Book Summary – The Richest Man in Babylon – The Success Secrets of the Ancients – By George Clason

Strategies come and go but principles are timeless. You do not create new principles. You either follow them or you don’t. This time tested wealth principles are over 6,000 years old. I enjoy reading financial and business books but I understand that most of you would rather go to the dentist and get your molars pulled. If you fit that bill then do me a favor and read just one financial book – The Richest Man in Babylon. Dave Ramsey the financial personality you may have seen on TV makes his living by preaching the principles outlined in this little book. Again, do yourself a favor and read it. You won’t be sorry you did.

Why is this important to me? Let’s answer this with a few more questions. Are you financially secure today? Do you stress about money and the future? Do you run out of money before running out of month? If any of these questions ring true for you or better yet you are on the road to financial security and want to reinforce what you’re doing, then this book is a must read and will help you. Why money? The love of money is a bad thing and I am not preaching that here. Money is a tool to help acquire things that can aid in security, happiness and fun as well as help you build and tithe. Money is the medium by which early success is measured. Money makes possible the enjoyment of the best the earth affords. Money is plentiful for those who understand the simple laws which govern its acquisition. (Note: SIMPLE – that is true!!!!!) Money is governed today by the same laws which controlled it when prosperous men thronged the streets of Babylon, six thousand years ago.

Here are the simple rules to acquire money:

1. Start the purse to fattening

2. Control thy expenditures

3. Make thy gold multiply

4. Guard thy treasures from loss

5. Make of thy dwelling a profitable investment

6. Insure a future income

7. Increase thy ability to earn

-The Richest Man in Babylon

What is interesting about these 7 laws is that you can use them for more than money. That is another topic for another review……….. Let’s dive into more detail and bring the old English to present day meaning.

This book is a short book that is packed with powerful principles. This summary may be a bit longer than others just because these principles need to be shared ASAP. If you look around the world at the financial meltdown, you need to be educated and protect your future with sound principles.

1. A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. In a nutshell, pay yourself first. This LAW creates great habits. If your bills outlast your money after you pay yourself then that leads to the second core principle.

2. for each ten coins I put in, to spend but nine. This is such an easy principle but for some reason 90% of the population cannot follow it. You need to only spend what you have after you pay yourself first. You pay yourself first so the LAW of compounding can work for you and you only spend the other 9/10th. This does not mean load up the credit card and buy crap because you HAVE TO HAVE IT NOW. We are not 2 year olds and need to stop acting like it. (I have been guilty of this and I understand it takes discipline but your significant others deserves no less……….)

3. Put each coin to laboring that it may reproduce its kind even as the flocks of the field and help bring to thee income, a stream of wealth that shall flow constantly into thy purse. OK – enough with encrypted talk. Basically what this means is that your money should work HARDER than you do. This principle eludes many people and you need to give it some real thought. People thought they were rich before the housing meltdown in 2008. This is not uncommon because their “NET WORTH” was high. NET WORTH means nothing without monthly money flowing into your pocket. Understand Cash flow and make it a core goal to have your money work harder than you.

4. Guard thy treasures by investing only where thy principal is safe, where it may be reclaimed if desirable, and where thou will not fail to collect a fair rental. Unfortunately, I can write an encyclopedia’s worth of material with my screw ups in this area. This LAW is simply Warren Buffett’s RULE #1 and that is – don’t lose money. You need to protect your principal amount of money from bad deals, shady people and swimming with the sharks. If you are intrigued by the next great investment then do me a favor and go golfing and forget it. I have taken enough butt chaffing and want to protect you from having to go through the pain. This is where financial education comes into play. The one safe investment for true growth is in yourself and things you understand.

5. Own thy home – This one is self explanatory and comes with some controversy. I believe that your home is a liability because it does not spit off cash flow. This does not mean you shouldn’t own it. Right now is the best time to buy homes because the real-estate bubble is over and pricing is very depressed. Home ownership has some rewards and provides security.

6. Provide in advance for the needs of thy growing age and the protection of thy family. This is basically savings on steroids. Now that you have some savings and you know that your money should work harder than you do then you can use this principle to solidify it and be DISCIPLINED in its execution. Keep saving for cash flow investment opportunities.

7. Increase thy ability to earn – Cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself. In my humble opinion, this one needs to be number 1. The best investment you can ever make is in your own grey matter. You need to keep learning and get educated. A self taught financial education will teach you the power of saving for cash flow investments, protecting yourself from shady deals, people and circumstances and harness the power of compounding.

The Richest Man in Babylon needs to be required reading and study for everybody. This book lays out all you need to be successful when it comes to money. Buy this book and share it with the people closest to you.

I must admit that I am lucky because I grew up with these principles drilled into my HARD HEAD. Unfortunately most people are not that lucky. This book will help.

I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days.

One thing you can take away from this book today is to schedule yourself 15 minutes every day and study something of financial value. This can be a video, blog, article or book but use the time wisely. Your loved ones deserve no less.

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