Summary: The Richest Man in Babylon

The Richest Man in Babylon - George Clason
The basic principles of effective money management are: Save at least 10-percent of all that you earn for an investment fund for the future. Learn to live on 90-percent or less of your income. Invest your accumulated capital into projects that will provide a safe, steady income, taking full advantage of compounding of the interest received. Invest only in areas in which you have expertise or with people who are experienced. Buy the house in which you live so you don’t waste any money on rent. Have a realistic insurance program Always keep working at various ways and means of increasing your income.

Anyone who is struggling under the burden of debt lacks any ability to think rationally, and to accumulate wealth. It is much more productive to take positive action and get out of debt before embarking on any program to accumulate wealth.

People create their own luck by the level of work and commitment they put into a project.

Money represents success only through its ability to provide freedom to do things. It is not an end in and of itself – only a means to an end. The possession of sufficient amounts of capital makes possible the enjoyment of the very best services and goods the world has to offer.

‘‘A man’s wealth is not in the purse he carries. A fat purse quickly empties if there be no golden stream to refill it. Arkad has an income that constantly keeps his purse full, no matter how liberally he spends.’’ –Kobbi

The key principle at the very foundation of any program designed to generate wealth is at least one-tenth of all that a person earns is theirs to keep.

Anyone with a desire to accumulate wealth and put it to good use requires two things:

– Time. All men actually have this in abundance, but only a few put it to use making themselves wealthy. Instead of looking for constructive, useful ways to apply the resource of time, many people fill their lives with diverse activities which simply help them to pass the time.

– Study. There are two kinds of learning that are useful to anyone seeking to generate wealth – learning about specific subjects and learning how to find out what is not commonly known about any topic. Both kinds of learning are useful and valuable.


There are several basic principles which apply to the acquisition of wealth:

  • Live on less than you earn.
  • Seek advice from those who are competent to give it through their own experiences.
  • The accumulation of wealth moves forward much quicker when a person allows the effect of compound interest to work in their favour. Instead of frittering away the interest received on capital accumulated, put that interest out to work in other projects which have the potential to earn additional income.
  • The accumulation of wealth should be an exciting and adventurous project rather than a source of misery. Make the journey into an adventure and start enjoying that now,
  • Life is full of many good things which are worthwhile and good value for money. Don’t become so focused on saving that you miss out on all the good things there are to enjoy along the way.

‘‘Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed, the sooner the tree shall grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner you may bask in contentment beneath its shade.’’


  1. Start thy purse to fattening
  2. Control thy expenditure
  3. Make thy gold multiply
  4. Guard thy treasures from loss
  5. Make of thy dwelling a profitable investment
  6. Insure a future income
  7. Increase thy ability to earn

While it is highly satisfying to have a regular savings program, this is just the start of a wealth accumulation program. The trick is to put that gold out to work in other projects which will generate additional earnings. A key to any man’s wealth is the establishment of an ongoing income stream which can generate wealth irrespective of any other factors. In this regard, capital reserves accumulated through savings should be applied to other profitable projects.

The ideal characteristics of an investment are that the principal is safe, it can be reclaimed whenever required and it earns a fair rental.

THE FIVE LAWS OF GOLD The five laws of gold are the secrets of success which separate wealth builders from all others.

  1. Gold comes greadily in increasing amounts to any person who will save not less than one-tenth of their earnings to create an estate for the future well being of their family.
  2. Gold labours diligently for the person who wisely selects a profitable way to apply it.
  3. Gold clings to the possession of the cautious investor who seeks the advice of people with investment experience.
  4. Gold slips away from the person who invests in business fields which are unfamiliar or which are not used by those without experience in investments.
  5. Gold flees the person who forces it to try and generate impossible earnings or who follows the advice of tricksters or confidence men, or who trusts it to his own inexperience and romantic desires in investment.

THE GOLD LENDER OF BABYLON In the field of investment, it is far better to have a little prudent caution than to end up with nothing but regrets. Whenever a person starts to accumulate wealth, they will be beseiged by people who are anxious to use that money in their own endeavours. Out of the proverbial woodwork will come numerous projects and proposals, all with the common aim of separating the possessor from their capital. There are several things to avoid when considering any business proposals: Some of the most persistent people seeking funding usually are close family members. Most of these projects will turn out to have only a marginal chance of succeeding at best, and more likely most projects will have virtually no likelihood of success at all. Even worse, if you invest in a family member’s project that does not succeed, the borrower will resent you even more. It’s a no-win situation that should be avoided at all costs. The safest loans are made to people who have possessions far outweighing the value of the loan required. In this situation, the lender can act secure in the knowledge that other assets can be sold to repay the loan if required. People in the throes of great emotional upheavals rarely make good investment decisions. Avoid them. People who borrow for successful business projects tend to be absolutely prompt in their repayments. People who borrow to repay money lost through their indiscretions rarely make a habit of promptly making repayments. Merchants who have knowledge and experience in their field of trade make excellent credit risks. By financing the business activities of these merchants, wealth is generated for the entire city. Capital reserves have a way of slipping away from anyone unskilled in applying it wisely. Therefore, first seek security of the principal when evaluating any investment proposition. Next look for safe, dependable and steady ways to make the capital increase.

The person who spends freely and lives beyond his means sows the winds of needless self-indulgence from which he is sure to reap trouble and humiliation.

Anyone who is struggling under the burden of debt lacks any ability to think rationally, and to accumulate wealth. It is much more productive to take positive action and get out of debt before embarking on any program to accumulate wealth.

‘‘That man who keepeth in his purse both gold and silver that he need not spend is good to his family and loyal to his king. The man who hath but a few coppers in his purse is indifferent to his family and indifferent to his king. But the man who hath naught in his purse is unkind to his family and is disloyal to his king, for his own heart is bitter. Therefore, the man who wisheth to achieve must have coin that he may keep to jingle in his purse, that he have in his heart love for his family and loyalty to his king.’’ –Mathon

People who work hard tend to attract the company of other people who are also industrious. This, in turn, leads to other associations and creates other opportunities and business arrangements.