, invest it in different places, reducing risk and making your money work for you.
From Bank Pamphlets to Bestseller
George S. Clason was an American businessman who founded a map-publishing company in Denver. In 1926 he began writing short parables about thrift and wealth set in ancient Babylon, and these were distributed as pamphlets by banks and insurance companies to their customers. Collected into a book, they found a far wider audience, and the book has never gone out of print. Its staying power owes much to the format: each lesson is wrapped in a simple story that is easy to remember.
The Seven Cures and the Five Laws
Beyond Arkad’s advice, the book is organised around two memorable lists: the "seven cures for a lean purse", which cover saving, budgeting, investing safely, owning your home and providing for the future, and the "five laws of gold", which explain how money grows for those who treat it carefully and slips away from those who chase quick riches. Other chapters tell the stories of a camel trader burdened by debt and a slave who works his way to freedom, each illustrating the same principles from a different angle.
A Babylon of the Imagination
Readers should not expect history. Clason’s Babylon is a stage set, a prosperous, orderly city where wise merchants teach eager young men, and it bears only a loose resemblance to the real Mesopotamian city. Still, the choice is clever: ancient Babylon did leave thousands of clay tablets recording loans, contracts and interest, so the idea of drawing financial wisdom from it is not entirely fanciful. The book even ends with a chapter about translated tablets.
A Caution
Some details have aged: the advice on lending money to individuals, for example, sits oddly with modern investing, and the world of the parables is almost entirely male. Read it for its principles, not its specifics, and pair it with a more up-to-date guide when you are ready to invest.
Why Read It
Nearly a century after it was written, its advice is still simple and sound: pay yourself first, live below your means, learn before you invest and be wary of promises of easy money. It is short, easy to read and a classic first book on personal finance.
As an Amazon Associate, this site earns from qualifying purchases.
Part of the reading recommendations featured on books.sapiensverbum.com.
