When it comes to accumulating wealth, there are a variety of principals which have been passed down for centuries. Rather than looking at financial advice from the perspective of “which stock should I buy?” this book provides a much more holistic look on the values and ideas that we can all leverage to increase our monetary reserves.
Interestingly enough, the literature from “The Richest Man in Babylon” was discovered on clay tablets, the modern writing medium prior to the invention of paper. As such, the stories and values shared in this novel dated back as long at 8,000 years ago. It’s truly fascinating to recognize that regardless of how far we’ve come as a society, all of these ideas are still extremely applicable today.
Babylon is the most famous city from ancient Mesopotamia whose ruins lie in modern-day Iraq 59 miles (94 kilometres) southwest of Baghdad. The name is thought to derive from bav-il or bav-ilim which, in the Akkadian language of the time, meant ‘Gate of God’ or `Gate of the Gods’ and `Babylon’ coming from Greek origins.
Seeing as this book is relatively short (<200 pages), I’ll be recapping the majority of the chapters in a quick list followed by a look at some of the more compelling stories in the latter half of the novel.
- A percentage of all I earn is mine to keep (no less than 1/10th)
- For every 10 coins you earn, only spend 9
- Control your expenditures
- Make your money multiply
- Guard money against loss
- Use savings to fund profitable investments
- Ensure a future income
- Increase your ability to earn
- Better a little caution than a great regret
Generally speaking, the concepts described above are pretty self-explanatory. To speak of the principles more broadly, a portion of all our income should always be saved. Whether this is cutting down on unnecessary expenses such as drinks on the weekend or new clothes, it’s important to determine how to not only live within our means but also how to thrive within those means.
When it comes to saving wealth, we’re talking about something minor like 10%. As such, the narrator suggests that when we establish a routine of savings, it’s likely that we’ll want to increase this percentage when we recognize how quickly those savings are increasing our standing.
Financial “opportunities” can represent a wide variety of situations. Back in Babylon, there was no stock market, meaning that “investments” were largely word of mouth agreements between friends (i.e. a shield merchant using funds to buy more supplies). Putting this into a modern tense, there are a variety of ways for us to leverage “opportunities” regardless of our social standing.
From a high level, many of us are familiar with a 401k. Taking this a step further, the book encourages us to seek new opportunities that require a little more active participation and research. It’s likely that these early-stage investments *could* have more upside than a small savings APR (which is still great!). It’s important to note that we should always approach these opportunities with caution, as most of the times financial returns that seem too be good true almost always are.
Key Quote: “Good luck comes to those who seek opportunity”
The Walls of Babylon
Taking a look at Babylon as one of the earliest financial meccas, let’s examine some of the reasons why it was able to grow to such a prominent city.
First and foremost, Babylon endured because it was fully protected. It was said that Babylon was surrounded by walls as high as 150 ft, an incredible feat when we think of the lack of machinery used to accomplish this task.
Secondly, it was said that man has an inherent need and desire for protection (savings accounts, insurance, dependable investments). Seeing as adequate protection is a fundamental building block of a successful ecosystem, Babylon served as a strong aggregate of wealth due to its security and reputation.
Despite the fact that Babylon had many kings, it was able to avoid enemy raid for centuries, meaning that merchants and traders from neighbouring nations could feel confident that trips to Babylon would always be both safe and opportunistic.
The Camel Trader of Babylon
In this chapter, we recount the journey of a camel trader who went from being a slave to a successful businessman. Some of the biggest takeaways from this story included:
- The hungrier one becomes, the clearer one’s mind works
- No man is otherwise who cannot repay himself and cannot repay his honest debts
- Where the determination is, the way can be foundYour reputation is everything. More so than anything else, we are the makers of our own destiny. If you wish to accumulate wealth in life, you need to work harder and smarter than your peers.
Key Quote: “The soul of a free man looks at life as a series of problems to be solved and solves them”
The Luckiest Man in Babylon
In order to increase your reputation, you must first find a clear perspective. In this chapter, we take a look at a successful leader who describes how he was able to rise from slavery to become one of the most prominent members of his village. This chapter was particularly powerful to me for the following statements:
- I like to work and I like to do good work for work is the best friend I have ever known
- Work well done does good to the man who does it. It makes him a better man
When it comes to work, learn to love each and everything you do. Even if your job entails performing a service that doesn’t add much personal value, try and approach it with a smile. This story talks about how the man’s desire to succeed ultimately lead him to meet the same individuals who gave him his freedom. We never know when we might meet someone who can drastically influence our future, so it’s important to always approach our work with a sense of purpose.
Key Quote: “Enjoy your work more than your desires”
Babylon is responsible for one of the earliest engineerings feats. They leveraged irrigation to bring water from the Euphrates river to fertilize the soil to grow crops. So far as written history goes, they were the first engineers, the first astronomers, first mathematics and first financiers and the first to have written a language.
When applying these principles to our lives, the potential for growth becomes that much more attainable. I personally felt that the way these lessons were portrayed made them that much more memorable, so I’d highly suggest checking out this book if you’re looking for a quick, yet valuable read.
Thanks for reading and be sure to shoot me a message on Twitter for future recommendations!