The amazing money lessons from The Richest Man in Babylon by George S. Clason have up lifted the lives of those who practice these lessons.
These amazing lessons makes it one of the most read personal finance classic books. I have known about it since the early 2000s but I did not read it until 2010.
Before I read this book some areas of my financial live was stressed and I felt stuck. If your financial life is stressed or stuck, it is a must-read if you want the essential truths of financial prosperity.
It was originally published in 1926 to dispense financial advice through a series of parables set 8,000 years ago in ancient Babylon. Even to this day, the book is still well known because of its timeless simple principles on managing your money. This is why I have read it more than once and I suggest that you do the same.
These simple laws will not change now, nor will they 300 years from now. It’s a short read of only 144 pages. There is also an audio version available for your enjoyment.
Follow me down the path of some amazing money lessons.
The book tells a story set in Babylon during ancient times. It’s a parable (a simple story used to demonstrate a moral attitude). Basically, a young man with a family is struggling with his finances and is casually self-employed decides to asks a rich person to mentor him.
This wealthy man slowly teaches him the rules to wealth, which are timeless and that anyone can apply. He holds the young man accountable when he makes mistakes, but eventually the young man matures into a humble wealthy person.
Amazing Money Lessons:
Spend Less Than You Make. Save and Invest The Difference.
I must admit, I was doing this before I read the book. Nevertheless, in my opinion this is the most important lesson. Make this amazing money lesson the foundation of your money belief. All too often people openly admitted they don’t save and invest enough. They are running out of money before their next paycheck. This amazing money lesson is pretty straight forward. Don't you think?
Don’t Wish for a Lump Sum of Cash. Work to Achieve a Consistent Cash Flow Instead.
People wish that they get lucky and win a lottery because they are tired of the day to day work grind. I certainly understand the grind and the pain that accompany it.
However, many lottery winners go through their whole winnings within a year. As a result, their happiness levels go back down to zero. Oddly, they weren’t smart with their money or spend their money on valueless items.
Set a goal to work towards consistent income generation that constantly makes you more money.
You Will Lose Money If You Put It To Foolish Use
What this means is you will lose your shirt if you take too much risk with your money. If you buy into scammers, you will lose money. When you spend or use money based on your own inexperience or emotional urges, you will lose it. Many people have not learned this amazing money lesson.
Put Away 10% of your Earnings and You Won’t Even Notice the Difference in Quality of Living
Always pay yourself first. This means that before you spend any of your earnings, set aside 10% for savings. Your money is not truly yours to keep because you have needs and expenses like food, clothing and shelter.
Profoundly, if you save 10% you will not even notice the difference. Your standard of living will not change much if any. I was not able to start by saving 10% each pay period however I increased my percentage with each pay raise. Eventually, I was able to save more than 10% of each pay check.
Invest in Your Ability To Earn More
Reading this book is a wise investment in you. You should spend your time or money to improve your skills, knowledge, and ability to earn more money.
Most adults quit learning shortly after they finish school. They never read another book. Consequently, they do very little to improve themselves.
I read a book called “Enough” by the late John Bogle, founder and former CEO of the Vanguard Mutual Fund Group and this was one of his beliefs as well. Continue to read and learn. Lifelong learning gives you a huge advantage toward goal achievement.
Only Take Advice from People Skilled In that Field
Why? Because everyone loves to give advice, only take advice from people skilled in a field. An example would be listening to advice from a non investor about how to make money by investing.
What does a non investor know about investing? NOTHING! That’s why he does not invest. Find someone who has the experience, knowledge and willingness to mentor you.
You will Lose Money If You Let Greed Cloud Your Judgment
There is a difference between having big dreams versus letting your greed influence your decisions. A lot of wealthy people are conservative with their money.
They would rather build slowly versus rushing into an opportunity with risky promises. Be mindful when someone promises you something with absurdly good returns that seem too good to be true. It may not be a scam, but it often is.
People Who Take Action Get Luckier Because They Make Their Own Luck.
What the book is saying is that people who actually take what they learn and use it tend to be more “lucky”. I define luck as when preparation meets opportunity.
If you are doing everything you can to sway all your odds in your favor, when opportunity knocks you will appear lucky.
Who should read this book?
Friends wanting to save and invest at least 10% of what you earn.
If you think of every dollar you make as a magnet that works for you.
Someone desiring to stop living paycheck to paycheck.
Readers who enjoy reading about personal finance.
Lastly, if you still have doubts that something said ages ago still applies today. Read this.
Now that I have walked its walk personally, I can assure you that it’s true. It works!
Thanks for following along through these amazing money lessons.