The book " The Richest Man in Babylon" is written by George S Clason in 1926. George S. Clason shares here great wisdom of becoming rags to riches through parables of ancient Babylon. The book is a great read for anyone who wants to lead a successful life.
No matter what your current conditions are, you have got all the things with you that can change your life for good if you fully utilize them.
The book shares practical tips to change your life.
Book Review of The Richest Man of Babylon
Here is my review of the book" The Richest Man in Babylon" along with key points from the book that worth mentioning here.
2. If you practice personal finance then you know how to earn more money, how to keep the money, and how to avoid losses. And you don't need to work hard to learn these principles because they are easy but hard to implement. But, you can practice these principles and live a life of abundance, happiness, and prosperity.
3. The laws of making money, keeping money, and earning more from it are never old. Money is very important for all the earthly possessions because it can give you any earthly joy.
4. You must have sources of income that keep earning even when you’re sleeping, traveling, or doing anything. You must remember the famous quote from Warren Buffet “If you don’t earn money when you sleep, you need to work till you die”.
5. Money is a very powerful thing and it can help you build better facilities for yourself and people you care about. If you have money, you can help others. You can build hospitals. You can do charities. You can help the needy. You can take a simile on people. It is a wonderful thing and you must learn the basic principle to have it in abundance.
6. Pay yourself first; yes, we have to pay for the college education of our children, we have to pay for food, lodging, medicines, entertainment, travels, and what not but before paying to anybody we must pay to ourselves first. The book recommends that we all must save at least one-tenth of what we earn, if we can save more then that is better. Don't spend more than you can earn.
7. Don't take advice from everybody. You can't expect good financial advice from someone broke and living paycheck to paycheck. If you want to learn the art of making money then you must follow and learn from people who're honest, rich, and successful not from the people who are cunning and poor. The advice can make or break your financial future. So, always get it from the wisest and proven person in the field.
8. You can't get rich if the money does not work for you. And for this, you need to invest your earned money on assets and things which appreciate in values as time passes. If you fail to invest then you fail to get the most out of your money. Don't put your money idle, because it loses the value as time passes.
9. And once you master the process of making money, keeping it, and using it then you need to follow this rigorously without fail. Don't delay any of the outlined steps.
10. If you are earning anything, you can save a portion of it and if you don't earn anything then you need to start earning as early as possible. You don't need to save everything of you earn but only 1/10th. It is easy and doable and if you can add more then it would better. Save at least one-tenth of what you earn; This is the first cure to lean purse.
11. Don't touch your savings and invest them wisely after thorough study and advice from the learned people. Have a budget and stick to it. Your budget is a great tool to help you out in identifying where your money is going. Never withdraw from your investments to satisfy your gratifications or unwanted needs that are unlimited. This is a simple way to experience an abundance of money in the long run. Never spend more than you earn; Control your expenditures: This is the 2nd cure to lean purse.
12. Invest your savings in assets that grow as time passes. If you keep your money in a savings account then it is going to lose its value to inflation. Don't withdraw from your investments and give them time to multiply. And you would be amazed when you would find over a long period of time that your investments have multiplied many times of your original investment. Let your investment multiply; The third cure for a lean purse.
13. Don't invest in risky assets where you can lose even your principal amount. Always study and consult with wise people before investing your savings. You can get it more clearly here; if you don't know about investing why do you not hire an IFA who could help you out. You can read books about investing and be better informed. You can read investing in magazines. There are many ways to get help and increase your knowledge before investing and you must get the advantage of it. Protect your investments from loss; This is the fourth cure for a lean purse.
14. If your income is more and you are left with a sizable corpus after all your expenditures then you can have your own home. This is the fifth cure for a lean purse.
15. Invest for your retirement so that you could have a steady source of income when you're no more able to earn. And this is the sixth cure for a lean purse.
16. Always try to earn more by improving your skills and becoming more valuable by studying and acquiring more knowledge. Once you have acquired skills that are in demand then you become more valuable to the market place and you earn more. This is the 7th cure to lean purse.
17. If you have thoroughly checked all the details of any asset where you are interested to invest and you're convinced that it would give you good returns then you should invest without wasting time. Take actions immediately and don't procrastinate on good things. You can only enjoy the fruits of success if you take action and don't procrastinate when you're firm with your knowledge.
18. Five laws of gold; Save one-tenth of what you earn; Whatever you save, you invest it wisely; You always seek advice from learned people before investing; you invest in assets you know well about them; you don't invest based on some luring tips or expect the returns which are not achievable.
19. Don't lend your hard-earned money to unwise people who don't know how they would return it. If you lend money to such people then you may lose it all. If you're lending your money then you must always enquire how that person would payback? How would they invest money that would give good returns? Do they know things they do? How successful they have been in their earlier trades? Are they known to good people and have trustworthy records? If you don't get answers that satisfy your queries then you better don't lend your money for a total loss.
20. First, try not to fall into the debt trap but if you have debt then you need to pay it at the earliest. The life of a debt holder is very miserable. If you own debt then you may not live peacefully. So, plan to repay your debt. And always strive for living a good life no matter what your current condition is? If you have determination, you can find a solution to any problem you have.
21. There is a very humble plan to pay off debt and live a life of richness and respect and that is: Save one-tenth of all your income; not more than seven-tenths of all you earn must be spent on clothes, food, home, and other essential things; two-tenths of all we earn must be used to pay out any debt we have.
So if you earn $1000 a month you can: Put aside $100 for yourself ( you don't need to spend instead of invest in assets that appreciate as time passes)
$700 for your monthly expenditures (Your living expenses like home, buying clothes, paying your college fees, eating out, or anything)
And $200 to pay off your debt. Is not it a simple way to get out of debt?