The Richest Man in Babylon

Today I’m going to talk about the book The Richest Man in Babylon by George S. Clason.

It’s a book that I read a long time ago, and I learned some very valuable lessons from it. It’s also an old book. It was written in 1926. While it’s a short book, just about 150 pages, it has some great lessons. It tells the story of a character named Arkad and how he became extremely wealthy. Clason gives the lessons within this story.

  1. A Part of Everything I Earn is Mine. This lesson states that a tenth of everything you save.
  2. Cures for a Lean Purse. The first cure is controlled expenditures. Now you will always have the month-to-month expenditures, but you should try to control the ones that are unnecessary like eating out.
  3. Make thy gold multiply. This ties into compound interest. I don’t know if you have ever heard about doubling a penny every day for thirty days. So you start with one cent, then two, then four, then eight, and so on. By the end of the month, you have $5,368,709.12. Almost 5.4 million dollars in 30 days just by doubling a penny. That’s the nature of compounding.
  4. Guard thy treasures from loss. Seek advice from people who have actually been there who have actually do what you are attempting. If you are getting financial advice, make sure it’s from someone who has done that type of investment.  If you’re buying a business, speak to people who have purchased that type of business before you actually make that investment.
  5. Make thy dwelling a profitable investment. In this lesson, Clason states that you want to own your own home.
  6. Increase your future income by saving and investing your money.
  7. Increase the ability to learn. In essence, invest in your education. This can be formal education or reading books, it can be a matter of taking courses. Today we have so much information online and courses online that you can take. It’s silly to say I can’t learn anything because you can learn something with a few clicks.
  8. To attract yourself to good luck, it is necessary to take advantage of opportunities. When there is determination, the way can be found.

I came up with the 70-10-10-10 Rule from this book. This rule is to live on 70%,  give away 10%, invest 10%, and you save 10%. The investment can be in a business or stocks and bonds. Saving would be money to save so that you have a least a 90 day, rainy-day fund. The other 10% is going to the charities of your choice. This can adjust through your life. As your expenses decrease and your income increases, you can decide to live off 50% and maybe give away 30%. You can structure it however you would like. It is a way to determine if I give that tenth first to myself or first to a charity then you are actually taking control of the money. This is a principle that Clason talks about here. This book is rather old, so I want to show you something from the book.

“George was born in Louisiana, MO in November of 1874. He attended the University of Nebraska and served in the United States Army during the Spanish American War. A successful businessman, he founded the Map Company of Denver, CO and published the first road atlas of the United States and Canada. In 1926 he issued the first of a series of famous pamphlets on thrift and financial success using parables set in ancient Babylon to make each of his points. (That is where this book came from.) These were distributed in large quantities by banks and insurance companies and became familiar to millions. The most famous among this was The Richest Man in Babylon, the parable from which the present volume takes its title. These Babylonian parables have become a modern inspirational classic.”

So, like I said, it’s an old book but it’s a great book. To learn more about the 6 F’s (this book represents one of the 6 F’s, Finance) and to learn to live life out of balance in your life and in your work contact me at jgarrett@theascentperformancegroup.com or at www.theascentperformancegroup.com. And remember, Be Great!

 

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