George S. Clason’s ‘The Richest Man In Babylon’ is a fictional tale depicting the life of the richest person in ancient Babylon. It is a wise book that teaches a lot about financial literacy and is still applicable in modern life. Furthermore, the book is celebrated as one of the best literary pieces of the last century. It has a lot of significance in shaping the genre of self-help literature in behavioural economics and strategies. So, let’s see what this book is about and what lessons we can learn from it.
The Richest Man In Babylon Emphasises Paying Yourself First
Arkad is the richest person in Babylon, and everyone adores his life journey. He went from rags to riches. But how does he do that? The answer lies in the fact that he paid himself first from whatever he earned. The primary message in the book is to save at least 10 per cent of your earnings.
“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.”
Moreover, it is one of the first steps that you can take towards building personal wealth. And it is only possible when you prioritise your future over current nonsensical expenses.
- Save 10 per cent of earnings.
- Build long-term wealth.
- Secure your future.
Control Thy Expenditures
We all have needs or necessities. But there is a fine line between needs and wants. The first one is necessary for your survival. However, your wants are not a priority in terms of survival. It’s not that you should never desire anything in life, but you should give priority to saving and investing.
- Budgeting systems.
- Wealth creation.
- Saving money.
“Guard thy treasures from loss by investing only where thy principle is safe.”
Moreover, spending money on items that do not benefit your wealth is a dangerous lifestyle. The book’s clear emphasis on living within your means conveys the message in a single line.
Make Thy Gold Multiply
Once you’ve saved enough, you move on to the next lesson of the book. You need to invest your money so that it works for you. It is a way to increase your wealth using wealth. At the same time, the method is prone to risk. So be careful not to put all your eggs in the same basket.
- Real estate.
- Stocks.
- Gold/Silver.
- Building a business.
Today, there are countless methods of investing your money. Therefore, find the ones that suit you and make sure to learn more about wealth creation. When you have sufficient money, you’ll eventually grow your money with the power of compounding.
Guard Thy Treasures from Loss
Losses are part of your lives, whether it’s human or material loss. However, the Richest Man In Babylon emphasises the importance of smart investments. The protagonist of the book wants you to take only informed risks and never invest in what you don’t understand. Thus, it is a way to avoid scams and traps that are destroying the modern world.
“Ensure a future income. Increase thy ability to earn.”
- Due diligence.
- Informed risks.
- Crypto traps and more.
Own Thy Home
Buying a home in the 21st century is one of the most controversial decisions in the economic landscape. However, Arkad from the book promotes home ownership. And the reason for this is that it provides a form of security to the personnel. But in this day and age, it’s very subjective, which should only be taken if you’re comfortable dealing with real estate. Lastly, home equity has proven to be a long-term financial asset if investment is made at the right place and time.
“To attract good luck to oneself, it is necessary to take advantage of opportunities.”
Ensure a Future Income
Human life is full of canonical events, and that’s why ensuring a safety net is a must. But how can you do that? The easy answer is to have multiple income streams. However, it’s not easy to generate revenue from various sources when you’re struggling to find a job. This is where skill-building and honing yourself as a person play a crucial role. Once you set foot in one niche, you can further create other sources of income.
“In the affairs of man, there is a force called ambition.”
- Insurance.
- Pensions.
- Passive income.
- Emergency funds
The Richest Man In Babylon Teaches Us To Improve
Arkad emphasised continuous learning and improvement for a better life. This has nothing to do with wealth acquisition or greed, but a way to look at yourself in the mirror positively. Today, building yourself is as important as investing in other capital. It’s due to the fact that learning has a compounding effect over time.
“Gold in a purse is gratifying to own and satisfy a miser.”
- Skill-Building.
- Education.
- Certifications.
- Networking.
The Role of Discipline, Patience and Persistent Efforts
Every good thing in life takes time, as there are no shortcuts to success. With consistent efforts and discipline, you can sustain your lives with ease. However, you need to be patient with everything, and this involves replacing instant gratification with long-term success.
“Opportunity is a haughty goddess who wastes no time with those who are unprepared.”
Today’s consumer culture is quite the opposite of the Arkad of Babylon. People are always looking for products and spending without a second thought. And this way, they cannot thrive when things go bad or go downhill in their lives.
Wisdom in Seeking Counsel
There are always people better than you, regardless of field or interests. That’s why you should make sure to counsel wise people for your life decisions. The Richest Man In Babylon warns against bad advice and how it can destroy lives. Therefore, learn to distinguish between credible and emotional opinions.
- Mentorship.
- Financial advisors.
- Experienced peers.
Final Thoughts On The Richest Man In Babylon
This book is very straightforward with great wisdom and advice for younger generations. Even though some of the facts about Arkad seem outdated, this doesn’t mean that it’s not worth your time. Furthermore, the ancient parables serve as modern wealth blueprints and encourage readers to reflect and build their financial freedom.
A part of all you earn is yours to keep.