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The Richest Man in Babylon BOOK SUMMARY & NOTES

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Published: 1926 by Penguin Books

Wealth Management | Self-Help

Buy the Book: AbeBooks | The Book Depository


The original 1926 book is illustrated in parables told by Arkad, a poor Babylonian scribe (fictional character). He became the “richest man in Babylon”. Arkad’s theme of advice is the “Seven Cures”, this will help you how to accumulate wealth, and the “Five Laws of Gold” or how to protect and invest wealth.

About the Author

George Samuel Clason was born in Louisiana, Missouri on November 7, 1874. He attended the University of Nebraska and served in the United States Army during the Spanish-American War. Beginning a long career in publishing, he founded the Clason Map Company of Denver, Colorado, and published the first road atlas of the United States and Canada.


In 1926, he issued the first series of pamphlets on thrift and financial success, using parables set in ancient Babylon to make each of his points. These copies became famous being “The Richest Man in Babylon,” which has become a modern inspirational classic. George is credited with inventing the term ‘Pay yourself first.’

Book Summary

Seven Cures For a Lean Purse

The First Cure: Start thy purse to fattening

“For every ten coins, thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul”.

You should always save 10% of your income to start building up your purse (wealth). If you save a higher amount, then it’s great. This money might only pay your debt, but it is still growing. In fact, if you’re in debt you should use 20% of your income to repay it and live on the remaining 70%.

Pay yourself first. Meaning, don’t just work to earn food and shelter. Wealth can either give you freedom or enslavement. Don’t be a slave for someone else. Choose wisely.

The Second Cure: Control thy expenditures

“I found the road to wealth when I decided that a part of all I earned was mine to keep and so will you.” – George Clason

Know the difference between ‘necessary expenses’ with ‘thy desires.’ Don’t be confused with them. Minimize your money from going out and live below your means. If you don’t do this, you will be saving 0 % of your income.

“What each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary”, meaning, our expenses will always grow equal to our incomes if we don’t protest. 

Many people, when they get a raise, they start using their money to spend more. But for the wise, this is an opportunity to save more money.

You will never become rich without controlling your expenditures. Everybody has to live by ‘income minus expenditures equals savings.’ 

The Third Cure: Make thy gold multiply

“The earnings it will make shall build our fortunes. Learn to make your treasure work for you. Make it your slave. Make its children and its children’s children work for you.”

Saving money is not enough to become wealthy. Arkad advises to invest and to compound the investment return from your savings. If you do this, your wealth will slowly build and you are building an army of workers that are earning money for you. 

Invest your money in the stock market, bonds, and real estate. This will increase your money. If you don’t invest, opportunities will just pass you by.

But make sure that your investments are safe. (Not scam!).  Or, if there is an opportunity that you are not knowledgeable in, you need to learn more. 

The Fourth Cure: Guard thy treasures from loss

“He who takes advice about savings from one who is inexperienced in such matters shall pay with his savings for proving the falsity of their opinions.”

If you want to become wealthy, there’s always a risk of loss and get-rich-quick schemes you’ll face along the way. Therefore, you have to be wary of losing money. One way to do this is to learn from those who’ve done it, people who have successfully built wealth and kept it for long periods. . Surround yourself with wise and wealthy people.

“Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is a probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly”

Additionally, if you want to spread your wealth, you have to diversify. Diversification means putting your investments in many investment vehicles. Doing this is risky, but remember, the higher the risk, the higher the rewards.

The Fifth Cure: Make of thy dwelling a profitable investment

“I recommend that every man own the roof that sheltereth him and his”, and, “Nor is it beyond the ability of any well-intentioned man to own his home”

Arkad advises buying versus renting your property and using your residence to establish a business. Renting money is an easy way to waste money because you’re making your landlord rich.

Instead, it is better to take out a loan and buy a property. You can start building a profitable business from it by renting it out. However, the best-case scenario is buying a house without a loan.

The Sixth Cure: Insure a future income

“Therefore do I say that it behooves a man to make preparations for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them”

Arkad advises on having a pension and future retirement income. You need to think about your future. Things that could crop up in the future, such as becoming ill or even worse circumstances.

Develop a passive income stream now so that if you plan to retire, you have money.

The Seventh Cure: Increase thy ability to earn

“The more of wisdom we know, the more we may earn”, and, “That man who seeks to learn more of his craft shall be richly rewarded”.

Your most valuable asset is your mind, therefore you must develop your skills and your investing wisdom to increase your earning potential.

Aside from learning new skills, you must develop healthy habits that help you achieve your financial goals. Healthy habits would be running, reading financial books.

When people are talking about wealth, they think about luck or chance. Chance is merely a result of preparation and taking opportunities that come to us. All of us have the opportunity to change the chances of us becoming wealthy by investing in ourselves.

Opportunities will always come by and the wise grab them. It doesn’t matter if it fails. You are increasing your chances of being wealthy.

The complainers will not even try and will always be jealous of others being lucky.

The Five Laws of Gold

Arkad’s advice here is very similar to the “Seven Cures”.

The First Law of Gold

Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.

Gold comes easily to those who save at least 10% of their earnings. Saving is the start of building wealth.

The Second Law of Gold

Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.

Gold can themselves grow, labor diligently and compound your wealth.

The Third Law of Gold

Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

Gold comes to those who are being patient and have a long-term perspective.

The Fourth Law of Gold

Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.

Gold slips away from people who invest in those they don’t know about and understand.

The Fifth Law of Gold

Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.

Gold flee people who invest in get-rich-quick and aggressive wealth creation strategies.

In Conclusion

The issue is not money, but financial literacy. Even if a person acquire tens of millions of dollars but he has terrible spending habits, it won’t solve his problems.

Being wealthy starts from completely changing the mindset and attitude towards money.

The Richest Man in Babylon Review

I thought this classic book tells a story about Solomon, the wisest and richest man who lived. But I was wrong, though this book is set in ancient times, it tells a parable about how a man can accumulate abundant wealth.

I’ve read several personal finance books where I’ve taken lots of nuggets of wisdom. But this book challenged me, not just in my vocabulary (lol. You’ll know when you read it), but in my actions.

This book offers pretty simple advice: work hard, save, and invest. Many people still struggle to live from paycheck to paycheck every month, confused as to where their money went. According to Clason, you must allocate the 10% for savings to be invested later on, 20% to pay debts, live off on the remaining 70%. To become wealthy, you have to be faithful in whatever salary you are getting now. There is no shortcut.

I recommend this book to anyone who has the same dream of financial freedom and has the belief that financially independent days are well within reach.

Thanks for reading! I’d love to hear your thoughts, comment below!

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