David Sukanth - Conservative Viewpoints

The Richest Man In Babylon with Study Guide: Deluxe Special Edition

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The Richest Man in Babylon is the best book I have read on managing your finances. The book lays down the foundational principles that are fundamental to successful money management. The key to success in money management is not how much money you make but on how much you save and how soon you begin to invest.

Even on a meager income, if you start saving early in life, you will be much ahead of someone who earns a substantial income but starts saving late in life.

This book does not give you any financial advice on how to invest or where to invest. It lays down the foundational principles of saving and investing that you can follow no matter which investment avenue you choose.

George Clason wrote the original version in 1926, and yet all the principles are relevant today. This book is a timeless classic – the universal principles that stand the test of time.

Book Specifications

Book Name The Richest Man in Babylon with Study Guide
Author George Clason
Language English
Pages 242
Product Group Self Help, Personal Finance
Type Study Bible
Publication Date October 9, 2018
Publisher G&D Media; Deluxe, Special edition
ISBN10 1722500042
ISBN13 978-1722500047

George Clason starts the book with the most conservative principle – “Individual Responsibility.” He does not believe in the groupthink that liberals push because groupthink always fails. In groupthink, lazy liberals suck up whatever hard working conservatives make.

“Our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals,” states George Clason. The fundamental principles shared by George Clason are:

  1. Start saving at least 10% of your income every paycheck. The more you can keep the better. The principle of “Pay Yourself First.” The book says, “Fool! You pay to everyone but yourself.”
    • Though not suggested in this book, as a conservative person, I would start by Tithing. Give 10% of your income first to God and then use the rest of the 90% following the principles provided in this book.  
  2. Reinvest your earnings from your current investments. Make money work hard for you rather than you work hard for the money. The money you save is like a slave (employee in today’s world) who will work for you. If you keep eating away your slaves, they will not be able to work for you.
  3. Make your savings multiply by investing well. Saving and investments are like a seedling that you plant. The sooner you plant, the sooner it will grow. The more faithfully you nourish and water the investments with consistent savings, the sooner you can rest and bask in its shade.
  4. Protect your investments. Invest with those who are experts in their field. Do not give money to a bricklayer to buy precious stones. If you do not deal with experts, you will get duped.
  5. Control your expenditures. Do not spend more than you earn.
  6. Learning is a life long endeavor. Keep adapting with the changing times.

Here some other valuable nuggets of gold from the book:

  1. A man’s riches are not in the hoarding of wealth but creating a regular source of passive income.
  2. Time and study are required to acquire the superior powers of wealth.
  3. Opportunity does not wait for those who are unprepared.
  4. Complete whatever task set for the day. Do not overdo or underdo. Do as you have determined, nothing more and nothing less.
  5. Gambling is for losers. The odds are always stacked against the players. Sometimes the players may win big, but the Game Keeper always wins.
  6. Procrastination is the Opportunity killer.
  7. Good Luck favors the man of action.
  8. Wisdom is more valuable than Gold. Without wisdom, one who has Gold will quickly lose it. With wisdom, one who has Gold will secure it.
  9. Protect yourself against the uncertainties through insurance, savings, and dependable investments.
  10. Conservatives see life as a series of problems to be solved and solve them. Whereas, liberals whine about everything.

The story starts with two friends pondering why after putting such hard work and long hours for half of their lives they are living from paycheck to paycheck just meeting the necessities of food and clothing.

Finally, the light bulb glows, and they decide to seek the secret of acquiring wealth from those who know how. The friends decide to reach out to their old friend, Arkad, the richest man in Babylon. Arkad shares the secrets of his wealth that anyone can apply at all times as these are universal principles that do not change.

  1. Pay yourself first at least 10%. The more, the better without being miserly.
  2. Spend less than you earn.
  3. Invest with experts who know the stuff and let your savings work for you.

When he shared the secrets with his friends:

  1. Some were silent as they had no imagination.
  2. Liberals were sad that such a rich man is not sharing his wealth with others not so fortunate.
  3. The eyes of the Conservatives lit up as they saw this as a lesson to implement to get rich.

Another vital principle shared in the book that liberals will hate: “One may not condemn a man for succeeding because he knows how. Neither may one with justice take away from a man what he fairly earned, to give to men of less ability.”

Seven Cures to the Lean Purse

  1. Start saving from your earnings. Just spend 90% of your revenues each month.
  2. Control your expenditures.
    • Do NOT confuse needs with wants.
    • Prepare budget and include only those desires that you can accomplish through 90% of earnings. Discard or hold back the rest.
  3. Invest wisely and reinvest the earnings. Help your investments grow faster.
    • Let the magic of compounding work for you.
  4. Guard your investments against loss.
    1. Keep your capital safe
    2. Take a calculated risk even if the returns are low
    3. Analyze all the risks before you make the investments
    4. If you lend money, make sure that the other party has the ability and reputation for paying back
    5. Entrust your money to people who have expertise and experience in the field you are investing
    6. Consult with wise men
  5. Invest in a Home and make it profitable
    • Let gardening be part of your home where you can grow your food
  6. Create passive income to sustain you during senior years
    • Real Estate and rental income can be a good source of future passive income
  7. Increase the capacity and ability and earn
    1. Instead of just desiring to be wealthy, set attainable and measurable goals towards that objective
    2. Keep on setting new and higher goals as you keep attaining the previous goals

The book also shares the stories of:

  1. 5 Laws of Gold
    • The principles to accumulate wealth
  2. The Walls of Babylon
    • The ways to protect against the uncertainties of life
  3. The Camel Trader of Babylon
    • The attitudes needed to be successful in life
  4. The Clay Tablets from Babylon
    • The plan to repay and keep out of debts
  5. The Luckiest Man in Babylon
    1. The work attitude and ethic needed to succeed in life
    2. The spirit with which to run an enterprise

Study Guide

Each chapter in the book is followed by a study guide questions to engage the reader to apply the principles to their current circumstances.

Each chapter highlights a few principles in the book. The law is explained through a story or parable to make it memorable and easy to comprehend. The stories shared in the book are as pertinent today as they were in 1926 or during the times of the story set in Babylon.

The study guide has a set of questions after each chapter that help the reader to introspect and see how the principles apply to individual circumstances. It will be helpful to do the study guide with a group to make one another accountable. It is critical to do the study guide questions as soon as the chapter is competed to get the most of the teaching in the book.

If you are stuck in the rat race of paycheck to paycheck existence and want to change the situation, this book will help you get on the path to financial success. Share your comments and feedback on the summary provided. If this was helpful, share it with others who can benefit from this resource.

An Inspiring Video on the need to start with right Financial Education

Here is a link to the Book

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