This summary and review of the book, The Richest Man in Babylon, was prepared by Joshua Brungart while a Management student in the College of Business at Southeastern Louisiana University in Hammond, Louisiana.
The Richest Man of Babylon is a collection a short lessons whose author, George S. Clason, takes proven principles of the ancient world and expresses their relevance through several inspiring stories of how successful men lived in the great city of Babylon. These stories begin with the common issue for understanding how the wealthy became such and the pursuit of wisdom to acquire such riches. Arkad is represented as the richest man in the richest city and is given the opportunity to educate the public. His instructions pertain to his path for success and the processes to protect oneself from becoming broke. These stories will also include a reasoning of how good luck chases men and who can be a gift of such. This is a view that sees luck as a gift that can be only granted those who work on putting themselves in the position to receive it. Here opportunity and the ability to defend against procrastination will surely grant luck in ones life rather than simply wishing for it.Afterwards, the laws of gold are told with the story of a young man earning his way to a vast inheritance. Each law can be represented with this mans inability to understand them until he breaks them one by one. These laws are expressed even further with binding rules of money management.The rules of lending are brought to light with the story of a hard working spear maker who has earned a great deal of money and now has family members seeking a loan. He receives advice from a great money lender and is taught all the rules that must be followed in order to successfully lend this money out. This advice is given to ensure savings do not become a gambling loss and safety for finances is crucial. The last story carries this idea of safety over towards protection and security.Each which are always a must and are innate, but failing to carrying this concept over to money management is looked upon as foolish. Here,the walls of Babylon protect the city from attack and walls around one’s finances should be given just as much importance. Just as important as every single lesson this story has to offer to its readers.
The Ten Things Managers Need to Know from The Richest Man in Babylon
1. Each Manager needs to ensure they seek advice from individuals who are currently successful in their current pursuits. A manager can find many solutions to their current problems by just asking for help from someone who has already been through these issues.
2. Every Manager that mishandles money will find themselves without luck or opportunity. This book explains the reason for luck and the way it finds those who chose to follow the rules of finance.
3. All managers should realize that without savings or retained earning there is no way to accomplish wealth. These savings should be taken and put aside before anything else is paid for, or savings will not be done. It is common to attempt to save after paying for expenses but doing so in this order is setting oneself up for failure.
4. Every Manager needs to control their expenses with extreme care. This is especially important when revenue is increased.Most individuals increase their lifestyles or expense due to an increase in income.Always maintain an operation within its means and not above so.
5. Every Manager needs to know that if they fail to put money away that is earning interest they are costing themselves a large fortune. They must be diligent when it comes to using resources instead of allowing them to multiply.
6. Every Manager needs to be constantly increasing their capacity to earn even more. Generally this is referred to as development but it is also described and individual pursuit for learning and growing.
7. Every Manager needs to know that if they attempt to help out their friend make sure they are not putting a greater burden on them. For example, if another individual needs financing, make sure they have the ability to repay or they will be in an even more difficult situation.
8. Ever Manager needs to know that nothing can be accomplished if there exist no determination to do so. Even for the most difficult tasks, the will do complete it is the most important aspect of the situation.
9. Every Manager needs to be modest in their attempt to multiply their savings. Many managers believe that if they can justify an investments risk for desperately high returns than everything is fine. Unfortunately, this is not a wise approach and this book highlights this point with an explanation of a smarter approach.
10. Every Manager needs to realize that despite technological advances or new-age policies, the fundamentals will always need to be considered. Fundamentals like the correct handling of finances will survive over time and ensure sustainability regardless of the situation or environment.
Full Summary of The Richest Man in Babylon
For those interested in the timeless truths regarding sound financial wisdom of the ancient world, The Richest Man in Babylon is a serious must. George Clason, through his simple interpretations of Babylonian parables, makes us feel as if we too can become the richest in our own land. With inspiring stories of this ancient time, the message has been successfully related. The heavy burden of a light wallet, or empty purse bring the fear of the unforeseeable future and has been upon us all. Yet, with these tested and proven principles of finance we may never go without again.
