Must Read Summaries - The Richest Man in Babylon - George S. Clason

THE RICHEST MAN IN BABYLON

The key principle at the very foundation of any program designed to generate wealth is at least one-tenth of all that a person earns is theirs to keep.

Anyone with a desire to accumulate wealth and put it to good use requires two things:

1. Time.
   All men actually have this in abundance, but only a few put it to use making themselves wealthy. Instead of looking for constructive, useful ways to apply the resource of time, many people fill their lives with diverse activities which simply help them to pass the time.
2. Study.
   There are two kinds of learning that are useful to anyone seeking to generate wealth - learning about specific subjects and learning how to find out what is not commonly known about any topic. Both kinds of learning are useful and valuable.

There are several basic principles which apply to the acquisition of wealth:

1. Live on less than you earn. Most people labour to pay their bills. They feel successful when they have been able to get to the end of the month and pay all their accounts and obligations. Yet, at best, this is just treading water from the perspective of building wealth.
   A real change in perspective comes when a person makes a commitment to pay themselves first each month, before anyone else. It can be as much or as little as thought wise, just so long as the amount saved is one-tenth or more.
   The vast majority of people are accustomed to spending everything they have available. Therefore, if a person pays themselves first and then lives on the remainder of their income, their lifestyle will adjust accordingly. Before long, the person will not even be aware they are living on less, and their capital reserves will gradually increase.
   There is a tremendous feeling of pride, self-control and progress which comes from the establishment of a regular savings program. In everyones lifetime, a lot of money passes through their hands over the years. If a person will keep just a small proportion of that money, they will eventually have a sizeable pool of capital available.
   
2. Seek advice from those who are competent to give it through their own experiences.
   Once capital starts to build up, a vast array of investment opportunities will present themselves. Some of these will be genuine, some sinister, but the bulk will be doomed to failure with only a marginal chance of succeeding.
   The key factor in looking at any proposal is to examine the background of the people making the proposal. Have they actual experience in that field of business, or are they simply giving you an opportunity to use your capital in pursuit of their idea?
   
3. Another key principle is to make the children of your savings also work for you.
   The accumulation of wealth moves forward much quicker when a person allows the effect of compound interest to work in their favour. Instead of frittering away the interest received on capital accumulated, put that interest out to work in other projects which have the potential to earn additional income.
   In that way, the small stream of wealth accumulation that is started by always paying yourself first and keeping a portion of all that is earned turns into a mighty river with force and power to move ahead strongly.

The accumulation of wealth should be an exciting and adventuruous project rather than a source of misery. Make the journey into an adventure and start enjoying that now, rather than waiting for some magic threshold to be reached at which point you can start having fun.

Life is full of many good things which are worthwhile and good value for money. Dont become so focused on saving that you miss out on all the good things there are to enjoy along the way.

If you have not acquired more than a bare existence in the years since we were youths, it is because you either have failed to learn the laws that govern the building of wealth, or else you do not observe them.

--Arkad

The thoughts of youth are bright lights that shine forth like meteors that oft make brilliant the sky, but the wisdom of age is like the fixed stars that shine so unchanged that the sailor may depend on them to steer his course.

--Arkad

Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed, the sooner the tree shall grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner you may bask in contentment beneath its shade.

--Arkad

Wealth grows wherever men exert energy. If a rich man builds him a new palace, is the gold he pays out gone? No, the bricklayer has part of it and the labourer has part of it and the artist has part of it. And everyone who labours upon the house has part of it. Yet when the palace is completed, is it not worth all it cost? And is the ground upon which it stands not worth more because it is there? And is the ground that adjoins it not worth more because it is there? Wealth grows in magic ways. No man can prophesy the limit of it.

--Arkad

SEVEN CURES FOR A LEAN PURSE

1. Start thy purse to fattening
2. Control thy expenditure
3. Make thy gold multiply
4. Guard thy treasures from loss
5. Make of thy dwelling a profitable investment
6. Insure a future income
7. Increase thy ability to earn

Anyone with a desire to accumulate wealth starts with an empty purse which they hope their lifes labours will fill to overflowing.