I recently finished reading the book Richest Man in Babylon, a book by George S Clason. There were some interesting parts in the book, and I thought it was a decent read for someone who isnt aware of their personal finances and struggles with it. I realize that there are plenty of folks out there who struggle with grasping the concept of saving and investing and fall into the traps of overspending their hard earned money. However, I just couldn’t figure out why this book is so popular and recommended by one and all. Don’t get me wrong, I thought there was some value in the concepts outlined, but anyone who spends a little bit of time thinking about personal finance can figure these concepts out and there are plenty of other resources available in these days, that can educate starters more easily. The book is also elaborate with quasi-repetitive stories, which I thought was unnecessary and could’ve been wrapped in less than half the pages dedicated to the stories.
Some of the takeaways that I liked and were central to the book were:
1. Save 10% of your income.
2. Each gold piece is a slave. Each copper that is born from that slave is another worker for you (compounding).
3. Bad investments are learning tools (the author shares a story where the protagonist buys rare jewels by getting an investment tip from a brickmaker). “Advice is one thing that is freely given away, but watch that you take only what is worth having.”
Three laws of successfully building wealth – learning how to acquire money, how to keep it, and how to use it.
Another point that stood out that I liked in the book was:
“Enjoy life while you are here. Do not overstrain or try to save too much. If one-tenth of all you earn is as much as you can comfortably keep, be content to keep this portion.”…”Life is good and life is rich with things worthwhile and things to enjoy.”
The words above resonated with me as I have seen some people overstrain themselves by cutting everything enjoyable out of life. To each their own, and yes frugality is important in saving and building wealth, but if one starts to cut corners in the important parts of life in order to save a buck or two, sooner or later regret will set in. In addition to the lost time when life should’ve been enjoyed, people start seeing decline in their health or other important aspects of life, which I think is crucial to keep in mind when we are on our journey to achieve financial independence.
Overall, I thought this book was average. While the fundamentals are basic, some of the stories are repetitive and simplistic. I envision that this book was written for teenagers (or adults who have no grasp of personal finance) to help them understand how to build wealth over time.
Have you read this book? Do you agree with my take on it? One way or another, leave a comment below and share your thoughts.