The Man Who Desired Gold
The beginning completely sets the tone with the archaic style writing. The reader is introduced with a character that almost everyone can relate to. Bansir, a struggling chariot builder who finds himself in an troubling conversation with his good friend Kobbi, a musical entertainer, who seeks to borrow some money. Bansir, of course, has nothing to spare to even his best friend and both men have no finances. These men are puzzled with their lack of wealth despite all the skills and effort put into their professions. These hard working men believe the solution and reason has exist with their friend that they both grew up with and has happened to turn out to be one of the richest men in Babylon.
Bansir and Kobbi meet with their old friend, Arkad, the very successful businessman. Arkad has been reached to understand why fate has favored him so much and to learn why he has become so rich while they remain poor. It was apparent that unfairness had been felt by both laborer because Arkad had not worked harder than they did. Arkad is quick to explain that he had spent much time as a scribe for a wealthy man, Algamish, and too found himself working very hard for someone else. This rich man had delivered to Arkad a secret to become rich. He stated that, “I found the road to wealth, When I decided that a part of all I earned was mine to keep”. This simple yet very effective message is much more appealing than to merely save money. Although, the principle to save always is understood amongst most men, this way of describing the idea suggests that most of the money that is earned is indeed for someone else and to remember to save a portion for one’s self.The Richest Man in Babylon
Arkad expresses that he did exactly as he was taught,he took only one tenth of his earnings for that whole year, afterwards attempting to invest those savings into jewel trade. It did not take long to learn that his first attempt in investing was a mistake and he had foolish entrusted his savings with a brick-master who nothing of jewels. Arkad learned the valuable lesson of investing in those who are knowledgeable in their financing endeavours. This experience encouraged Arkad to save again and then invest with Agger a shield maker, who borrowed these funds and return dividends to Arkad. However, Arkad had another lesson to learn about spending those earned dividends on robes and frivolous things. His advisor clearly stated that Arkad is , “eating the children of his savings” by choosing to spend them and not reinvesting. After learning these lessons of finance Arkad is then selected to manage Algamish’s estate in Nippur and is the reason for his great wealth.
Seven Cures for a Lean Purse
At this point the King of Babylon,Sargon of Akkad, discovers that his kingdom his becoming broke and financial distraught. Unemployment has struck most of the good hard working citizens, leaving their families without money to buy food and necessities. The King suspects that almost of the money is in the possession of just a few wealthy men and becomes interested in finding out how. The king is not trying to punish these men for acquiring such vast amount of gold, but instead he wishes that all of his citizens learn the secrets to accumulating wealth. The king decides to take action and demands Arkad to teach his people how they too can become rich and avoid the burden of a lean purse. Arkad agrees to the King’s request and begins a series of lectures to large group of men, ensuring they learn the lesson involving the seven cures for a lean purse.
The first lesson is the most simplest to apply and understand and Arkad says clearly, “Deride not what I say because of its simplicity, truth is always simple. This lesson is to “start thy purse to fattening”, and Arkad is very clear and instructs the men to continue working hard at what they do, but to put away one tenth of what they earn first.The second lesson is one that many people feel they are good at but in fact they are not and it is because it can be very difficult.This tough task is stated as, “control thy expenditures”, where Arkad explains to the men that the ability to recognize what a true necessity and mere desire is and to be able to differentiate the two. The third lesson revolves around the concept of investing the savings that have been put away. The next lesson is stated as, “guard thy treasures from loss”, for here Arkad describes the importance of insurance for your investments, primarily protecting this money from our foolish selves. During this time the men learn from Arkad’s teachings that ,”Often friends and relatives are eagerly entering investments”, and the first sound principle of investment is security, otherwise it becomes gambling. The next lesson was is important and was not as a popular idea during ancient times as it is today, but to own a home instead of renting entirely is much more wiser. The next lesson involves mainly insurance for a future income in case of retirement and death. Many men do not plan for retirement until it becomes too late or too difficult, and protecting income for this time will support a stronger household and family. The final lesson consists of setting goals to better one’s self so that he may be able to earn more throughout his life. Arkad explains the importance of continuously growing and learning to acquire knowledge which will in turn guarantee even more earning power. The entire teaching comes to a close as Arkad states,” Cultivate thy own powers, to study and become wiser, to become more skillful,to so act as the respect thyself. Therby shalt thou acquire confidence in thyself to achieve thy carefully considered desires.”
