The Richest Man in Babylon by George S. Clason ranks among books such as Rich Dad, Poor Dad, and Think and Grow Rich. It is extremely simplistic in its nature, and certainly no intellectual masterpiece that introduces groundbreaking ideas, but instead focuses on the raw basics of personal finance. It might be best suited as a starting point for anyone with limited knowledge around controlling their finances.
Although many of the key concepts are repeated numerous times throughout the book, and the writing style is dated, it is important to understand the original format and context of these lessons. Clason began writing a series of informational pamphlets in 1926, using parables - not dissimilar from the layout of the bible - set 4,097 years ago in ancient Babylon, to dispense financial advice. Banks and insurance companies soon began to distribute these parables and the most famous ones were compiled into the book "The Richest Man in Babylon.”
The primary lessons which can be taken from this book are summarised below:
- Save 10% of everything you earn
- Control your expenditure
- Increase your ability to earn
- Make money work for you
- Protect your principal against loss
- Choose your mentors wisely