Before leaving my dad's house, my sisters and I were required to read several books and regurgitate the story, or the lessons in the book, to him. One of the books was George S. Clason's The Richest Man in Babylon. The book is educational and contains much good advice. It's a great book for young adults, or for anyone who hasn't taken an interest in personal finance before.
Clason didn't write this book as a book.
He stated writing his parables in 1926 and they were distributed by banks in pamphlet form. (I find it interesting he started during the roaring twenties and prohibition.) The most famous of these parables were later compiled into the book, The Richest Man in Babylon.
Each chapter in the book tells a parable set in ancient Babylon, around the time of King Nebuchadnezzar.
The stories teach you how to save, pay off debt, and attract gold. The fact that the stories take place in ancient times is irrelevant, because the message holds true for any period and probably any culture. When you read the book, which I recommend you do, or at least make your teenagers read it, remember that each chapter is a different parable from a different pamphlet. That's why the chapters don't flow well together, and why you don't see one or two characters throughout the entire book.
Chapters 1 and 2: The Man Who Desired Gold and The Richest Man in Babylon
Bansir, a chariot maker, pondered one day why he didn't have any money. He was a great chariot maker. His friend, a lyre player, asked him if he could borrow some money. Bansir said no, I don't have any. His friend then asked him why he was sitting around contemplating nothing when he was broke. Bansir told him he was pondering his financial situation. They remembered that they went to school with a fellow named Arkad.
Arkad grew up with the same financial standing as Bansir and Kobbi, but he was now reputed to be the richest man in Babylon. They asked his advice.
Arkad told them how he became wealthy, including how he started out, his first failures, and his first successes. The lessons that Arkad imparted to his friends were threefold.
1. Save at least 1/10th of any money you earn. 2. Invest your money wisely, so it may grow. 3. Invest the interest on your investments.
Chapter 3: Seven Cures for a Lean Purse
The King became aware that though the City was prosperous, the gold was in the hands of only a few men. He asked Arkad, the richest man in Babylon, to teach a class to 100 men, who would then teach others, on the ways to attract money. Arkad agreed and taught seven principles. Each day he taught one principle through a parable.
1. Start thy purse to fattening. (Save at least 1/10th of everything you earn.) 2. Control thy expenditures. (Live within your means. Don't spend in excess of 90% of what you make.) 3. Make your gold multiply. (Invest wisely.) 4. Guard thy treasure from loss. (Research your investments ahead of time. Don't be tempted by get rich quick schemes.) 5. Make of they dwelling a profitable investment. (Buy your own house and land instead of paying rent, but buy a house within your means.) 6. Insure a future income. (Do you want to work until the day you die? Or become a burden on your children when you can't work? Plan for your retirement.) 7. Increase thy ability to earn. (Study and learn what you can so you become wiser and can make better investments.)
Chapter 4: Meet the Goddess of Good Luck
Arkad, the Richest Man in Babylon, was hanging out at the learning center. All men could talk freely at the learning center, whether they were slaves or princes. The topic of conversation that night was luck. They discussed how gaming halls were always to the benefit of the house, and that most "luck" is actually just men of action taking advantage of opportunities. The chapter ends with "Men of action are favored by the Goddess of Good Luck."
Chapter 5: The Five Laws of Gold
Arkad, the Richest Man in Babylon, did not believe in the custom of having his oldest son live with him in preparations to take over Arkad's wealth. Many first sons who did this squandered the wealth and didn't make anything of themselves. So, when the son was of age, Arkad gave him a tablet with his five laws of gold inscribed on them and a bag full of gold. He told his son to take the tablets, the gold, and leave the City of Babylon. The son was to come back in ten years time and give an accounting of himself.
Ten years later his son did come back, with his wife and two children in tow, and told his story. After losing all his money, he had to start over. He only then read his father's tablets and put the laws of gold to use. The five laws of gold could be rewritten like this:
1. Save no less than 1/10th of your income. 2. Find ways for your gold to multiply. 3. Seek advice from wise men in the handling of your gold. 4. Don't invest in ventures you are not familiar with. 5. Don't get involved with get rich quick schemes. If the investment seems to good to be true, it probably is.
Chapter 6: The Gold Lender in Babylon
Rodan, a spear maker, was rewarded by the King for an incredible design for a spear head. The King gave Rodan 50 pieces of gold. After a few days with the money in his wallet, Rodan went to visit Mathon, a money lender. He sought Mathon's advice, and joined him for dinner.
Mathon taught Rodan that he needed to be cautious and not give his money away. Invest in sound investments. Rodan's sister wanted him to lend the money to her husband so he could be a merchant. Rodan's brother-in-law was not good with handling money, and after talking with Mathon, Rodan understood that it would not be wise for either Rodan, his sister, or brother-in-law to loan him the money.
Chapter 7: The Walls of Babylon
The Walls of Babylon were tall and strong and held off attackers for centuries. In this parable a guard calms many people as they come to him asking when the siege will end, will the wall hold, and how they would survive. The guard calmed the people.
The lesson of this chapter was to plan ahead and protect yourself.
Chapter 8: The Camel Trader of Babylon
A man, Dabasir, tells a tell of how he went from a slave to a rich man. The lesson in this story is "Where the determination is, a way can be found."
Chapter 9: The Clay Tablets from Babylon
A professor and his wife in modern times (the 1920s) translate and read ancient clay tablets from Babylon. They put the lessons to use and rid themselves of debt, and become financially better off, within two years. The tablets tell the story of Dabasir (from Chapter 8, the Camel Trader) and how he went from poor to rich.
Chapter 10: The Luckiest Man in Babylon
Sharra Nadu rode at the head of a caravan with Haden Gula, the grandson of his old partner and friend. Haden and his father squandered the deceased grandfather's wealth and blamed it on not knowing the secrets to attracting gold. In what is arguably the best chapter in the book, Sharra Nadu tells his story, and Haden's grandfather's story, to Haden. Haden learns that Sharra and his grandfather were slaves, that work is a good thing for all men to do, not just slaves, and how remarkable his grandfather really was.
Should I read this book?
Definitely. This book is entertaining just as a story. I'm going to read a chapter a night to my kids as bedtime stories, and I think I'll repeat this again every few years. This book will surely be on the list of things my children must accomplish before they leave home. My dad was wise.