“If you wish to be wealthy, study wealth.” – John Earl Shoaff
If you’ve been following us for a while, you might have noticed that we keep recommending George S. Clason’s The Richest Man in Babylon when it comes to not just improving your financial health but actually getting and staying rich.
Because it’s one of our favourite books and was a real game changer for us, we decided to publish our lessons learned from The Richest Man in Babylon (the original 1920s version).
This is one of those books that you need to keep reading, even after you’ve finished it once or twice.
There’s always something new to learn, despite the fact that it’s a mere 146 pages.
Are you ready?
Let’s dive in!
Why read The Richest Man in Babylon
This same book comes highly recommended by a variety of personal development superstars and wildly successful people like Jim Rohn and Tony Robbins.
And when you want to be rich, successful and live a blissful life, you have to listen when someone who is already rich, successful and live a blissful life is talking.
Especially, when they point to something and say categorically that this something changed their lives.
In fact, according to Jim Rohn, The Richest Man In Babylon impacted his life so much that he has recommended it in practically every single seminar he’s ever held.
And he offered seminars for over 40 years – with a total audience of approximately 4 million people across the world.
That’s a powerful recommendation!
And it’s no wonder because The Richest Man in Babylon is a financial classic. It will tell you exactly how to get rich and actually STAY rich.
Side Note: The summary below will give you the key points to the secrets contained within the book with commentary from yours truly. However, for maximum impact, you need to read the book yourself so you can draw your own conclusions.
Also, there is no other work
Ever heard of the phrase, “Pay Yourself First“?
This is where it comes from.
So, if you want to stop living paycheck to paycheck, if you want to never again experience financial stress, if you want to be wealthy beyond your wildest imaginings so that you can start doing the things you want to do not just for yourself but for your family, read this summary and then get yourself a copy of this book.
Read it. Listen to it.
Whatever format you choose doesn’t really matter.
What matters is you start gaining the knowledge contained within its pages. And start taking massive action.
What is The Richest Man In Babylon about?
The book is
The most popular of these parables is called The Richest Man in Babylon. Hence, the book title.
The richest man talks to his friends, his king
He talks about how money is abundant and that it flows quite freely towards the person who knows how to harness it.
And that we all have the capacity to harness it so long as we have the knowledge necessary to do it well.
Fascinating stuff, isn’t it?
Who was the richest man in Babylon?
The richest man in Babylon was Arkad.
And who was Arkad?
Arkad, despite his unrivalled wealth in the parables, was actually born poor.
The son of a humble merchant from a large family, he had no chance of ever inheriting anything substantial.
He had no superior wisdom or powers.
What did he have that allowed him to move from poverty to wealth?
This question will be answered in the following sections but suffice it to say that one of the things which really distinguished him was his keen eyes, which allowed him to see that being wealthy grants a person a lot of power.
More importantly, he knew what he wanted. He wanted to be rich because of all the good things wealth can do.
You already know that being wealthy is a very good state to be?
Well, honestly? I’m not so sure.
Every day, we’re inundated with images that show rich people in a negative light.
We see the rich taking advantage of the poor.
We’re told that they’re evading tax or outsourcing to a different country and therefore, are causing job loss and unemployment.
They’re filthy (as in filthy rich).
They’re evil (because isn’t money the root of all evil?).
They’re in a world of their own, far removed from the suffering most of us have to endure (as per the Credit Suisse Research Institute, the top 1 per cent of adults account for more than 47 per cent of household wealth globally).
So, maybe consciously, you know that you want to get rich but you’d never dream of saying it seriously.
Subconsciously, your mind is probably wondering why you’d want to get rich when it’s so clearly a bad thing to be. Why would you want to be filthy, evil and reviled by majority of the population?
That’s why, we need to look at what Arkad saw that made him decide that wealth is
Why did Arkad want to get rich?
Side Note: We’ll be paraphrasing here because the book was written to match the setting, which was ancient Babylon.
So, of course, it’s very archaic and difficult or annoying to read (unless you love history and reading
Anyway, Arkad as a young man proved to be very perceptive.
He looked around him and noticed that there were many things in life that helped people find happiness and contentment.
He also noticed that wealth tended to increase the potency of these things, making wealth or money a power to be desired.
And he concluded that he wanted this for himself.
So, why did Arkad want to get rich?
Simply put, he wanted to enjoy the power that wealth grants the wealthy.
What did he mean exactly?
How does money have power?
Well, with money, you can afford to:
✦ furnish your home tastefully with the best furniture and appliances.
✦ travel to different countries.
✦ try different cuisines, no matter how rare or expensive.
