Quicklet on George Clason's The Richest Man in Babylon
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Quicklets: Your reading sidekick!
- About The Book
- About The Author
- Overall Summary
- Chapter-by-Chapter Summary and Analysis
- List of Characters
- Major Themes And Symbols
- Related Facts
ABOUT THE BOOK
The roaring ‘20s. America was in the throws of its post-war boom years. Men and women alike convened in local speak-easys where the Volstead Act couldn’t touch them to drink, dance, laugh, and listen to all the latest and greatest Swing.
It wasn’t all fun and games during this decade of personal freedom and financial prosperity. President Harding’s “return to normalcy” more or less began a period of isolationism in the US. The Senate failed to pass the Treaty of Versailles and the US did not join the newly created League of Nations. The fear of communism began to take root during this time, even before the USSR grew into the powerhouse it was after World War II. The KKK saw a resurgence in the 1920s as well, peaking mid-decade at around 4 million members.
While America saw unbridled growth, Europe began to fall into depression. Europe saw a staggering drop in employment with 5 million people without jobs, 2 million of those in Germany alone.
1926 was a particularly poignant. A rising star from Columbia University by the name of Lou Gehrig replaced Wally Pipp as the Yankees’ first-baseman, and future entertainers/artists Marilyn Monroe and Miles Davis were born. The 40-hour work week was first announced by Henry Ford, and NBC first hit the radio waves. Even as the rubble of WWI was being removed, the foundation for WWII began to build as Hirohito is crowned Emperor of Japan and Mussolini rises to power in Italy.
It’s also the year that George S. Clason wrote what is regarded as one of the finest sources on personal finance ever written: The Richest Man In Babylon. The book describes several simple rules to the reader through parables set in the ancient, wealthy city of Babylon.
Originally, Clason wrote several pamphlets regarding the making and saving of money. Due to their entertaining, simple nature, the pamphlets were widely accepted by the public and used by banks and financial institutions to inform clients in regards to personal finances. The Richest Man In Babylon is a collection of the most popular parables of that time.
EXCERPT FROM THE BOOK
The Man Who Desired Gold
Bansir, the chariot builder, sat dejectedly on a low wall outside his house. As he surveys his modest property, his wife pops out now and again giving him a disapproving “you should be working” look. As his glance moves to the hustle and bustle of the surrounding city, his friend Kobbi the musician walks up. Noticing Bansir is sitting around instead of working, Kobbi assumes things are going well for Bansir and asks to borrow two shekels for the Nobleman’s Feast. Bansir explains that he doesn’t have two shekels to lend, not even to his best friend. Kobbi asks why, if Bansir is in such dire straights, he isn’t working on the half-completed chariot in his workshop. Bansir replies that it’s due to a dream he had had the previous night. In the dream, he had all the money he could want, he was able to give freely to the poor and purchase all his heart desired. Upon waking, he came back to the realization that he had no money at all, and had been sitting glumly on the wall ever since. Bansir goes on to explain that both he and Kobbi had worked hard their entire lives, and made a decent amount of money over the span of years, and yet at this point had little to show for it. How, then, could two educated men have worked so hard yet attained so little?
Kobbi sympathizes with Bansir’s situation. He, too, has worked hard his whoe life playing his lyre and has very little to show for it. Kobbi mentions that he passed their mutual friend, Arkad, in the streets earlier that day. Remarking on the fact that his purse never empties, Bansir has an epiphany. It’s not just a sum of gold that he desires, but ever flowing source: income. Not just any income, but an income that will continue to accumulate regardless of whether or not he is working or traveling. This time, the epiphany is Kobbi’s. He realizes that the reason neither of them are wealthy is because they never sought it. They decide that, since they both knew Arkad, they would go to him and ask him to teach them his methods on accruing wealth.
The first of many lessons is conveyed in the dialogue between Kobbi and Bansir. Simply making money and attaining wealth are two different things. If making money is your desire, and you put forth all your effort to do so, that is what you will do. However, if a passive income is desired, money that makes itself and continues to accumulate in your purse (or accounts), then that is what you must pursue.
