The Richest Man in Babylon

"Beloved by millions, this timeless classic holds the key to all you desire and everything you wish to accomplish. This is the book that reveals the secret to personal wealth."

The Richest Man in Babylon by George S. Clason is one of my favorite books. I bought it late one night at the book store a little over 2 years ago and began applying it's philosophies the very next day. Since then, I have developed savings, a positive and growing net worth, and better spending habits with the money I spend so much of my life working to earn!

The book's central theme revolves around the idea of saving at least 10 percent of everything you earn. It begins to extend this idea with Clason's Seven Cures for a Lean Purse, a guide for people in any stage of their financial life to begin accumulating wealth through a model of saving, spending, and growing assets. Below I have listed the seven cures and will give a general explanation of what they each mean.

Seven Cures for a Lean Purse

1. Start thy purse to fattening


2. Control thy expenditures


3. Make thy gold multiply


4. Guard thy treasure from loss


5. Make of they dwelling a profitable investment


6. Insure a future income


7. Increase thy ability to earn

Start thy purse to fattening
For every 10 dollars you make, save a dollar of it for yourself. At the time, the small percentage probably won't be felt much, but over time you will earn much money and that small percentage will become a considerable sum of money. Look back at how much money you've made over the years and calculate 10% of it. Imagine if you had that much in the bank right now (perhaps you do) and it may persuade you to instate this first rule.

Control thy expenditures
Don't spend more than you earn. While many people feel they are just making enough money to survive, the fact is everyone referred to by "many people" do not make the same amount of money and everyone is living and surviving on their respective income amount. Human desire tends to lead many of us to want more than we can have and it is possible to live by spending less than we do. This will allow you to free up a small amount of money to save and apply the first rule.

Make thy gold multiply
After you're increasing what you save and decreasing what you spend you're on the road to building wealth. The next step is to let your riches work to create more riches through wise investment choices. This way, even while you perhaps keep the same salary or hourly rate at your job, your rate of earning is increased by the amount of money working for you at the same time.

Guard thy treasure from loss
It is important to invest your hard-earned money wisely and with a proper amount of risk. Be careful not to unwisely wager your money in the hopes of getting rich quick at the hands and mouths of those who may be called "experts" or those who are eager to tell you what to do with your money instead of their own. Find good people to advise you, people who have proven their wisdom through the practice of their ideas with their own money.

Make of they dwelling a profitable investment
By using the other 90 percent of your income to live it's possible to make that money grow through it's use as well. Clason recommends owning your own home. I must admit, this is the one rule I have not applied myself and cannot recommend from personal experience. Perhaps there are those of you who can as I can accept this may be wise when the circumstances are right in your personal situation.

Insure a future income
There may come a day when you are unable to earn the same wage as you are now be it from old age, poor health, or death. Securing the well-being of yourself and family through investment, insurance, or other means is important to mitigate the effects of surprises in life to your wealth.

Increase thy ability to earn
Study, become wiser, and gain experience to help earn a higher wage and increase your income.

By applying the above ideas, it will be difficult not to do well!

While some have said the basic ideas of The Richest Man in Babylon are simple and obvious, I would respond that in many cases the simplest solutions are the best and sometimes the easiest to overlook or dismiss. There are even more ideas throughout the book like The Five Laws of Gold and examples of characters using the advice in the book. I have changed my financial life by applying many of the ideas within The Richest Man in Babylon and would recommend it to anyone looking to further their own financial security.

Please note: Any sales of this book via the link above ensure the growth of my personal income by a very small percentage. I only recommend those books I personally like and they are usually pretty inexpensive anyway!