✦ buy truly valuable
✦ donate to causes you think are important.
✦ do all five above plus others that can “delight the senses” as well as nourish the soul.
Now, knowing all these, wouldn’t you want to be wealthy and powerful too?
Lessons learned from The Richest Man In Babylon
We’re now going to dive deep into the major lessons learned from The Richest Man in Babylon.
This section will span a few different parables and despite the short length of the book, is going to be intense going.
If you could truly grasp the many lessons The Richest Man In Babylon can give you, your income will change drastically.
So, hunker down and take good notes because the words in this particular section has changed the life of many. And I hope it will change yours too.
Side Note: If you love history or the way classical texts are written, I apologise in advance. I’ve modernised the language a bit to make it easier to understand. I know…cringe, right?
The Richest Man In Babylon
This section will focus on the main parable in the book, after which the whole book is called.
The parable of the richest man in Babylon will introduce Arkad, why he wanted to be wealthy and give you the real deal behind his rags-to-riches story.
It will also give you the cornerstone of making, building and keeping wealth.
Lesson 1: You need to know the principles of wealth building.
According to Arkad, there are only two major reasons why you’re not wealthy: Either you’ve not learned the principles of building wealth OR you’ve not observed them.
In other words, if you do not have your financial affairs in order, you don’t know where all your money is going or you’re living paycheck to paycheck, you can now stop wondering why this is happening to you.
The reason is simple: You don’t have a clear strategy for financial success because you don’t know what to do.
You may say that you want to be a millionaire and maybe, logically, that really is what you want. But if you don’t actually know what you’re doing, you can’t take strategic action.
And if you can’t take strategic action, you’ll be making hesitant financial decisions all day every day.
If you make any decisions at all, that is.
Lack of information often means we either make the wrong decision or we freeze because the fear of making a mistake can be paralysing.
Both means the likelihood of you getting rich – and staying rich – is greatly diminished.
Forget about relying on sudden windfalls like winning the lottery or receiving an unknown inheritance.
The chances of that happening for many of us is tiny.
In fact, you only have a 1 in 175 million chance of winning the lottery.
And what are the odds of you inheriting something you didn’t know anything about? Probably even less than 1 in 175 million.
Besides, that doesn’t matter anyway because even in the highly unlikely event that you did win the lottery or you did get an inheritance, if you do not have a strong foundation on wealth building, you’ll very likely end up right back where you started.
Jim Rohn said it best (see the first minute in the seminar below), “I have found in my experience that income does not far exceed personal development. Now, sometimes, income takes a lucky jump but sure enough, unless you grow out where it is, it’ll usually come back where you are.
Life has strange ways.
If somebody hands you a million dollars, best you become a millionaire quickly so you get to keep the money.
Otherwise, sure enough, it will disappear.”
Lesson Two: Wealth is power.
We’ve already written down some of the good things you can do with wealth so all we need to emphasise here now is that Arkad saw and articulated what we all see but do not seem to wish to accept: Whilst it is true that money cannot buy happiness, it can increase the potency of all the good things that can bring happiness and contentment.
A relationship exists between income (AKA source of wealth) and happiness, although no one really knows yet exactly what that relationship is.
A 2018 study has even come up with an ideal number: $60,000 to $75,000 per year for emotional well-being and $95,000 for lifelong evaluation.
It is, therefore, very important that we keep in mind that wealth is like a gun, or a knife or a computer or anything else.
None of them is inherently evil.
They’re all just tools.
It is the people who use them that determine what their effects are going to be.
So, don’t be afraid to make financial success a goal.
It’s a worthy goal.
Until recently, I thought wanting to be a millionaire would mean I’m materialistic and I couldn’t reconcile my desire to serve selflessly with my desire to advance financially.
It turns out that they’re simply two sides of the same coin.
One is not inherently better than the other.
Now that I’m wiser, I realise that you can serve with your time or you can serve with your money, that both are important and when used correctly, can bring the highest good to everyone concerned.
Lesson Three: To get what you want, you need time and study.
Even if your parents are wealthy or you suddenly win the lottery or inherit a substantial amount, you will still need to devote both time and study to create and keep your wealth.
These two are essential ingredients to anything you wish to do and they’re as important in improving your finances as they are in improving your happiness.
Rich or poor, we all enjoy 24 hours a day, 7 days a week, 52 weeks a year.
So, this requirement is a given. We all meet it because we can’t actually do anything about it.
What we do with that time – that is what makes the difference. So, if you’re not yet rich but you want to be, examine how you spend your time and you’ll find out why you’re not where you want to be.
This is almost inextricably bound with Lesson One.
