A book Review of "The richest Man in Babylon"

by Kekeli Fortune

In this article, I'll be reviewing "The richest man in Babylon"— written by George S. Clason in 1926. This book contains seven individual courses of action that must be consistently carried out by any individual who is on the quest to financial freedom or independence. The lessons provided in the book stem from the principles used by the wealthy citizens of the richest city of the ancient world. These seven measures remain constant for every individual irrespective of the person's background—whether his/her family is rich or poor, whether he/she is of superior intellect or not—he/she must follow the seven steps to a T.

The book contains other interesting categories of lessons that are very important; however, we will be focusing on the "seven cures for a lean purse" in this article.

In my article A book review of 'rich dad poor dad' , I wrote about the importance of financial literacy. Once a person has made that decision to be wealthy, he or she must be prepared to invest time and resources to learn; I'm not talking about hours nor weeks, nor even months: financial literacy can only be attained through years of learning, and maybe, a few failures or losses. And once that individual learns how to become financially independent, he/ she must practice more than often in order to gain the experience and expertise that is needed for wealth creation. Now, let's turn to the "seven cures for a lean purse."

1. Don't waste anymore time; Start Saving now.

Seeing that you are an individual who aspires to financially independent in the future, I hope you are being tirelessly consistent with your savings. But if you're not, it's not too late. But then again, I wonder why you are not putting away a little something regularly. I know what you're going to say— that you have a lot of "needs" , but do you? We all know there are needs, and there are desires (wants); the truth is most of us know the difference, but we still insist on listing the things we want as things we must have at the expense of our savings.

Dipping your hand in your emergency savings, or your business capital savings to buy a new pair of expensive shoes, or the latest phone is frankly suicide.

As rightly pointed out by the author, it's interesting to note that once you finally understand the importance of saving, and are therefore consistent with it, you'll manage to live on your remaining income with much ease. So I urge you to begin now, if you haven't already. Think about what would benefit you most— wasting your hard-earned money on gratifying frivolous desires now, or enjoying them in future as a result of your investments.

According to the Babylonian rules for wealth creation, your regular savings shouldn't be less than a tenth of your income. This is actually payment to yourself, and should be among the first things you do on receiving your income.

2. Have control of your spending.

George Clason mentions in his book that we as humans would always want more than we can attain. If this is true, how can you ensure that you save? Make a budget. It's as simple as that.

Make a complete list of all the things you intend on acquiring. Ensure to add what they might cost. Afterwards, select the things that you know you need and the things you can afford after your savings has been deducted from your income. and lastly, stick to the budget!

This way, you'll guarantee the continual increase in your savings.

3. Invest your savings.

The next step in this process is to make your savings work for you. After careful investigations, invest your savings, and when that investment succeeds and yields profit, invest that too. There are numerous forms of investment plans: stock, bonds, mutual funds, etc. However, it's more than necessary that you understand what you are putting your savings into. Before attempting to invest your savings, you should have sound financial knowledge. You should be able to understand the numbers being mentioned to you by your investment banker. You should be able to ascertain the risks involved in that investment and the possible rewards of the investment; and finally, you should be able to clearly identify which outweighs the other — risks, or rewards. More on investments can be seen in my article A book review of 'rich dad poor dad'

4. Don't lose your earnings.

After making the investment, protect your principal by monitoring it closely. Make sure that the risk of losing your principal is promptly noticed and the proper course of action taken. A good investment should in itself protect your principal. Advice about financial knowledge and investments should only be sought from people with the right expertise.

5. Own your home.

According to the author, make it a goal to own your home if you aspire to be financially independent . Owning your home gives you flexibility and the ability to convert the house into a money generating asset— if you so wish.

6. Plan for your future.

There are so many ways to plan for a comfortable future after retirement, but you'll first need to calculate what your retirement needs might be. Thereafter, determine what investments will best cater for those needs by considering their risks, and their rewards. Planning for your future is an extensive procedure, so find out how to do that today.

7. Find means to increase income generation.

It better to find ways to progress in life than to be at standstill. For this reason, knowledge and wisdom should always be in pursuit. Always strive to improve on your financial skill set, and also, your professional skill set as time goes by. Strive to discover better ways to do the things that you've always done. Don't succumb to complacency.

There is so much to learn from this book, and I hope you are encouraged to read it in it's entirety. Thank you for reading.