The Richest Man In Babylon
Arkad was a famous man in Babylon. Famous not only for his wealth, but for his generosity. Kobbi and Bansir studied under the same teachers as Arkad in their youth. All three of them seemed to be relatively equal in both mind and body, yet Arkad attained far more money and success than the other two. Curious as to why this was so, Kobbi and Bansir approach Arkad and ask him. In reply, Arkad states that both Kobbi and Bansir have “either failed to learn the laws that govern the building of wealth, or you do not observe them.”
Arkad explains that when he was younger, he looked around and noticed all the fine things that wealth could provide and decided that he wanted this for himself. Being from a relatively modest family with several brothers and sisters, Arkad knew that there was no real chance at an inheritance. The first thing he had to do was to educate himself in the attainment of wealth. He then tells Kobbi and Bansir the tale of how he was able to learn these things, and how they, too can learn.
When Arkad was young, he found work as a scribe. He toiled night and day, etching into clay tablets various things for his customers. He worked very hard, and yet like Kobbi and Bansir, he had little to show for it. One day Algamish, the money lender, came in and needed a copy of the Ninth Law in two days. He said he would pay two coppers for it if it were finished within the time frame. Arkad failed to meet the deadline and the money lender grew angry. Arkad made a deal with the money lender that if he were able to finish the tablet by the next morning, the money lender would teach him how he could also become rich. The money lender agreed and by morning the tablet was finished.
The money lender then told Arkad that he learned the secret to being wealthy when he learned that a part of all he earned was his to keep. Confused, Arkad asks, “Is not all the money I make mine to keep?” The money lender explains that the money Arkad makes is spent on things like food, sandals and clothing; thus he is working for others, not himself. He goes on to tell Arkad that every piece of gold he saves should be used to make more gold, and the gold after that, and so on. To begin, Arkad was to save one-tenth of all he made and use that to pay himself.
One year later, the money lender returns and asks Arkad if he had taken his advice. Arkad replies that he saved one-tenth of all he earned for a year, and gave it to the brickmaker who was going to use it to purchase jewels cheaply from the Phoenicians which could in turn be sold for a profit in Babylon. Angered, the money lender explains to Arkad that he made a foolish mistake. Why would he trust a brickmaker to be able to purchase jewels? Why not ask a jeweler who’s business it is to deal in such things? The money lender is proven correct when the brickmaker returns with useless baubles, having been swindled in Phoenicia.
Another year later, the money lender returns and asks Arkad about his progress. This time, Arkad explains that he purchased bronze for a shield maker, and that every four months he is paid a dividend on his investment. Upon being paid, Arkad treats himself to a fine feast. Once again, the money lender laughs at Arkad, exclaiming that he is “eating the children of his savings.” The money lender explains that the money made from Arkad’s initial investment should in turn be invested, and the money after that, and so on. That way, he will eventually reach a point where he can feast as much as he wants and it won’t hurt is income at all.
Algamish the money lender returned to Arkad one last time two years later. He asks Arkad about his business ventures, and Arkad replies that he is not yet making the money he desires, but his investment is making money, and it’s children, and it’s children’s children. Pleased with Arkad’s progress and grasp of the concept, Algamish the money lender makes Arkad his partner in his estate.
Three more important concepts on attaining wealth are outlined here. One is the concept of living below your means. If you spend what you make, you will constantly be living from paycheck to paycheck, with little to show for your hard work than the materials you possess. By saving one tenth of your income, it forces you to live a little below your means. There may be a few luxuries you have to do without, but in the long run saving money is the beginning of accruing wealth.
The second important concept is investment. Simply saving money is great, but not enough if you want to be wealthy. Invest that money and earn even more money from it. That money you invested will continue to earn you money regardless of what you’re doing. This is what’s known as passive income.
Lastly, saving and investing are pointless unless you invest wisely. When Arkad gave his money to the brickmaker to buy jewels, he was investing foolishly because brickmakers typically are not experts on jewels. He was rightfully rewarded with failure for this mistake. The second time around, he invested his money with someone who knew how to use it: the shield maker. The shield maker was able to purchase good bronze with Arkad’s money and make it into shields which could then be sold at a higher price. Unwise investments are as good as throwing your money away.
Seven Cures For A Lean Purse
King Sargon returns to Babylon victorious from his campaign against the Elamites. His Chancellor comes to him stating that after all of his previous work building canals and temples, somehow the people are unable to support themselves. Most of the money is in the hands of very few men in the city and as a result, the shops are suffering and laborers are going unpaid.
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