Book Review: The Richest Man in Babylon

Author: George S. Clason

Genre: Personal Finance


This is a book written for avid personal finance enthusiasts who are just starting out and need to learn the tenets of being successful. Many choose ‘Rich Dad Poor Dad’ as a starting point in the world of Finance and Investment. I, on the other hand, would rather suggest you read this book first. Regarded as a classic of personal financial advice, there can’t be a more fundamental book in this category.

The book focus on the city of Babylon which during its time was the richest city on earth. It was known for its wealth, splendor, treasures, gold and jewels. It was an outstanding example of man’s ability to achieve greater objectives, using whatever means were at his disposal. The outstanding rulers of Babylon are timeless pieces of advise because of their wisdom and enterprise. Today, although this city doesn’t exist anymore, it gives a lot of lessons to the world, specially those related to money.

So how were the treasures of wisdom unfold when the city is 8000 years old?  In the distant day, the use of paper was not invented. The people laboriously engraved their writings upon tablds of moist clay. When completed, these were baked and became hard tiled. Upon these clay tablets archaeologists have discovered a lot of things and that is what has been decoded in this book.

Two labor friends Kobbi and Bansir are not rich  so they go to Arkad for financial advises since they all started even but only Arkad made it to the riches. The entire book is about Arkad teaching Kobbi, Bansir and other disciples lessons on wealth.

Here is an excerpt from Wikipedia which highlights the 2 most important lessons of the book

This book is a group of parables divided into general themes of advice, and particularly “The Seven Cures” and the “Five Laws of Gold”. Listed below are the rules in archaic English language with their explanations.

Seven Cures for a Lean Purse

  1. The First Cure: Start thy purse to fattening.

Save 10% of your annual income to start building up your wealth. After a period of few years the compounding effect would kick in and start flourishing you with passive income.

  1. The Second Cure: Control thy expenditures.

Keep luxuries and desires at bay to start with and concentrate only on necessary expenses.

  1. The Third Cure: Make thy gold multiply.[15]

Let compound interest shows its magic. Learn to make your monry work for you. Make it your slave. Make its children and its children’s children work for you

  1. The Fourth Cure: Guard thy treasures from loss.[15]

Stay away from get-rich-quick schemes. It is better to stay away from such schemes than to fall for it and later regret.

  • The Fifth Cure: Make of thy dwelling a profitable investment.[15]

But land properties and make passive income by renting it out. One can use other strategies like renting out patents or earning royalties on written work.

  • The Sixth Cure: Insure a future income.[15]

Plan for your retirement. When you are unable to work due to age issues, one must have enough income to support himself and his family.

  • The Seventh Cure: Increase thy ability to earn.[15]

Arkad advises to keep developing your own skills to increase your investing wisdom. The more you hone your skills, the more your earnings power would increase likewise the more wisdom we can squire the more successful we can be.


The Five Laws of Gold
  1. The First Law of Gold. 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.

This advice is similar to the first cure for a lean purse.

  1. The Second Law of Gold. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.[15]
  2. This advice is similar to the third cure for a lean purse. It tells you how to grow your income by means of compound interest.
  3. The Third Law of Gold. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

Invest under the advice of experts or be an expert yourself and then invest. Be careful with matters related to money.

  • The Fourth Law of Gold. 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.

Invest only in what you understand be it stock market or a new business.

  • The Fifth Law of Gold. 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.

Avoid get-rich-quick or aggressive wealth creation strategies. They are too good to be true.

Other parables in the book are but not limited to:
  • The Gold Lender of Babylon.  And why he suggests you to be cautious than be in a great regret
  • The Walls of Babylon and what they teach you about protection and insurance.
  • The Camel Trader of Babylon and what the trader teaches you about be determination.
  • The goddess of Gold and why the goddess favors men of actions.
  • Why home ownership is important.

Pre-requisites before reading the book: None

Is the content relevant even today? Yes

Vocabulary and Understandability: 

Easy to understand but the book also uses archaic English language.

Level of investment expertise required: Any

How can it benefit you?

This book can teach you the following lessons

  • To bring success to your life, you must first be successful with money.
  • One must be wise and take only those ventures in life that the person is well versed about. Saving 1/10th of your income may probably not be a big thing and everybody can do it without a lot of problems.
  • On the long run, the saved money compounds manyfold and puts your money to work. Money is plentiful for those who understand the simple laws of making money.
  • Don’t spend your money as soon as you earn it.
  • Surround yourself with people who are familiar with money and are genuine enough to give you honest advice.
  • One must make sure his income continues to work even when the person stops working.
  • Improve your ability and hone your skills to earn a better living.
  • If you are in debt, live on 70% of what you make. Save 10% for yourself. Use the remaining 20% to repay your debts.

While you may have learned a lot from the post itself, imagine the quality of information that you would get if you read the entire book!

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