Reading The Richest Man in Babylon by George Clason has had a great impact on how I conduct my life financially. George Clason wrote the book in 1926 from Babylonian parables which he collected from clay tablets. The book gives the insights of financial management, wealth maximization, and securing one’s financial future. The book offers a step by step guide into finding the cure to a lean purse and the five laws of gold.
The Richest Main in Babylon begins with the story of Bansir, who is a chariot maker in Babylon. Bansir laments about the fact that he never seems to make enough money to cater for his family’s needs and luxuries. As such, he seeks out the wise advice of his friend Arkad together with other young men. Arkad started out as a scribe who worked hard on clay tablets until he met Algamish, who was a client for a clay tablet. Upon finding his tablet unfinished, Arkad promised to finish Alagamish’s tablet that night if Algamish promised to tell him the secret to becoming wealthy. They fulfilled each other’s end of the bargain and in this setting, Arkad is passing his lessons to the group of Babylonians.
1. Pay yourself first
This involves saving a certain part of your earnings. The book recommends that you save at least 10% of your earnings before spending in order to start accumulating wealth.
2. Control expenditures
We should live within our means by paying for necessities such as rent and food, paying for entertainment such as holidays, and satisfying our desires. All this should be done without spending more than the remaining 90% of our earnings after savings.
3. Make your money work for you
Investment is a key feature in accumulating wealth.
Ensure that you gain the necessary knowledge about each investment feature before settling on the most appropriate one for you in order to avoid making losses. This aspect also touches on the insurance of our assets to avoid financial losses in case of unplanned events.
5. Make your home profitable
This aspect deals with owning a home instead of paying rent all our lives for a home that we do not own. It champions mortgages, buying and constructing homes for added financial value due to ownership.
6. Insure a future income
Ensure you put up an appropriate retirement plan in place in order to provide for your needs in your old age.
7. Increase your ability to earn
This aspect advises us to continue learning and gaining new skills. Having knowledge and a variety of skills enhances our chances of earning in several platforms.
The simplicity of the book made it easy to understand the steps leading to ultimate financial transformation. The book remains a timeless classic whose steps are still very useful in this modern day world. For most people, including myself, saving is one of the hardest things to do. I often thought that I would only be able to save money when I earn a lot of money. The book discredits this misconception and goes further to teach us how to make the little money that we have work for us.
The book has helped me further my skill set such as writing to earn extra money and investing in worthwhile ventures such as land. One of the best pieces of advice to follow is that of seeking advice from credible sources. The book is definitely my all time favorite.
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