The Richest Man In Babylon – by George S. Clason: Key Takeaways

Disclaimer: This is not a book summary, but the key takeaways. The sole intention of this article is to cultivate the reading habit and motivate the reader to buy the book.
I strongly recommend you to buy the original book (‘The Richest Man In Babylon’ – by George S. Clason) from the bookstore or online and read it! 😊

Every one of us desires to become rich and live in abundance which is obvious, but the question is; how many of us do what is right and necessary to get wealthy? This article is about the key takeaways from one of the oldest and most famous books on financial management written in 1926 by George S. Clason. The book’s name is ‘The Richest Man In Babylon’.

This book is about a very rich man who once lived in Babylon. It’s about how he acquired these financial management skills and how he helped many people in Babylon by sharing his wisdom. The 7 financial principles written in the 1920s are still valid and can be used to improve the wealth aspect of our life. ‘The Richest Man in Babylon’ is a must-read for book anyone who wants to understand how money can be earned while you enjoy life. It is recommended to read this book in your early 20’s.

The seven cures for a lean purse

1) Start thy purse to fattening.

Pay yourself first. You must have heard this saying before, ‘Money saved is money earned‘. No matter how much do you earn, you have to save at least one-tenth (10%) of your total income. It can be as much more as you can afford. The more, the better. Remember: ‘A part of all I earn is mine to keep.’ You might be having this question in your mind, what if I am not able to save one-tenth (10%) of my total income? Read the next cure.

2) Control thy expenditures for definite and gratifying purposes.

If you are not able to save at least one-tenth (10%) of your total income then, now is the time to revisit your expenses. See where you are spending more money than required. List down all your expenses and divide them into two categories. Necessary (must do) and Unnecessary (can be avoided). Cut down those unnecessary expenses and see the difference. Track your expenses. Write it in a diary or any expense manager app you have on your mobile phone. Make a note even if you spend a small amount as it will make you feel cautious while spending the money. Review it on a weekly basis and adjust your priorities accordingly.

3) Make thy gold multiply.

Earning money is not sufficient. Making profitable investments is more important and that’s what makes a huge difference. If you are not sure which investment is right for you, consult with your financial advisor as they can help you to make the right choice. Make a profitable investment and let your money work for you and give you returns on your investment.

4) Guard thy treasures from loss.

‘Advice is one thing that is freely given away. But remember, you take only what is worth having‘. Many people fall into trap of those get rich quick schemes. Along with earning and investing it is equally important to save your money from loss. Make sure that your investments are safe and secure. It’s better to consult your financial advisor who can help you to make the right decision while investing.

5) Make of thy dwelling a profitable investment.

Owning a house is everyone’s dream. If you own a property you can save the rent you pay.
You can also rent out your own property and earn a regular income. This, then, is the fifth cure for a lean purse: “Own thy own home”.

6) Insure a future income.

No one can predict the future but we can certainly secure it financially. Below are a few pointers to begin with. Check them out!

1. Divide your investments as per your goals. Short term, Medium term and, Long term. Save for your old age.
2. Medical expenses can literally empty your wallet if you don’t have a Mediclaim policy. It is extremely important to get one if you don’t have already.
3. The term plan can help you to make sure that, your family will an adequate amount of money in case of an unfortunate situation.
4. Life insurance is another must-have instrument however don’t consider it as an investment option.
5. ‘Never put all eggs in one basket’. Likewise invest your money in different instruments such as Fixed Deposits, Mutual Funds, Equity, Gold, Real Estate, etc. Some people prefer Fixed Deposits over Equity / Mutual Funds. It totally depends on two things. 1) Risk appetite 2) Your understanding and knowledge about Equity / Mutual Funds. I am not recommending anything here, however have a detailed understanding and consult with your financial advisor to understand the pros and cons before you invest your hard-earned money. Remember cure 4) Guard thy treasures from loss. 🙂

7) Increase thy ability to earn.

The seventh and last remedy for a lean purse is to cultivate thy own powers, to study and
become wiser, to become more skillful, to so act as to respect thyself.

Every one of us has 24 hours to earn. Then why do entrepreneurs earn more money than those who do regular 9 to 5 jobs? It’s because they make their money work hard for them. There are many ways to increase our ability to earn; identify the one which is suitable for you and take inspired action.

Learn new skills and monetize them.
Invest your money.
Create an additional source(s) of income.
Rent out a property.
Invest in a profitable idea.

As you have completed reading ‘the seven cures for a lean purse’, now is the time to implement these ideas in your life and make the most out of them. Remember: Ideas alone won’t bring success. Ideas have value only when you act upon them.

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