Book Summary: The Richest Man in Babylon

By Amanda King & B.J. Mendelson

Apparently, we need a wealthy man from ancient Babylon to tell us how to save our money and become rich. Or at least that’s the premise (and somewhat clunky narrative device) of “The Richest Man” in Babylon by George S. Clason.

Clason was a businessman, former soldier, and Cornhusker who wrote a series of pamphlets in the late 1920s providing financial guidance in the form of lessons from Babylon. The pamphlets were popular enough to then be collected and distributed by banks and other institutions, which ultimately led to the publication of “The Richest Man in Babylon”, a collection of those pamphlets, in 1926. So just keep in mind that much of his advice comes before both the Great Depression of the late ’20s and ’30s and the Lesser Depression in the late ’00s.

With that in mind, we start off with an unhappy chariot builder wondering why he isn’t rich. (As unhappy chariot builders tend to do.)

An old friend, worse off than our chariot builder, comes by, and they have a bit of a rant-session. After complaining about the Mets, since the baseball team’s criminal ineptitude is not limited by space nor time, the two decide to speak to the richest man in Babylon — who just so happens to be their old friend, Arkad.

What we, as simple 21st-century folk, should take away from this whole introduction, is this: It never hurts to ask. If you’re stuck on something — wealth or otherwise, seek out someone through whatever channels you have (even if that channel may be LinkedIn) and ask for help. More often than not, people will help you, as offering you advice makes them feel better about themselves.

Remember: If there’s something a person loves more than anything else on this planet, it’s themselves. That’s something we’ll explore more in Dale Carnegie’s “How to Win Friends and Influence People.”

Where Did Your Money Come From?

Arkad gives us the answer nobody wants to hear — hard work. He did say, though, that his understanding of finance was unlocked when he realized he needed to pay himself first.

“But isn’t all of my paycheck my own?” you may ask.

Nope. You pay rent. That’s not your money, that’s your landlords.
You pay your dealer, because weed isn’t legal everywhere yet.
You pay groceries. That’s not your money, that’s the grocery stores.
You pay for your superheroine-in-peril porn, because you’re not a freeloading monster.
You buy clothes. That’s not your money, that’s the tailors.

And so on, and so on, until you’re left with no money of your own.

Arkard got advice from an older man when he was young: Save 10% of all you earn and pay yourself first. Live off the other 90%.

In yet another uncomfortable narrative device, this old man came back every year for three years to see how our Arkad was doing. He saved his pennies for a full year and then invested with a bricklayer to buy gems. And guess what? He lost it all.

Why? Because of concept number two: If you’re going to make your money work for you, do it with someone who knows what they’re talking about. Buy gemstones with a jeweler. Or, y’know, invest with an investor. This might sound like common sense, but remember we live in a world where people think vaccines cause Autism, that chemtrail you see in the sky is the result of the government dropping biological agents on you, and that 9/11 was an inside job.

So … Let’s just all agree there’s no such thing as common sense anymore. And if you need further proof, remember that 63 million people voted for Donald Trump to be president of the United States.

The last year, Arkad invested smartly, but then just spent it all. Again, big mistake.

The three major principles Arkad learned from this wise old man:

-Save no less than 10% of your income.
-Seek advice from experts to invest.
-Make your money work for you.
Arkard added to this: Invest cautiously and avoid “usurious rates of return” in order to safeguard for the future.

But Really, How?

We hear these principles again, in more depth, when Arkad is teaching all of the men in Babylon how to be rich; Because it apparently wasn’t clear enough the first time …
-Start thy purse to fattening: build income from the stream(s) you already have. 10% savings.
-Control expenditures: what we feel is “necessary” will always grow to match our income unless we actively work against that. Defend yourself from “casual desires.”
-Make money multiply: make it work – investments and interest, add interest to principal.
-Guard against loss: work up from small principal than larger. Make sure the principal is secure and can be withdrawn at any point.
-Own your home.
-Ensure a future income: invest in an investment property or land to build wealth for retirement. As the actor and social critic Will Rogers once said, “Buy land. They ain’t making any more of this stuff.”
-Increase the ability to earn: Continue to improve your skills. Work harder, smarter, more efficiently in order to earn more than what you currently do at your main income stream.

And You’re Really Fucking Sure It Wasn’t Just Luck?

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Nicholas Cage is a man of action!