This next component of the teachings of the richest man establish with a Babylonian proverb referring to the concept and perception of luck. “If a man be lucky, there is no foretelling the possible extent of his good fortune.” Arkad explains with additional men about the view of luck and the Goddess that grants it upon certain men. He then expresses how Luck comes to those who remain disciplined in their work and their finances. Arkad is quick to defend the idea of gambling, where the odds are stacked against him, but focuses on paying attention to opportunities that present themselves. This is where Arkad feels the importance to remind men to guard against themselves, for procrastination ……..”Men of action are favored by the Goddess of Good Luck.”
At this point during the book a shift takes place to a citizen named Old Kalaba. Kalabab begins to tell the story of Nomasir,another citizen, who adventured out into the world to make something of himself. Nomasir was blessed with a financial head start by his father but did not take of this gift very well and lost all the money that was given. Despite his foolish ways and mishandling of money, Nomasir did learn from his mistakes and was able to relate the Five laws of Gold that his father stressed he learned. Each law of gold brings personification and a spirit Gold by expressing the behaviors it can possess and how to do control it. This view of money suggests that money is not inanimate entirely and in fact is a tool that carries a will of its on. Everyone of these laws displays a sense of caution in the handling of money and while pertaining to the significance as if each were undeniable facts within our word. Kalabab eventually leads to his conclusion of how Nomasir mastered and followed each law and became extremely rich. However, the message remains true with the understanding of prioritizing the choice of wisdom over immediate income.
The Gold Lender of Babylon
The following part of the lessons involving money is titled “The Gold Lender of Babylon where the reader is introduced to Rodan, an excellent spear-maker. This story is delivered in the third person and introduces the dilemma that Rodan faces once he receives a great payment for producing spears for the king. Rodan seeks out Mathon, a man known for lending gold, to ask for financial advice. At this point, Mathon is completely caught off guard due to the fact the most people come to him to borrow money instead of advice on what to do with money. Mathon responds to Ragon’s request by inviting him as the guest of honor at Mathon’s dinner later that night. This is when Rodan expresses his concerns that his sister is requesting money from him so that his brother-in-law, Araman. The idea behind the request for finances is for an investment purpose involving Araman becoming a merchant in Babylon.
This dilemma helps Mathon deliver another important lesson involving money with a story of a farmer who could listen and understand what animals were saying to each other as if they were speaking his language. The story begins with the farmer hearing of the ox and his issue with the donkey about how unfair it is that the donkey only needs to carry the farmer while he has to plow the field.
The donkey suggested in a sarcastic sense that the ox attempt on taking a day off by claiming he had become ill and too weak to work.. The very next morning, The farmer had was forced to find an alternative to the ox and decided to use the donkey to plow the fields. This obviously made the donkey very angry, while at the same time the ox thought it was a great idea and even thanked the donkey for suggesting it in the first place. The donkey responded in with resentment and basically told the ox to handle his own work from now on and to no be lazy. This ended the friendship between the donkey and the ox.
After Mathon educates Radon of these sort of lending concerns, Mathon begin to tell of two stories each of which pertaining to different sort of borrowers. The first story pertains to a woman who wished to borrow money so that her son could use venture into the world of merchants. Mathon could easily recognize that her son had not what it took to become a successful trader, but was able to relate this to the mother without offending her. However, the mother offered valuable jewels as collateral which were worth more than the borrowing amount, so Mathon could not refuse this opportunity. Mathon’s next example tells of a man who no longer requires any physical security, but rather a simple knot on a rope to remind him of the debt. This man has been consistently successful in his ventures and has always repaid the loan. This example is then related to Rodan to show that borrowing can be good as long as the purpose is wise and well thought out. Mathon concludes by instructing Rodan to read a carving beneath his token box where the etching states, “Better a little caution than a great regret”.
