Book Summary and Review : The Richest Man in Babylon by George S. Clason

Book Summary and Review : The Richest Man in Babylon by George S. Clason
Book Summary and Review: The Richest Man in Babylon by George S. Clason

The Richest Man in Babylon is written by George S. Clason. This book is all about self-help and Wealth creation. If you do not much know about this, Then it is a must-read book if want to know about the truths of wealth creation. Even these days, The book is well known for its principles of wealth creation. This book has 144 pages so it is comfortable to read. Here I will share with you the top 7 lessons that you need to learn from the book. Here is my Book Summary and Review of this book. 

Book Summary

The book tells the story that is set in Babylon during ancient times. In this book, a young man asks a person to guide him. This rich man teaches him the rules of wealth. He also scolds the young man for making mistakes, but eventually, the boy gets rich.

Here are the top 7 lessons that I learned from this book.

1. Use Saved Money To Make More Money

This is one of the golden truth of making money, that is already mentioned in many books like Rich Dad Poor Dad By Robert Kiyosaki. Most of the people spend money on things that are going to be rust, deteriorate with a net value of zero. This includes many things like cars, watches, and unuseful things. Creating someone's wealth else yours.

Smart people always thinking of making more money by using their saved money. They invested that money in making wealth. You also know the man Warren Buffett did this since he was six years old, he purchased six-packs of coke from his grandfather's grocery for 25 cents and resold each of the bottles (for a nickel) and profiting 5 cent profit. This way Warren started making money, While other children at his age were playing and more. He slowly steps into the world of finance and became the richest man in the world.

2. Spend less than you make

Most of the People I meet they said that they spend many of portion what that they make every paycheck. I know that they are not getting rich if they make more money because they will spend more and save nothing.

You should always pay yourself first before spending or buying something. Save 10% of the money that you earn from your paycheck. And invest that saved money wisely to make more money. 

3. Only Invest your money in industries you are familiar very with

You only want to invest money only in those industries you are familiar with otherwise you will otherwise have a chance to lose money. You should not waste your money on that area you are not much familiar with.

4. Only take advice from skilled people in that field

You should only take advice from the best people in the field. Because you know that everyone loves to give advice. If you invest with people who tell that you want to hear but he knows nothing about the industries, they will lose the money. If you invest foolishly, your money is as good as gone.

This book explains this with a story of the main character investing his money with foreign jewel traders that promised to bring back rare jewels for the cheap price. He was scammed and brought back fake jewels. He also trying to investing his money in the shield business with a man who worked as a cloth maker. (and clearly, he didn’t know a little thing about the shield industry). This man didn't know anything about the business because he's a tailor, he has no idea about the business.

Find an expert in business who has made a lot of money.

5. Guard the money from loss

Here, the book encourages you the protection of principle from loss. It is easy to criticize this idea, as most of us feel that investment have the potential to lose value, such as stocks, which are the important parts of a balanced portfolio. Know your risk factors and understand the risks in your portfolio. 

You should protect your treasure against loss by investing only where your capital is insecurity, where it can be received at the desired moment, or where you will make a suitable amount of interest.

6. Invest thy ability to earn more.

Position yourself to make more money by improving your skills, knowledge, and making yourself more employable. Trained yourself, go to classes, take advice from knowledgable people take jobs on the side; whatever you chose, set particular and measurable performance goals, and start working to earn more money from now.

7. Insure a future income

You can also pay a small regular payment to an organization or invest in mutual funds, which over time and with interest will produce more beneficial results. So here is the 7th way to garnish your purse, plan to have an income later in life, and guarantee the protection of your family.

The Book Summarized in Two Sentences

Save and invest 10% of what you earn with your every paycheck with people and businesses that are skilled at their craft so you earn more money. Think of every wealth you make as a worker that works for you. Make sure it works to earn you more money, not less.

Book Review

The book was written in the style of ancient times. Therefore, some of the words and phrases used are a little bit confusing, old-sounding, and feel like they came out of the Bible. Despite the strange words, it’s pretty easy to tell what the main message is in the story and it does work together with the story to set the mood and setting. You sometimes have to read between the lines to get the lesson from the fable.

I can understand why this book as stood the test of time: because the principles are spot-on.

What I Did Not Like

I didn't agree with his advice that “real estate is the best investment of all time” because it’s not all time. There are plenty of investors and businessmen who made more dollars by simply focused on businesses other than real estate. More, it conflicts with his other point on not investing in something you don’t know. And even if you do know real estate like the back of your hand, I wouldn’t go so far as to say it’s the best investment. It really depends on if you have a talent for it, found a niche in real estate that is overlooked, or found a way to be better than everyone else at it. There are millions of different industries and skills out there to succeed on.

What I Did Like

That does not mean his principles are wrong though. It is based on what I have seen a lot of other millionaires and billionaires idea about the wealth, most of his principles are right on-point.

The only other thing that I want to say that you should probably start to increase the amount you put away and invest from the 10% the book tells you to if you can. You can get there a lot faster by saving and investing more than 10% of your earnings or savings. 10% is a good value of money to starting point though because naturally, it can be too hard to stay consistent saving more.

Many of his points about setting up systems to the ability to earn more and improving your knowledge that are endless pillars of wealth that most millionaires echo.

Hope you like it.

Post a Comment