If you’re not where you want to be and you don’t know how to get there, then obviously you need to learn.
And to learn anything, you need to study.
Studying, according to Arkad, means one of two things. The first kind refers to the the things we already know. The second is the training that teaches us how to find out what we don’t know.
In other words, if you want to be rich but don’t know how, then study it.
Learn how to be rich. Discover the principles of building wealth and act on the information once you get it.
This book is a great start.
But it’s only a start.
To get and keep what you want, you also need lesson four.
How To Get More Free Time – Written specifically for multitasking, creative free spirits like myself, this post will give you 3 actionable tips you need to get more free time.
Plus: A list of 4 personal time management systems that will help you accomplish your tasks in as little time as possible – resulting in more free time for all the other things you want to do. 🙂
How To Time Track – Learn how to time track effectively in four easy steps. This is basic step of time management that most people forget.
Time tracking helps you learn where your time is going and how much time it actually takes you to get things done (no more guesswork!).
Plus: A bonus list of all the tools you need to time track effectively.
How To Time Block – A step-by-step guide that will help you effectively time block and get the most from your daily schedule.
Lesson Four: To get and keep what you want, you need to act.
When he was still a young and humble scribe, Arkad had the opportunity to meet with a very wealthy money lender and property owner named Algamish. Algamish was direct, insightful and most importantly, he admired courage.
When Arkad took the opportunity to learn from Algamish, to ask that he be given the secret to creating and keeping wealth, he started a train of events that led to him being Algamish’s student and eventually, his partner.
Arkad was slightly intimidated when he first met Algamish but not afraid. He struck a deal and said that if Algamish tells him how he can also be rich, he would complete the businessman’s request (which was a copy of a certain law carved upon two clay tablets in less than 24 hours – apparently a difficult task to even the best of scribes).
Impressed by his courage as well as his persistence, Algamish gave his word.
And what did Arkad do?
He met his end of the bargain despite the tight deadline.
He kept working well into the early hours of the morning.
It didn’t matter that he was exhausted or that his back began to hurt or that his eyes began to water or his head began to ache.
He worked until his work was complete.
And as a reward, he received the information he required: the secret principle to building wealth.
So, this is what you need to do to get what you want: You need to invest your time wisely in making sure you get the knowledge you need. And then act.
Grab the opportunity when it comes.
Be bold and decisive.
Just do it.
Lesson Five: Pay yourself first.
So, what was the secret principle that Arkad learned?
Algamish told Arkad that “I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.“
And this secret principle is as valid now as it was thousands of years ago.
Of course, just like many of us, Arkad found Algamish’s advice cryptic to say the least.
Those of us who work earn a salary that usually goes directly from our employer’s bank to ours, with a percentage deducted for tax and pension.
So, don’t we all automatically, keep what we earn?
Algamish was very blunt when he disproved this statement.
“Fool,” he said, “you pay to everyone but yourself…you labor for others. As well be a slave and work for what your master gives you to eat and wear.“
And it’s true. What with our expenses and maintenance payments like food, water, utilities, transport etc., we hardly keep any of our money.
In fact, we’re lucky if we have any left by the time next payday comes.
Why is this problematic?
Aside from the fact that this means, most of us are living a hand-to-mouth existence (which gives us no wiggle room for those rainy days), this kind of thinking usually means we’ll be stuck in this kind of situation indefinitely.
See, this is what happens.
Most of us wait don’t set aside any money for ourselves until the end of the month.
If there’s any left by then (and that’s pretty big if), we either spend it as soon as we receive the next salary or sometimes, we keep it for a rainy day.
Because this is usually a minuscule amount, when that rainy day comes, we end up spending everything we’ve saved up – and then some.
Sadly, rainy day means different things to different people. Sometimes, we even think our desire to get that new plasma TV falls under the rainy day category and so spend our money needlessly.
According to Algamish, we should set aside a portion of our money that is ours to use for investment only (nothing else) so that our money starts earning wealth. This portion should be at least 10% of all income that we receive – and no less.
This is the seed of our wealth tree. Because wealth, like a tree, grows from a tiny seed.
Lesson Six: Be a good student.
Even though a year passed before they met again ( in other words, no one was micromanaging him), Arkad followed Algamish’s advice conscientiously.
He kept saving 10% of his income without fail.
Over the course of four years, Algamish would come back three more times to check on Arkad’s progress and help him – correcting him when he made mistakes and praising him when he did well.
Arkad listened well and followed his mentor.
By the fourth year of their acquaintance, Algamish invited him to be a full partner.
When Algamish died, he chose Arkad to be his heir.
