Book Notes, Featured, Personal

9 Lessons from The Richest Man in Babylon

In The Richest Man in Babylon, George Clason imparts rather simple but sound advice woven into an elaborate Babylonian tale. The book is actually a compilation of several of Clason’s parables, and thus reads more like a novel than a financial education manual.

Perhaps because The Richest Man in Babylon is such a revered and classic personal finance book, my first impression of Clason’s advice was that it was more of the same old stuff I’ve always heard. However, this is likely a testament to the steadfastness of Clason’s advice. His words have been passed down and become practically standard, remaining as timeless and true as ever.

The book is a bit repetitive in its advice, often presenting the same general concepts in different forms at different intervals. However, it is perhaps difficult to avoid this minor critique without sacrificing a bit of the story’s richness. Clason’s imaginative narrative is worth the extra pages and makes for quite enjoyable reading.

Clason’s advice can be boiled down to a few simple lessons, summarized below.


1. “A part of all you earn is yours to keep”pexels-photo-164474

Advice echoed by Robert Kiyosaki in his book “Rich Dad Poor Dad” when he said pay yourself first, the idea is to save a portion of your income before paying expenses and making other purchases. The book advises designating at least 10% of your income to savings.

Clason stresses the importance of living within your means, giving yourself the opportunity to build up savings, create investments and avoid being ensnared by debt.

“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant the seed the sooner shall the tree grow.”

2. Put your money to work

Investment is really the fun part of personal finance. This is where you get to put your hard earned money to work. However, first things first.

Clason doesn’t mention this specific piece of advice, but everyone should have a six to eight month emergency fund tucked away; money that is liquid and easily accessible in case of an emergency. This fund should be about six to eight months worth of your expenses. Then and only then should you consider investment.

3. Be careful with your assets

Invest wisely, do not entrust just anyone with management of your assets. Exercise moderation and do not be so greedy as to be easily fooled. Some things really are too good to be true. This can apply to many things, including investments, bargains, and loans.

“Advice is one thing that is freely given away, but watch that you take only what is worth having.”

4. Make your own luck by taking advantage of opportunity


Lucky men and women are really just those who seize opportunity when it knocks, as it
often comes when you least expect it. Do not let procrastination and indecisiveness rule your life and hinder your success.

“Men of action are favored by the goddess of good luck”

5. Be careful in lending if repayment is uncertain

It’s difficult to turn down a family member or friend in financial need, but you should proceed with the utmost caution in such cases as these relationships could be forever irreparably damaged under the weight of debts, resentment and shame.

“If thou desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself”

6. Get insurance

We need insurance to help protect us in case of the unexpected, and life is full of the unexpected.

“We cannot afford to be without adequate protection”

7. Where there is a will, there is a way

I have found this to be very true. If you truly want something, you will find a way, even if the easiest or most obvious path is not always available to you. Work hard and persevere in pursuit of your goals.

8. Pay down debt

Paying down debts should ALWAYS be a priority, no matter how challenging it may be. (Better yet, heed lesson #1 and never get into debt in the first place!)

It should be noted that Clason advocates saving even while in debt. In most instances I would actually advise against that. You’d be best served doing the math yourself to see where your investment will reap a higher return. Often debt will cost more than your savings will earn.

9. Learn to enjoy work

Nothing worth having comes easy as the saying goes, however cliched it may be. There may be many routes to achieving your goals, but they will all require hard work and dedication in some form or another. I find useful to remember that the process of working towards your goals is half the fun. At the very least, it is an experience from which you will learn and grow in ways you can’t even know right now.



Clason also includes two different lists which summarize his main points, though they both echo lessons that are already scattered throughout the book.

 Seven Cures for a Lean Purse

  1. Start thy purse to fatteningSpend less than you earn and save the rest
  2. Control thy expenditures: Live within your means, budget for what you can actually afford
  3. Make thy gold multiply: Use your savings to invest in in creating income streams
    • “Put each coin to laboring that may reproduce its kind”
  4. Guard thy treasures from loss: protect your money from unwise investments
  5. Make of thy dwelling a profitable investment: Though not always applicable, the argument here is that in owning property you can avoid paying rent, which is an expense and not an investment
    • “Own thy own home”
  6. Insure a future income: Plan and prepare in advance for old age and your family through retirement plans and insurance
  7. Increase thy ability to earn: Set specific and attainable goals, and study and learn how you may achieve those goals. Gain skills and confidence and act with integrity.

“The Five Laws of Gold

  1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.
  2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
  3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
  4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
  5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.”


You can find The Richest Man in Babylon here.

Is there any fundamental personal finance advice that you feel I’ve left out here? Please let me know!


Shirley <3

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