Book Review: The Richest Man in Babylon by George S. Clason

This time-tested classic book on investing was originally written in 1926 has sold over two-million copies and deserves your attention.  Written as a story, Clason uses the setting of Babylon, which in its time was one of the wealthiest and most prosperous areas/cities on the planet to weave in his story the principals of wealth.

In his series of stories Clason shares the woes of two artisans who are great at their crafts but struggle to make ends meet.  As they watch a parade pass by one day they notice their childhood friend sitting in the position of high acclaim within the procession.  Finding him after they dare asking him to share how he was able to be so successful.

The wealthy friend told them how he was of little difference to them, was a scribe and had the fortune of meeting a wealthy man who needed a document written quickly.  In exchange for the work he bargained that the wealthy man share his secret to wealth.  He does, but upon application has to keep returning to the wealthy man to gather more knowledge.

Here are some of the principals the wealthy man speaks of in his experiences during the first half of the book:

–        Start thy purse to fattening, in other words – save

–        Control thy expenditures – live within your means

–        Make thy gold multiply – Invest wisely

–        Guard thy treasures from loss – Insure what you have and invest in what you know

In the second half the story focuses on investment as one chapter and explains the 5 Laws of Gold.  In short,

–        Put 10% of what is earned aside for saving

–        Make your gold work for you

–        Invest under the advice of men who are wise in gold’s handling

–        Gold will be lost in investments to which a man is not familiar or approved by those skilled in its keep

–        Gold is lost to the man who forces it to impossible earnings or who follows the advice of tricksters and schemers

This book is a short read that if read carefully will provide you great insights into your everyday gain, use, and giving of money.

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