In other words, when you truly want to learn something, find a master who can teach you.
Then, be a good student.
Listen well. As the Chinese saying goes, empty your cup.
Use your mind.
Act on your newfound knowledge.
There is always something new to discover.
And this is why learning should never end.
Lesson Seven: Be persistent.
As we mentioned above, Arkad made mistakes with his money.
The first year he managed to save 10% of his monthly income, he made a foolish investment decision.
He gave all of the money he’d saved to a brickmaker named Azmur, who was travelling to Tyre.
The plan was for Arkad to invest his money, Azmur was to buy rare jewels from Phoenician traders. And the two of them would then sell these jewels in Babylon for a profit.
It seemed like a brilliant plan.
Why should it fail?
Unfortunately, Algamish knew as soon as he found out about it that this would be a failed venture for one simple reason: Neither Azmur nor Arkad had any knowledge about jewels.
They wouldn’t know a rare and valuable jewel if they were holding it in their palms.
“Why trust the knowledge of a brickmaker about jewels,” he asked. “Would you go to the breadmaker to inquire about the stars? No, by my tunic you would go to the astrologer, if you had power to think. Your savings are gone…but plant another. Try again. And next time if you would have advice about jewels, go to the jewel merchant.”
This is a very important piece of advice that we should all remember. Everyone has opinions about everything. It is our job to discover which is true and which is false. If we need advice, we go to a master who was a wealth of expertise in the matter.
When Shoaff said his famous words, “if you want to be wealthy, study wealth,” he didn’t mean ask the first person you meet on the street. You must be meticulous. Go to the masters of wealth – people who have been wildly successful in their chosen fields (the fields you wish to be successful in) and look to them for guidance.
A year after that failed investment decision, Algamish came by again to check how Arkad was doing.
He was doing relatively well.
Undaunted by his previous failure, he went and made another, more calculated investment. This time, he harnessed his knowledge of metallurgy and invested in the shield making business.
Algamish was suitably impressed until he found out that Arkad was going on a spending spree using the profit from his investment. He laughed and admonished Arkad for his extravagance.
Profit, according to Algamish, is supposed to earn even more profit until such time that you have enough money to support the lifestyle you desire.
In other words, the 10% that you set aside is only to be used for investments and building your passive income streams.
The only time you would spend this money is once you become financially free (ie you have enough money to sustain your chosen lifestyle without you having to work).
And even then you would only spend the returns on your investment.
Never spend the principal.
Lesson Eight: Be disciplined.
You will meet so many temptations on the road to financial freedom.
If you’re not vigilant, you can easily be swayed to disregard your budget once in a while, set aside less than 10% of your income or don’t bother with due diligence and just invest your money in a get-rich-quick scheme.
Making mistakes is normal.
But if you want to get rich, giving up is simply not an option.
Just like Arkad, you need to keep going, keep learning and keep picking yourself up every time you make a mistake.
Lesson Nine: Create your own luck.
As soon as Arkad finished telling his story, his success was unintentionally diminished by one of his friends who told him that he was lucky because Algamish made him his heir.
Arkad immediately refuted this by saying that he was only lucky because he was ready for the opportunity that came.
Although he had no idea that Algamish would make him his heir when they first met, Arkad made sure he was ready.
He was a good and conscientious student who never gave up.
He was consistent and showed Algamish how much he valued his advice.
Arkad showed time and again that he could be trusted with money.
Was it any surprise that when the time came for Algamish to choose his heir, he chose Arkad over his own spendthrift son?
Lesson Ten: Commit.
When one of Arkad’s friends commended him for his unusually strong will power, he scoffed and said, “Will power! What nonsense…will power is but the unflinching purpose to carry a task you set for yourself to fulfilment.“
What exactly did he mean?
Simple, if you say you’ll do something, you’ll do it.
When you set out to accomplish a particular goal, you don’t stop until you achieve it.
So, if you’ve decided to be a millionaire by 2021, then you don’t stop until you’re a millionaire by 2021.
Jim Rohn talked about the importance of resolve (which is a synonym of will power) in one of his seminars.
Resolve is simply you promising to yourself that you will never give up, that “you’ll read the books until your skills change; you’ll go to seminars until you get a handle on what they’re teaching; you’ll practice until you develop the skills.”
What would you do to achieve what you want most?
How much time would you give yourself?
Do you set a goal half-heartedly?
Are you always thinking of a way out, an escape plan, if you should fail?
Getting rich – just like anything worth doing – requires that you make a commitment to keep going until you achieve it.
Arkad talked about will power. Jim Rohn talked about resolve.
They are both essentially the same thing.
