George Samuel Clason’s book, The Richest Man In Babylon is just as relevant today as it was in 1926 when it was published. It is undeniably a personal finance classic.
The book chronicles how practical money management and wealth-building lessons were used by Arkad, who had a humble background as a son of a merchant but grew to become the richest man in the ancient city of Babylon. Arkad achieved this feat by riding on the wisdom he gathered from the rich money lender called Algamish.
In this short article, we explore 7 simple steps identified in this 91-year-old book and how you can employ these steps in diligently building your wealth. These 7 financial lessons are compiled from what Arkad called “seven cures for a lean purse” which he presented to a group of 100 men over seven days in a bid to transform Babylon into the wealthiest city in the world.
Here are the nuggets:
1. Start thy purse to fattening
“For every ten coins, thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to their soul”.
Interpretation: Save 10% of your income.
Well, say no more. Cowrywise has made this super easy. We automate your savings and you can even save more than 10%.
2. Control thy expenditures
“What each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary. Confuse not the necessary expenses with thy desires”.
Interpretation: Live below your means
3. Make thy gold multiply
“The gold we may retain from our earnings is but the start. The earnings it will make shall build our fortunes. Learn to make your treasure work for you. Make it your slave. Make its children and its children’s children work for you”.
Interpretation: Make your money work for you
4. Guard thy treasures against loss
“The first sound principle of investment is security for thy principal. Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is a probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly”.
Interpretation: Protect your wealth
Security is important. Hence our proactive approach to security of savings through our Trust structure that allows all assets to be held by our trustees on behalf of savers.
5. Make of thy dwelling a profitable investment
“I recommend that every man own the roof that sheltered him and his. Nor is it beyond the ability of any well-intentioned man to own his home. To own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart and greater effort behind all his endeavours”
Interpretation: Build or rent a home you can comfortably afford.
You can easily create a house rent plan on Cowrywise and save towards that financial goal much quicker.
6. Ensure a future income
“The life of every man proceedeth from his childhood to his old age. Therefore do I say that it behoves a man to make preparations for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them.”
Interpretation: Plan for retirement
It is not early to start saving for that retirement life you dream of.
7. Increase thy ability to earn
“That man who seeks to learn more of his craft shall be richly rewarded. The more wisdom we know, the more we may earn. Cultivate thy own powers, to study and become wiser, to become more skilful, to so act as to respect thyself. Thereby shalt thou acquire confidence in thyself to achieve thy carefully considered desires”
Interpretation: Invest in yourself
We cannot overemphasize this nugget, probably the most important in the Richest Man in Babylon, as it provides the capacity for you to earn more.
Our attraction to this book is its simplicity, relevance and potency. Those nuggets work like magic every day once they are implemented. The beauty is we have made the implementation of these nuggets much easier to achieve in today’s world. We recommend to everyone in a heartbeat to read the full version of the book for your pleasure and nugget 7 above.