The Richest Man in Babylon by George Samuelson
One Line Summary
The greatest ancient financial wisdom
Money. Love it or hate it, let’s admit it.
You want it.
Personally, my family grew up pretty wealthy. My dad was a small town dentist who owned his own practice and was successful enough that we could live a very stable and sometimes extravagant life.
For that reason, I never placed a huge value on buying “things”. I saw very early on the limits of money on your happiness and never developed this consumer trance that spending = the good life.
In fact, I don’t buy much of anything. In college I was the guy who lived in a room with four white walls, never bought clothes until mine literally worn out and simply stock piled everything I earned from working. I continue to live that lifestyle today and don’t think it will ever change because I just don’t care about buying shit.
That all being said, hell yes I want money.
Money is energy. All the things I care deeply about, like AurumReviews.com, personal growth, new experiences, contribution, require money. Lots of money.
That’s why I read books like The Richest Man in Babylon. I want energy.
This book is really a great little find. Formatted as a series of stories, The Richest Man in Babylon drops ancient financial wisdom that will last forever.
Everything here is timeless, tried and true. It’s not groundbreaking or exciting. It just works.
By the way, I realize that I’m not someone who has amassed a huge future. But I do have a Master’s degree in Financial Economics.
So don’t look at this review as I’m some rich, financial guru. Look at it as me saying, “here’s what the greats are doing”.
Let’s keep going.
Why it’s Awesome
As I mentioned, this book just works. It’s amazing to me how people can get even the basics of wealth creation completely backwards. A friend of mine who is a loan officer once told me that he has people try to take out loans on their loans.
So if nothing else, hopefully this review will stop you from making net negative decisions with your money.
As I mentioned, this book is formatted as a series of stories. I don’t give a shit about the story so I’m not going to talk about that at all. I’m just going to hit you with the best pieces of advice.
Read the book if you want entertainment.
Save 10% of Your Income
Every time you receive income, take 10% of it and save it. Do this before you start to pay any bills. Assume this saving is non-negotiable.
I love this because it forces you to figure out how you’re going to pay your bills and save money. Most people look at savings as what you have left over after you’ve gone through all your expenditures.
The problem with the “pay bills first, save later” mindset is that you’ll find that you never have any money to save. When you save first, now you’ve got no choice.
If this seems impossible for you, don’t freak out. Remember that this is tried and true wisdom. It wouldn’t have been passed down if it didn’t work.
Have some faith in yourself that you can do it.
It’s a simple trick. But it’s brilliant.
Reinvest Your Savings
You always want to be focused on growing your income. By eventually reinvesting the savings you have, you’ll always have money flowing in.
This is the “takes money to earn money” philosophy people talk about. By investing what you already have, that gives you more money, which lets you invest more, which gives you more money.
That means you don’t just save everything and sit on it because you’re paranoid you’ll never be able to get it back. That’s scarcity mentality. You’ve got to put your money to work and EXPAND.
Once you’ve decided you’re going to invest your hard earned money, learn how to do it right. That’s because investing opens yourself up to a whole new world.
There are no shortage of bad investments. And they will find themselves to you
That means not investing in areas you don’t understand or don’t have expert approval on. That means not chasing impossible returns.
Someone I know just got scammed because she invested her money in an instrument that promised not 100% return, not 1000% return, but 10000% return.
This is called “fantasy”. Unless you’re investing in Facebook when Zuckerberg was still in his dorm roam, you are never going to get these kind of returns.
The problem is people don’t believe in themselves, so they feel like they need miracle. Get your self-esteem up and watch your bad investments fall away.
Until then, people will just see the dollar signs and be blinded. There’s not much stronger than the “I want to believe” effect.
Control Your Expenditures
Culture has got people brainwashed that real wealth is living like a rockstar. It’s just champagne, clubs and Lamborghinis all day.
Obviously wealthy people can afford very nice things. But the reality is that people who are wealthy and stay wealthy know how to control their spending.
Does that bother you? Why? What do you think that lifestyle is going to get you really?
Keep in mind, I like nice things. I want to live in the best locations and drive a badass car. But if it never happened, I wouldn’t really give a shit. I know how to be happy on less.
Track Your Money
Most people don’t even want to look at their bank account because it’s too painful. And trust me when I say I get it. I’ve been broke and know how it feels.
You got to resist that urge as much as possible. You have to track your money and know how much is coming in / going out.
How else could you possibly make the right decisions?
Face your situation. It’s the only way out.
If you’re at a high level with money, than this is almost even more important. You’ve likely got so many different sources of income and money in separate places that you even forget about it.
For this person, you’ve got to get your tracking down. It’s the only way to get to an even higher level.
Seek Financial Wisdom
People just don’t want to pick up a book. I get it, it’s boring.
But unless you’re Gary Vaynerchuck, I wouldn’t bank on this strategy.
Learn. Don’t just read this review and think you’ve got it all. There’s tons of books on my blog about money and I’ll be putting out more in the future.
Who Will Love It
Those who are ready to start generating real, sustainable wealth
Why Does It Suck
This book uses a lot of old language for effect.
I get that it adds to the story, but I felt as if it just complicated the important parts of the book. I don’t want to be running a translator in my head for things that could have been said much simpler.
Further, I don’t feel like the story adds that much. It’s not interesting enough to make it that entertaining and just distracts at times.
Mild criticism. But something to consider.
Who Will Hate It
People who want “flashy” wealth.
The Wrap Up
Read this book is you want simple, powerful money advice. It’s conservative and isn’t going to encourage anyone to do anything crazy to get rich.
That’s all. Share this post with a friend if you think it helped you. And leave a comment with your biggest money challenge!