Lesson Eleven: Wealth is infinite.
One of the great myths we have floating around is that wealth (AKA money) is somehow scarce. That if someone already has it, it’s gone completely and you can’t
We say there isn’t enough to go around. In other words, we’re poor because the rich have all the money.
According to Arkad, “wealth grows wherever man exert energy.” He gives, as an example, a rich man who is building a palace. What happens to the money he spends to build it? Is it gone after he pays for it?
No, of course not.
It goes to the suppliers who provide the building materials, the labourers who actually build the palace, the architects, the engineers, everyone else who has a say in the project (yes, even the government). Wealth spreads around instead of staying in one place and stagnating.
Lynne Twist of Soul of Money
She identifies three core myths that keep us locked in this economy:
There’s not enough to go around – which means that if I make it, you probably won’t. And if we both make it, then someone else won’t.
More is better – which fuels a competitive culture of accumulation, acquisition, and greed. This culture, in turn, fuels most of the violence, corruption and wars that we have ever had.
- That’s just the way it is (and there’s no way out) – In other words, when people believe that there’s not enough to go around, that more is definitely better, and the people who have more are always people who are other than us, then we are forever fighting each other in competition for the finite resources that we all want.
Lesson Twelve: Take immediate action.
Earlier we touched upon the importance of action.
But what we didn’t mention is the importance of taking immediate action.
When you decide to become a millionaire, act as soon as you make the decision.
Start reading that important book, talking to that important person, attending that important seminar.
Don’t wait until the Law of Diminishing Intent washes away all your good intentions.
Or you’ll find yourself old and grey with nothing to show for it.
In fact, one of the things that Arkad’s friends were worried about was that they were already old and were nowhere near rich.
Arkad encouraged them to take immediate action and do the following:
- Use Algamish’s words as an affirmation, “‘A part of all I earn is mine to keep.’ Say it in the morning when you first arise. Say it at noon. Say it at night. Say it each hour of every day. Say it to yourself until the words stand out like letters of fire across the sky.”
- Set aside the first 10% of your income as yours alone. Arrange the rest of your expenses to make sure that this happens.
- Study the best way to make this growing sum of money work for you. Should you bank it? Invest in stocks and bonds? Real estate? Angel investing? There are many options and not all will work for you but for you to be successful, you need to figure out what will.
Lesson Thirteen: Get insurance.
Once you’ve done all of the above, you need to invest in your pension as well as life insurance.
The first is important because when you grow old and are no longer able to work, you still need a way to support yourself so you do not become a burden to your family.
The second is important so that IF something happens to you, your family won’t need to worry about money because they’d be insured.
There are now many insurance options available to you.
Kevin, for example, is a member of NEST and part of his salary is automatically diverted to his retirement pot before getting transferred to his bank account.
His company also provides life insurance so that his beneficiaries won’t need to worry about money if something should happen to him.
Lesson Fourteen: Find your people.
Finally, never underestimate the power of social influence.
It is a lot stronger and more insidious than you think.
This is where most people seem to falter.
We want to be rich, so we ask our best friend (who is always broke), our parents (who scrimp and save and don’t seem to be enjoying life), our sibling (who is always borrowing money), our cousin (who never seems to be able to keep a job), etc…
Arkad said, “counsel with wise men. Seek the advice of men whose daily work is handling money.”
In other words, ask money advice from money experts and not from friends and family who are in the same boat as you.
Find your people and support each other.
Lesson 15: Enjoy life.
Finally, enjoy life.
You’re only alive once.
Do not overstrain or try to save too much in an effort to accelerate your way to riches. If you can only spare 10% of your income because you have debts to pay, then spare 10% and spend the rest.
Don’t be a miser.
“Life is good,” Arkad said, “and life is rich with things worthwhile and things to enjoy.“
Should I read The Richest Man In Babylon when you’ve just provided a summary?
YES. This is a go get the book now kind of YES.
What we’ve summarised above is only ONE parable consisting of 9 pages. That’s just a fraction of the lessons condensed in these stories. If you are serious about getting out of your financial slump, this should be your first stop.
Don’t know where to get it? Start with your library. If you’re in the US, chances are great that they’ll have it in the business and finance section.
Not in the US? Probably won’t be in the library, unfortunately.
But, you can check out the charity shops and see if a copy is lurking there.
Alternatively, you can read The Richest Man In Babylon online FREE.
Now, you have access to all possible versions of the book that exist, one is even free.
Remember Jim Rohn’s words: Free is easy to do. It’s also easy not to do.
Which easy are you going to choose?
Only one will change your life for the better. So, make sure you choose that one. 🙂