“Richest Man in Babylon” by George S. Clason
144 pages long
George Clason was a businessman and bestselling author. Although his book was written almost 100 years ago, the wisdom, guidance and skills derived by this book can lead anyone of the 21st century to financial success.
It is one of the best books I’ve read on financial advice and would recommend it to anyone who wants to learn basic principles, is looking to save money, or spends more than they earn.
Like any other self-help book, it is to be read with an open and receptive mind. An African Proverb says it best: «A wise man never knows all, only fools know everything. » By creating the habit of being able to receive new information you will constantly be learning. And the more we learn, the more our ability to earn increases.
The most difficult and important part of reading a book is to apply the knowledge received. It is observed that many people complain about minor issues only a month after reading «The power of positive thinking». It is easy to get motivated when reading a book. However the hard part, and this is where one of the secrets to success lies, is to apply the knowledge and take daily action. By reading and applying principles taught in self-help books we can both help and grow ourselves.
The key principles on financial and life matters learnt from the book:
Five laws of Gold
I wish we all had somebody close to us who could show us these five laws of money before we started earning a salary or profits. In fact, I firmly believe that these principles should be taught in school. Especially if taught near the ages of 16 and older – when most teenagers have summer jobs – these principles would change the whole game. Perhaps being potentially a game changer, is the reason it is not taught in our existing educational system and schools. Perhaps somebody wants us to remain in the loop of spending whatever we are earning, which leads us needing the banks, taking out loans most people can not pay off, like every other middle class family.
Coming back to the amazing principles of these book, below are the 5 laws:
- The 10% law
Make a habit of saving 10% of whatever you earn. It doesn’t matter if it’s only a small amount. Any money saved is better than nothing. If you fall in the category of people that think they can’t cope with this, what could help is cutting unnecessary expenditure during the month. I guarantee you that if you can live on 100% of what you earn you can certainly live off 90% just as well. Earning more money tends to makes us spend more, on a better car, a better house, newest technology, nicer restaurants. It’s a strange psychological human malfunction if you ask me.
- Make it multiply
George Clason says after we’ve saved 10% and let it accumulate we should find ways to make it multiply. Invest it wisely and watch your wealth grow. Even small amounts invested are worthwhile. If you believe that investing 10% of what you earn will not change your financial position, it won’t. Most likely this phenomenon has occurred because you programmed yourself to believe so. «Where the determination is, the way can be found. » Trusts in this process, save 10%, invest it and in a few years’ time you’ll see your wealth grow.
- Seek advice from wise men
Would you ask a mechanic to give you advice on investing in securities? Or would you ask a doctor to give you advice on buying real estate? It is wise to seek advice from wise and relevant people. To open a bakery, ask a baker. To invest in stocks, ask a broker. To open an online shop, ask an online guru. You get the point. «Better a little caution than a great regret» George Clason.
- Gold slips away if you invest with little knowledge or skil
- Gold flees if you follow tricksters or invest in fast making money schemes.
Laws 4 & 5 are complementary to number 3. Invest wisely, learn new skills and seek advice from experts in the field you want to invest in. George Clason says «It costs nothing to ask wise advice from a good friend». So if we can lower our egos and be open to advise, we can ask and most possibly, we shall receive.
Lastly I want to stress out this powerful principle:
The Goddess of good luck favours men of action. Have you ever looked at successful people, driving in their new cars, living in expensive houses and tricked yourself to believe that they got lucky? Many years ago so have I. Only to be awakened by George Clason quote: «Men of action are favoured by the goddess of good luck».
Many successful people make the law of averages work in their favor. Fail 99 times but succeed massively in 1. And usually that one time is what other people consider as luck. Quitters never win and winners never quit. Patience, persistence and perspiration are required to turn luck in your favor.
To put it in ancient babylonian:
«Maketh thy own luck».