The Richest Man in Babylon by George S. Clason is a fascinating lesson in personal finance written in short, easy-to-digest stories. It was first published in 1926, but the classic parable style and timeless concepts about how to build wealth continue to provide value as if it was written today.
Originally written as a series of pamphlets, the parables were eventually collected into a book. The book provides many timeless lessons about spending, saving, and investing to build wealth that are as applicable today as when it was first written.
The Richest Man in Babylon – Summary in 3 Sentences
The book is set in ancient Babylon, and follows the story of Arkad, the richest man in all of Babylon, imparting his wisdom to a younger man, Bansir, who wishes to become wealthy.
It lays out the basics of personal finance – spend less than you earn, save 10% of your income, and invest wisely – in an engaging parable format (stories told to teach a lesson). The book teaches that if you follows these basic lessons, work hard, and continue improving your skills, you can build future wealth through passive streams of income.
7 Lessons from The Richest Man in Babylon
The book is divided into three sections. The first 7 lessons are the “cures for a lean purse” that Arkad (the richest man in Babylon) shares with Bansir, and then there are two other related parables that impart the last two bits of wisdom. This article will cover the overarching lessons in the book.
Here is a summary of the main lessons from The Richest Man in Babylon:
- Pay Yourself First
- Live Within Your Means
- Put Your Money to Work
- Keep Your Money Safe
- Be a Homeowner
- Insure Your Future Income
- Improve Your Skills to Earn More Income
Lesson 1 – Pay Yourself First
This, my students, was the first cure I did discover for my lean purse: For
each ten coins I put in, to spend but nine.
The first lesson given by the wealthy Arkad to his students was to pay yourself first. This may be the most basic maxim in all of personal finance, but if you don’t follow it, you will never escape the paycheck to paycheck cycle.