The Richest Man in Babylon

January 20th, 2015

The Richest Man in Babylon by George S. Clason front cover

The Richest Man in Babylon tells the story of the eponymous Arkad. Working as a scribe, Arkad carved for Algamish, a rich local money lender, the laws of the land on a clay tablet. In exchange, Algamish would eventually teach Arkad to pay himself first, save as much as possible, make his money work for him, and be critical of whom to lean on for guidance.

Babylon was not located in some tropical paradise with vast deposits of natural resources from forests or mines. It did have fertile soil, and its location beside the Euphrates River brought immediate access to water. The Babylonians built an intricate system of irrigation canals to bring water to the soil, a prime factor in the city's rise in wealth that ensured plentiful crops.

Still, there existed a great divide between the haves and the have-nots. Only a few citizens had become rich from the building of the canals as well as temples to the Gods. Luckily, the king was fair and just, and he wanted everyone in Babylon to have their share of the wealth.

He solicited the advice of Arkad. The king knew of Arkad's reputation as the richest man in Babylon, so over a period of seven days, Arkad would teach 100 men about money management. These men would then spread Arkad's teachings, dubbed the Seven Cures for a Lean Purse, among their families and acquaintances. The Seven Cures were as follows:

  1. Start thy purse to fattening.
    Save a tenth of what you earn.
    Which desirest thou the most? Is it the gratification of thy desires of each day, a jewel, a bit of finery, better raiment, more food; things quickly gone and forgotten? Or is it substantial belongings, gold, lands, herds, merchandise, income-bringing investments? The coins thou takest from thy purse bring the first. The coins thou leavest within it will bring the latter.
  2. Control thy expenditures.
    Make a budget separating your needs from your desires, but do not touch the 10 percent you save.
  3. Make thy gold multiply.
    Exploit the powers of compound interest.
  4. Guard thy treasures from loss.
    Perform due diligence; never hand over your money to people who aren't capable. Seek out solutions where your principal is safe, where it's easy to withdraw your money if needed, and where you can expect a fair return.
  5. Make of the dwelling a profitable investment.
    Owning your own home brings peace of mind and richness of soul.
  6. Insure a future income.
    Set yourself up for retirement, and secure your family's well-being when you pass on.
    In my mind rests a belief that some day wise-thinking men will devise a plan to insure against death whereby many men pay in but a trifling sum regularly, the aggregate making a handsome sum for the family of each member who passeth to the beyond. This do I see as something desirable and which I could highly recommend. But today it is not possible because it must reach beyond the life of any man or any partnership to operate. It must be as stable as the king's throne. Some day do I feel that such a plan shall come to pass and be a great blessing to many men, because even the first small payment will make available a snug fortune for the family of a member should he pass on.
  7. Increase thy ability to earn.
    Wealth is built in steps. Set earning your first five gold pieces as your first goal, then ten, then twenty, and so on.

Arkad would also teach his son, Nomasir, the intricacies of money management. Before Nomasir could inherit his father's estate, he was to go on a ten-year journey with a bag of gold and a clay tablet into which were carved the Five Laws of Gold.

Nomasir set forth, and proceeded to lose his gold getting swindled and joining failed business ventures. He then consulted the Five Laws of Gold, which echoed many of his father's Seven Cures for a Lean Purse. It's unclear what compelled Nomasir to throw his money away before turning to the tablet for guidance, but he did return with more riches than he left with, so I suppose it all turned out alright in the end.

Clason's Babylonian parables actually started as a series of pamphlets distributed through banks and insurance companies. The book is a collection of these pamphlets, which would explain why the eponymous Arkad in several chapters is reintroduced as if previously unmentioned.

Arkad isn't the star of, or indeed mentioned in, all the chapters, many of which set out to convey a specific message. One is about seizing the opportunities and the dangers of procrastination. Another concerns protecting your money to keep it safe in dire times. There's a story about how unflinching continuous determination will help you repay your debts and regain the respect of your peers, and one about why considering work your best friend will help you achieve greatness.

Another contains useful advice regarding the distinction between a good and a bad loaner:

  • The safest loans are to those whose possessions are worth more than the amount they wish to borrow.
  • Those who have the capacity to earn are also safer loaners.
  • hose who borrow for purposes that bring them money are likely to pay you back, whereas those who borrow because of their indiscretions are less so.
  • Those undergoing great emotional stress are unsafe loaners.

While new characters and concepts are introduced throughout, there is some repetition in the messages the stories convey — probably another side effect of the stories having been originally distributed separately.

You may conclude that much of this is basic advice that could be cooked down to a couple of blog posts, but the beauty is in the presentation. Instead of reading like a manual, all of it is told as conversations and stories handed down by citizens of Babylon and the surrounding districts. The language is anything but prosaic and is a big part of the experience. Imagine if you were sitting quietly and your best friend walked up and used these enchanting words to deliver an appeal to lend them money:

May the Gods bless thee with great liberality, my good friend. Yet, it does appear they have already been so generous thou needest not to labour. I rejoice with thee in thy good fortune. More, I would even share it with thee. Pray, from thy purse which must be bulging else thou wouldst be busy in yon shop, extract but two humble shekels and lend them to me until after the noblemen's feast this night. Thou wilt not miss them ere they are returned.

Fantastic.

That a book about money management, published in 1926 and featuring a civilization that's been gone for thousands of years, could remain relevant in the 21st century, is a testament to the timeless, universal quality of the advice within. It also means that you may be unlikely to find new information if you're past the beginning stages of personal finance, but if you love a good story you'll definitely find this a worthwhile read.

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