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Book Review: The Richest Man in Babylon

Submitted by jroos on Thu, 02/10/2011 - 21:51

"The Richest Man in Babylon" by George S. Clason is for anyone who wants to change their financial picture. While income influences your financial picture, what you do with money is the real determining factor as to whether you will see long term financial success or a life of living paycheck to paycheck.

In a time of financial crisis the best thing we can do is make sure each of our own houses are in order. The author calls this book a “book of cures for lean purses” and identifies it’s purpose “to offer those who are ambitious for financial success an insight which will aid them to acquire money, to keep money and to make their surpluses earn more money.”

This book is a compilation of stories that deliver financial truths set in ancient Babylon. Having set out to improve our family finances a number of years ago, most of the ideas in the book were not new to me.

One of things I had a hard time with initially was the style. This book was supposed to take place in ancient Babylon right? Well the writing style was a lot like King James English. Once I got over the stylistic issues the information was useful and the stories were enjoyable. Since reading this book I’ve discovered that the stories have been rewritten in a more comfortable modern English.

Among the stories in the compilation, “Seven Cures for a Lean Purse” is probably one of the most important. Areas addressed are:

  • saving 10% of one’s income,
  • controlling expenses,
  • investing your savings to make it grow,
  • investing wisely to avoid losing the investment,
  • turning the basic need for shelter into an investment through owning your home,
  • making sure to invest sufficiently to provide a future income and
  • growing personally to improve your value (and income) in the marketplace.

Other areas covered in the rest of the stories include gambling and good luck, lending cautiously, the importance of protecting your family and things through insurance, the importance of getting out of debt and the value of work to not only your financial future but also your outlook on life.

Although written over 75 years ago this book still holds essential truths. If you work hard, save regularly and invest wisely, you will over time become wealthy. In my opinion these truths are lost to our generation.

The financial mess our culture is in is a direct result of believing we can get rich by spending everything we have, going deeply into debt and not having to work hard for any of it. If half of our population would read this book, take it to heart and put it into practice we would see a solid, lasting recovery from our economic woes.

If you’ve already taken a Total Money Makeover approach to your finances, this book is not an essential read. However, if you know you need something to change financially and you’re not ready for red meat, start here.

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