Book review: The Richest Man In Babylon
Author: George S. Clason
Cost: About $7 U.S on Amazon for Paperback
Time to read: About 3-4 hours
What has ancient Babylon got to do with investing?
A lot. Simple messages placed throughout are so clear, clever and meaningful and are as relevant now as they were in the distant past. Have a read over the following which I have tried to summarize.
How does it read?
The writing style perhaps may turn people off at times as it ventures into a semi Shakespearean form of dialogue. Don't let this turn you off - push on. I think if people can push through parts where it feels put off, they will be well rewarded. They are short, generally conversational and you won’t feel like you are reading Othello. I can’t even understand what my two year old son is saying, so you should have more luck than me with that.
The key concepts presented are a very useful guide as to how we should think about our finances and it is a very motivational read. I think most people would finish the book feeling empowered and have a renewed sense of confidence and determination. Whether our goals are to earn more or work less in the future, this will give our motivation a little kick along.
When should I read it?
If you are feeling down about the stock market or your investments, buy yourself a copy to avoid being disappointed. If you have already read it, pull it out again. It will get your mind right, put things into perspective and remind yourself how simple creating a little extra wealth can be. I read this in a good market and it created the same effect.
10 important lessons to be learned
From the book, I’ve pulled out ten useful measures in the list below in its rawest form. I think these on their own are a great set of checkpoints to see how we are going:
- Have the desire to acquire wealth
- Pay yourself first and save a minimum of 10% of your income
- Increase your ability to earn - Read, educate yourself, increase and strengthen your skills
- Control your spending of the other 90%
- Invest your money using the 10%
- Focus on creating a passive income for you and your family
- Invest cautiously, don't invest in something you don't understand
- Don't invest in others who are not capable and experienced
- Insure your money/income against loss
- Own your own house
This may seem simple, but how many of us can honestly say we have applied principles like this at all times? Never thrown good money after bad? Made an investing mistake from not doing enough research or being over confident? Saved 10% of our income since we started working? Stopped reading and educating ourselves after finishing school?
This book serves us a good reminder of what we have to and the short stories told that link these concepts create a stronger memory than any list will ever do. We wish we started doing these things since day one but now is a good as time as any to start socking away some more cash or pick up a book that might help us earn and learn some more.
Do yourself a favor to your future self, pick up a copy and have a read.
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