The next aspect of Mathon’s advice involves whether or not the loan would be good if the borrower were unable to repay. Here Mathon teaches Rodan of the three distinct types of borrowers that are in our world how they are different. The first type of person who borrows money always places more security with their promise than they intend to borrow against and these people are always safe to lend money to. The second type is based on their ability to earn a substantial income and their capacity to repay the loan and are too always good for a loan. The last type of borrower is not worthy of a loan due to the fact that they have neither property nor the ability to earn and are extremely unlikely to ever repay the loan.
The Walls of Babylon
This small story consists of a soldier who guards the gates in the city of Babylon named Banzar.Banzar stands guard at the walls for an entire month while a siege is placed upon his city. During the attack, Banzir is approached by many citizens who fear the city will fall. Each time someone questions the soldier on whether or not the walls will hold, Banzir assures them that they will indeed hold. Here the narrator proclaims the significance of adequate protection from all sorts of attacks and tragedies that we all face. Insurance, banking accounts, and other modern forms of protection are crucial to maintaining the path for wealth.
The Camel Trader of Babylon
The readers are now introduced to a man named Tarkad who has appeared to run out of luck and has nothing to his name. Tarkad unfortunately runs into a camel trader named Dabasir who wants the money that was borrowed. Tarkad is forced to tell Dabasir that he does not have the money he owes and as of right now has nothing. Dabasir is not pleased but feels that he must relate his own story of when he too was at the bottom. Dabasir begins his story with the time when he was a young married man who was working for his father. He had made many foolish mistakes with his finances and was living an beyond his means.Soon, his naive nature catches up to him and after his wife becomes aware of his failure she leaves him and Babylon. It only gets worse for Dabasir as he eventually is captured and sold as a slave in Syria.
As a slave, Dabasir is selected by the master’s oldest wife as a camel tender instead of a eunuch. Dabasir eventually tells this lady that he is actually a free man and not a slave by birth. The oldest wife finds this hard to believe due to the fact that a free man does not allow himself to become a slave and that he must actually have a soul of slave. Dabasir disagrees and begins to separate himself from the rest of the slaves to show that he is not content with his current situation. Dabasir is then presented with an opportunity given by his master’s oldest wife to escape back to Babylon. He gratefully accepts this moment as a chance to face those who he is in debt with and work hard to repay them. He understands that his situation was turned around because of his attitude and “where the determination is, the way can be found”.
The Clay Tablets from Babylon
The reader is given more details on how Dabasir managed to pay back those who loaned him money. the message is put together by a fictitious professor named Alfred Shrewsbury who translates ancient Babylonian tablets of stone.
The First Tablet tells of Dabasir taking his friend’s, Mathon, advice on how to manage his finances. Dabasir promises to keep one-tenth of all he earns, pay all his expenses with seven-tenths, and use the remaining two-tenths of his income to pay off his debts.The Second Tablet tells of how Dabasir split twenty percent of his earnings to pay his creditors. He also details with a list of everyone he owes money to and how much. The third Tablet is translated to Dabasir’s acknowledgment of his foolish ways with finances and his experience with facing the lenders. The translation expresses Dabasir’s determination to repay them all and deal with each of them.The fourth tablet states that Dabasir’s plan has been going smoothly for the past three months including saving and paying off debts. The fifth tablet says that is has now been a year and Dabasir has just recently payed off his creditors and some of these lenders have become impressed and are willing to lend to him again in the future.
