Zita Offor
“The Richest Man In Babylon” is a timeless piece. Authored by George Clason and published in 1926 in an easy-to-understand format. The book explains the basic rules and principles of how to plan, manage and grow your finances.
Written in a story-like format, it tells the story of Arkad, the richest man in the city of Babylon; the story of his financial journey and the various challenges he faced. In the whole of Babylon, Arkad was described as a very rich man; known for being generous with his family, liberal in his expenses, and still have increased wealth.
Join our WhatsApp ChannelAlso, it covers a series of classes he had with his students where he taught them principles and practices that they need to adhere to in other to amass tremendous wealth. It also covers many valuable lessons on savings, expenditure and investments using Babylon as the setting.
Babylon is a city reputable for its wealth. Sadly, this wealth is not evenly distributed but rested in the hands of a few individuals. After King sargon returned from the war, he was disturbed by this reality and looked for a way to remedy the situation. He invited Arkad, the richest man in Babylon to share his knowledge about how he got so wealthy and to teach some men how to become wealthy too.
Given seven days by the King to complete this task, each day for seven days, Arkad explained to his students seven antidotes to grow a lean purse. He began by informing his students that to amass great wealth they must start “by taking advantage of the opportunities available”; have the desire for wealth and continuous quest for knowledge.
From Arkad’s cures for a lean purse, the following lessons can be learnt.
Lesson one: Save one-tenth of your income
This is the first step to financial freedom. Before you make any expenses, quickly set aside a portion of your income; not less than one-tenth. This should be done consistently and diligently.
The Richest Man in Babylon advised his students, “for every ten coins thou placest within thy lure, take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul.”
Lesson two: Never spend above your means
In other words, control your expenses. Never spend more than you earn. By nature, human wants are numerous and insatiable. The implication is that the more you earn the more desire you would want to gratify. The Richest Man in Babylon pointed out that all men are burdened with more desire than they can gratify and that you are rich shouldn’t make you think you can gratify all of your desires. He further stated that there should be a limit to your desires: what you wear, eat, drink and do.
Lesson: Three Only spend on what is necessary
This you can achieve by first studying thoughtfully the manner you spend. List out your needs and wants, and then, select those that are necessary and others that are possible with the remaining nine-tenths of your income. Cross out the rest and see them as those desires that must not be satisfied.
The Richest Man said, “budget thy expenses that thou mayest have coins to pay for thy necessities, to pay for thy enjoyment and to gratify thy worthwhile desires without spending more than nineteenth of thy earning.”
Lesson Four: Invest in a profitable venture
You don’t just save; you save to invest. When after you have accumulated much from your savings, you need to put it into a profitable and safe venture. According to the Richest Man in Babylon, “Make thy gold multiply.” In essence, invest the one-tenth of the income that you have realized from your savings over time. But be sure to invest in a profitable venture and guard yourself against get-rich-quick investments. Let your money earn for you.
The Richest Man in Babylon advised students saying, “put each coin to labouring that it may reproduce its kind even as the flocks of field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse.”
Lesson Five: Guard your investments
Steer away from making rash investment decisions and deals hoping for large returns. He advised his students not to ever take investment advice from an inexperienced person. Taking advice from an inexperienced or unprofessional person will lead to the loss of your investment.
The Richest Man in Babylon warned, “Guard thy treasure from loss by investing only where thy 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 investment
Lesson Six: Own your own home
This will help you save rent and increase your saving. This can be done by making provisions from the nine-tenth of your income or by taking a loan to pay back bit by bit, just as you would pay your landlord if you were to rent a house.
The Richest Man in Babylon puts it this way, “thus comes many blessings to the man who owneth his own house. And greatly will it reduce his cost of living, making available more of his earning for pleasure and gratification of his desires.”
Lesson Seven: Secure your future Income
Remember that a day will come when you are no longer young and cannot work. And so, you cannot afford not to secure your future income.
The richest man explained, “the man who, because of his understanding of the law of wealth acquireth a growing surplus, should give thought to these future days.” Ways in which you can secure your income are; buying a property that can appreciate, engaging in long time investments and so forth.
Lesson Eight: Invest in yourself
Put more energy into becoming better, wiser, and more improved in character and skill. This gives room to your chances of getting more opportunities and earning a higher income.
The Richest Man in Babylon explained the seventh cure for a lean pure as, “to cultivate thy own power, to study and become wiser, to become more skilful, to so act as to respect thyself.