We encounter Arkad again discussing wealth with other men-who-would-be-rich. I guess giving women this advice back then was frowned upon. Pfft. The joke’s on them. The future is female.

 

Anyway … Together they ponder luck. Arkad reminds everyone the house always wins, which is also a lesson Nicholas Cage learns in the awful 1998 film, “Snake Eyes.”

They’ve got it all figured out so the house will always win, or else it wouldn’t be a good venture for them, now would it?

What these gentlemen do come to realize though, is basically this: Don’t procrastinate or procrastibate. One of those may be fun, the other is going to come back and bite you in the ass, and not in a sexy way.

If a good opportunity is on the table (meeting all the requirements of savvy investing), make a prompt decision. Be a “man of action” rather than one who sleeps on it, and you’ll likely reap more benefit from your investment than you ever would otherwise.

Really, Investing is All About Those Things At the Beginning

Yet again, we hear about the major principles of investing. Reminding us again of the straightforward principles. In case we didn’t get it last time. This time we get it sideways: a story about Arkad’s son, Nomasir.

Rather than letting his son inherit his estate by default, Arkad gave him some gold and told him to go prove himself worthy of inheriting the estate, in 10 years time. (This sounds more and more like the Trumps than any family we know, but whatever.)

Nomasir ignored the wisdom on the tablets and spent the gold, or was connived out of it, for the first few years. He was poor and was slowly running out of hope, until — ta-da! — he remembered his father’s tablets.
The tablet contained the five laws of gold:
-Put aside 10% of all earnings.
-Put the earnings to work.
-Be cautious with investments.
-If the investment is unfamiliar and not approved by those who are familiar with it, you’ll lose.
-Investments are lost by hopes of “impossible earnings” and schemers.

So, be a good little boy or girl and invest smartly, or else you’ll get conned out of your money by people telling you to bet on a fast horse that’s just an ass painted white.

Neither a Borrower Nor a Lender Be … Or Not?

You’ve come into a massive wealth. Now what do you do with it? Rodan (No. Not that one) just got a king’s ransom and heads off to the gold lender to ask if he should lend the money to his brother-in-law, who has aspirations of being an amazing camel-trader and Godzilla fighter. (Only one of those things might be true.)

Mathon, the lender, keeps tokens from each lender, and for those who did not repay; they are a reminder of both his folly and theirs. He finds the most reliable loans are from those who have collateral (e.g. property, side-hustles, cows) to pay the loan back if need be.

Next are those who have the capacity to earn. Then there are those who have neither. He distills his learnings into a few parables with the end knowledge of:
-Those in the “throes of great emotion” are not safe risks to lend to. (But they might be great to fuck!)
-Those who see themselves as all-knowing are a risk to lend to. (Because anyone who thinks they know everything is an asshole.)
-Those who are too ambitious and inexperienced are a risk to lend to. (Because they have no idea what they’re doing.)

This all boiled down to considering one question: Does the person you’re potentially investing with know their shit? Nope? Then don’t invest with them. If they know the industry, know the risks, and have safeguarded against them, go right ahead and invest with them. If they’re just putting their hands out, then nope. Just say no.

Dolla dolla bill y’all.

The Touchy-Feely Part

The conclusion of Richest Man wraps up in a way which ties money to well-being, mentally. If this sounds familiar, that’s because of Jen Sincero’s book, “You Are A Bad Ass” which does the same thing at the end of it.

Money is a weird thing for everyone. We need it to live, and yet for most of us, it causes a lot of unnecessary stress and heartache. So much so that many are in pits of debt they may never escape from. B.J.’s grandfather, as just one example, only got out of his debt to Sears after dying on Christmas Eve. And even then, the good people at the Sears, Roebuck & Company continued to call for six months after looking for their money.

The message here is that if there’s a will, there’s a way. Cliche included. If you find yourself in debt, or not where you want to be money-wise, the first thing you need to do is realign your mindset and build yourself up to be a person who can confidently tackle the debt, or the new savings goals.

Own up to your errors and appeal to the higher principles of man, their greater goodness (hello again, Dale Carnegie) — and be absolutely transparent with people you owe money to. Give them a schedule to repay your debt, and stick to it like your life depends on it; Because if you owe money to the wrong people, it fucking will.

(Note: Video is NSFW)

Work hard (and learn to enjoy the work), enjoy your life and always, always pay yourself first, and you’ll find yourself in a better position than most in life.

Photo Credit: MinionNoMore on YouTube