The professor that is translating these tablets is thinking of attempting to do exactly what Dabasir was able to do successfully. Alfred confronts his lenders and tells them that he will split his income as well and put twenty percent towards his debt. The professor states that his plan that he used went well and despite the difficulty, his wife and him were able to live on only seventy percent of their income. This allowed them both to save for retirement while paying off their debts completely.
The Luckiest Man in Babylon at this part of the book the reader is introduced to a merchant prince, Sharru Nada, who is on a mission to guide a caravan into Babylon.Sharru is currently in business with Arad Gula’s grandson, Hadan Gula. Arad had been a long standing business partner with Sharru and is has recently passed away. On their Journey together Sharru finds that it may be the right time to tell Hadan the story of how how he and Hadan’s grandfather became partners. He begins this by questioning Hadan of how a rich man should live, and is responded with a negative view of hard work and his grandfather’s ability to “attract golden shekels”. Sharru tells Hadon that he used to be a slave, and in fact travel as so on the same road him and Hadan were currently on. Alongside this road there were farmers just as in the past during Sharru’s slave days, and during that time another slave named Megiddo proclaimed the farmers were not working hard enough. Megiddo explained that the farmers were failing to plow deep enough and would result with a poor yield for the crop. He was met with resistance by another slave named Zabado who suggested that the farmers were smart for not working too hard for someone else. An argument was initiates and Megidoo refused to agree with that thinking and was proud of hard work, for it granted many good things in his life. Later that night, Sharrue snuck up to the side of the slave dens and asked Godoso, a guard, for some advice. Godoso didn’t hesitate to tell Sharru that the slave action was important and he should try to have the buyers want him, this way he could avoid being a brick carrier for the king. Sharru takes this advice and related it to Megiddo the next day and they both decide they will try to convince the buyers to purchase them at the upcoming auction.
Right before the auction took place, Megiddo suggested to Sharru that he begin to like and accept work, despite it being difficult. Soon after this a farmer and a baker both inquired about the two slaves, and Sharru found the opportunity to speak up and pursue his purchase. Eventually, after a great deal of persuasion, the baker bought Sharru and allowed him to work his way towards more responsible tasks. Sharru thought of many ways to bring his master even more money, including a plan to to market the baked goods to the city. Sharru’s master was so impressed with his ability to work he allowed him to keep a portion of the extra money that was being earned. After a while, a group of loyal customers, including a man named Arad Gula began to recognize Sharru’s work ethic. Sharru found out that Arad too was a slave who had saved enough money to buy his own freedom but was afraid to venture out on his own. Sharru was able to convince Arad to become a merchant himself and was later able to purchase Sharru’s freedom. Arad decided to invite Sharru to become his new business partner, because he knew of Sharru’s ability to work hard and earn.Here Hadan, Arad’s grandson becomes aware that his grandfather’s ability to attract gold shekels comes from only one thing, hard work.
The Video Lounge
Here is just a very simple video about Babylon and one of the kings that ruled over the land. It discusses the importance of gathering ancient clay tablets and deciphering their purposes. This video also expresses a great deal of relation to the city and the Bible.
Why I think:
- The author is one of the most brilliant people around, because:
He is able to deliver these very important messages in a way that is not heard in the traditional sense. I, like most solid readers, have a fascination with history and to read about the lives of successful men who lived in an ancient city like Babylon, this carries a great deal of weight when delivering the lessons.
- With business conditions today, what the author wrote is true because:
The lessons in this book are based on common sense and wisdom based principles. They will never go “out of style” nor will these lessons need to be updated to any real extinct. In fact, many businesses would benefit greatly if they were to go back and review these type of fundamental ways of conducting themselves.
- If I were the author of the book, I would have done these three things differently:
1. The first thing I would have done differently, is included more insight on Arkad, the actually richest man of Babylon. He was the main character behind the book itself, but was mentioned only in the beginning of the book and not so centralized. Perhaps, the lessons towards the end of the book could have related more with Arkad or another major player from the city.
