“The Richest Man in Babylon”

For Christmas, my son, Darrin, gave me the book “The Richest Man in Babylon” by George S. Clason, because he didn't see it in my list of resources on the www.wherediditgo.net website. That was an oversight on my part, as I had read the book but did not have a copy in my library and thus failed to list it. Admittedly it had been a long time since I did read it, so I read it again on Christmas Day. It's only 144 pages but contains a wealth of information, literally and figuratively. It is, in fact, a book about wealth: acquiring it, increasing it and protecting it. It was written in 1926 and has sold millions of copies through the years. It is written in an almost biblical style, using parables to educate the reader, making it more interesting to read than just a checklist of principles.

As we approach another new year and a continuing bad economy, it might be a good idea to read this little tome yourself and apply the principles to your own financial endeavors. I found it well worth re-reading.

The book is divided into several stories, the first being “Seven Cures for a Lean Purse” which relates a story about Arkad, the titular richest man in Babylon. He is requested by the king to teach a class to anyone who wishes to attend on the methods he used to build his wealth. He divides this class across seven days, with each day focusing on a particular method for saving money. Here are the seven methods:

Start thy purse to fattening Take one-tenth of what you bring in and save it for the future. The book uses a coin analogy: for every nine coins you spend, take one and put it away for yourself. Many people have eventually become millionaires using only this basic principle.

Control thy expenditures Don’t buy frivolous things even if you have enough money to pay for them. Instead, make sure that you can continue to save one-tenth of what you bring in and try to ignore the temptations of the consumer market.

Make thy gold multiply Once you start to build up some savings, wisely invest that money so that it will make more money for you.

Guard thy treasure from loss You should only invest in things where the principal is safe. In other words, the book seems to discourage stock investing or at least speculating.

Make of thy dwelling a profitable investment One should own their own home rather than renting because then money can be invested in the home or invested in other things rather than handed over to the landlord. However, make sure of the value of that home and that it is not overpriced and do not buy a house you cannot afford.

Insure a future income In other words, invest for retirement and your family’s well being after your passing. Term life insurance is an economical way to supplement this as well.

Increase thy ability to earn Work hard, look for opportunities, and educate yourself. Today, a college education is one of the best investments you can make but try to pay as you go rather than the student loan route. It’s not a requirement to be successful, but it opens the door to greater possibilities.

I recommend reading the book and trying to apply the principles suggested. It just might eliminate that future question of "Where did it go?" in regard to your money.

Good reading,

Gene Rutt