Notes on

The Richest Man in Babylon

by George S. Clason

Actions Taken / Changes

The book confirms much of what I already do.

Therefore, my actions are to continue saving a percentage of what I earn, continue investing, and continue learning from those wiser than me (in any area).

Summary of Key Points

  • Don't spend more than you earn — save at least 10% of your income.
    • Pay yourself first.
  • Invest some of what you save. Make your money work for you.
    • Don't squander the returns on these investments. Reinvest them.
  • A lot of people has an opinion about what you should do with your money, and will freely give advice. Be careful of what you should follow. Take only the advice of those with experience and wisdom — and even then, carefully think it over.
    • Only seek advice from those competent enough to give it.
    • Especially be careful when they have no skin in the game.
  • One way to increase your ability to earn money is to become better at what you do.
  • Men of action are favored by the goddess of good luck.
    • To be lucky, you must increase the surface upon which your luck may strike. Take no bets, win no prizes.
      • How? Invest. Create. Publish. Sell. Teach.

Highlights & Notes

Seven Cures for a Lean Purse

  • The First Cure — Start Thy Purse to Fattening

    • Save a percentage of what you earn.
  • The Second Cure — Control Thy Expenditures

    • Budget your expenses, so you can have what you need, (some of) what you enjoy, and can still save a percentage of what you earn.
  • The Third Cure — Make Thy Gold Multiply

    • Invest; Make your money "work for you".
  • The Fourth Cure — Guard Thy Treasures from Loss

  • The Fifth Cure — Make of Thy Dwelling a Profitable Investment

    • Own your home
  • The Sixth Cure — Insure A Future Income

    • Save for retirement.
  • The Seventh Cure — Increase Thy Ability to Earn

Be careful of hedonic adaptation. Once you achieve some goal, your new state becomes your new standard. It is taken for granted, and you start desiring more.

The Five Laws of Gold

  1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earngs to create an estate for his future and that of his family.
  2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
  3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
  4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
  5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.

This is just repetition of earlier chapters.

Save. Invest. Listen only to the wise, not the 'get rich quick' schemers. Be careful with your money; only invest in what you understand.

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