2. The second thing would have to elaborate a little more on the exact way to control ones expenses. It is common knowledge to keep expenses down, but it is always an extremely difficult tasks. It becomes even more difficult once a raise or additional income is brought on. Giving more details on the steps to ensure expenses can be maintained would have be far more beneficial.
3. The last thing to mention about a change would refer to the lack of coverage for emergencies. The only real mention of these events is about saving for retirement or disabled and unable to earn an income. More information about different emergency purchases could have included and how to prepare for those and considering them as a part of the formula to managing one’s earnings.
- Reading this book made me think differently about the topic in these ways:
1. The idea of savings is pretty common, yet practiced very seldom. However, the idea to save off the top regardless of expenses, was quite different and caused me to rethink my saving strategies. It can seem hard and almost unwise to do so in that order, but practice definitely makes perfect and eventually it turns into common sense.
2. This book made me rethink the process of lending. I originally would never lend money in anyway, mostly because I detest debt in anyway. However, I noticed that it could be done in a way that is more like an investment rather than a “lending” sense. I will still refrain from investing with family regardless.
3. This book also changed my traditional way of thinking in terms of money as having innate laws behind it. To view money as a tool is one thing, but to consider laws that should be followed and not broken tends carry more weight. This weight brought with gold now allows me to be much more cautious with every transaction, and I am very grateful of this.
- I’ll apply what I’ve learned in this book in my career by:
1. Ensuring that regardless of income or expenses savings will occur on a steady and constant basis. I have great dreams for my career, so I know I will have a large income throughout my lifetime, but to remain frugal is important to me. This will also be instilled in my children’s lives so that they can earn the chance at a great inheritance.
2. Maintaining a continuous sense of development by reading and learning from successful people. Regardless of how much I might think I know, I will always be learning and I am ensuring that what I learn can give me more earning potential. This drive to pursue more knowledge has been with me my whole life and there is exist no plan to stop.
3. Continuing to advise others about personal finance and wealth building. I have always maintained a personality that brings an urge to tell others about certain lessons in life that carry great importance. The principles of finance are one of those lessons, and no matter where I work or what my career is, I will continue to advise others about wise money management.
- Here is a sampling of what others have said about the book and its author:
“The Richest Man in Babylon is one of my favorite finance books of all time. I forced all three of my children to read it when they were teenagers. It’s a terrific collection of stories written in the early part of the 20th century by George Clason.”
“In short, buy this book if you learn well from stories. If a well-told tale of the experiences of others is the way that you learn, this book will be very enlightening. I often learn this way, as I learned about totalitarianism from 1984and objectivism from Atlas Shrugged.”
“Overall it is great book to learn how to make flowing wealth, which can not be stolen. As per book, wealth building is wisdom and not occasionally acquiring Gold. This book tells you how to bend streams of wealth flowing towards you. If you just got into some business or some service, don’t wait before you make any mistake in your concern. Start building your wealth now. If you’ve been disappointed for various reasons you lost the money, there are great laws to learn here”
Watson, P., & Langford, R. (1997). Business book reading. Brw, 19(44), 18.
Peddling wisdom. (2011). Economist, 400(8755), 98.
Rick Furri (2010). The Richest Man in Babylon. [ONLINE] Available at: http://www.forbes.com/sites/rickferri/2010/09/01/the-richest-man-in-babylon/. [Last Accessed 28 February 13].
Trent Hamm (2006). Review: The Richest Man in Babylon. [ONLINE] Available at: http://www.thesimpledollar.com/2006/12/23/review-the-richest-man-in-babylon/ . [Last Accessed 27 February 13]
Unknown (2007). The Richest Man In Babylon Book Review. [ONLINE] Available at: http://deepjava.com/The_Richest_Man_In_Babylon_Book_Review.jsp. [Last Accessed 27 February 13]
To contact the author of this article, “A Summary and Review of The Richest Man in Babylon by George S. Clason,” please email firstname.lastname@example.org.
About the Publisher
David C. Wyld (email@example.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. His blog, Career News 24/7, can be viewed at http://wyld-about-careers.blogspot.com/.