In the 1930s, American author and businessman George S. Clason published The Richest Man in Babylon, which was often cited as a classic book on personal finance. The book became the top book on personal finance and wealth management which has allowed the book to keep in printing even after 90 years and sold over 2 million copies.
Simple-Short-Summary: The recipe for acquiring wealth is by saving and investing some part of your money. With trial and error methods, you’ll learn more about investing, and eventually, you’ll find out that your money is working for you rather than you’re working for money.
The Richest Man in Babylon is for people who are interested in learning ancient secrets of wealth management and want to develop a financial plan.
The Richest Man in Babylon Summary
A wealthy person named Arkad lived in the city of Babylon. Watching his success, the two childhood friends of Arkad asked him how he abled to accumulated so much wealth while they were still working hard to fulfill the basic need of their family.
Arkad chuckled and said that the secret had been told to him by another wealthy man while he was working for him. And, this secret was “A part of all you earn is yours to keep.”
Put another way, you aren’t allowed to spend all that you’ve earned, but your aim must be to invest your hard-earned money intelligently.
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Lesson: A – Recipe for gaining wealth is intelligently saving and investing your cash.
Have you ever mulled over why a handful of people are good at acquiring and accumulating wealth in compare with others? You may be thinking that some people spend what they’ve earned while others are good at saving.
In fact, to become rich, you must do more than saving cash in your bank account. Certainly, before you invest your money, you’ve to accumulate it.
It expresses that you can’t squander all that you’ve earned. For this, you’ve to live relatively low than your wages.
For instance, you can cut costs from luxuries items and choose products that fulfill your requirement like replacing a luxury room freshener with a regular one. However, saving cash in this fashion isn’t enough to become rich.
You should look for investment possibilities. As money under your mattress won’t grow in value, and even piling up cash in your bank account will produce a meager amount of interest.
You must invest your saving in government bonds, stocks, and in funding new start-ups because these’re something solid and will give you more interest in return. And, if you’re able to do it right, your saving will multiply without your efforts.
At any time, while investing money, assure yourself to do it wisely. Furthermore, hand over your money to those people who can actually amplify your money and have the knowledge to do so, not to those who are telling you that they’re setting up a diamond business, and with that, they’ll build a fortune.
Lesson: B – With only one strategy in your arsenal, you can’t go a long way in your journey
Numerous people desire to become wealthy overnight. However, aside from winning a lottery, chances are very few of happening this.
Gaining wealth is a lengthy and continuous process which composed of taking small steps in the forward direction and concurrently enduring some defeat. If so, you are wondering why does it take so much time to acquire wealth?
Simply put, our world is continuously evolving that indicates that one technique isn’t enough to grow cash. With only one strategy at hand, you can’t sit back, relax, and hope the money flowing continuously into your account.
Life and economy are uncertain and can be altered. Thus, at any moment, something big can happen like a market crash.
This shows that to sustain and grow your wealth, you’ve to learn and embrace new strategies and test them in the real world. As you gather more knowledge through learning, experimenting, and probably failing sometimes eventually, you’ll become wise and capable of making better decisions in investing.
Actually, the trial and error method is almost similar to a scientific study because even a failed experiment can give ample information of what needs to take care of in the next experiment. Hence, if you invest your money foolishly, you might gather so much knowledge that may be helpful for your next investment in the same domain.
Remember, trial and error strategy involves risk. Therefore, ensure yourself that these errors are minor, and you mustn’t invest all the cash that you can’t lose.
Lesson: C – Investing mayn’t produce immediate treasure, but it saves you from sudden life surprises.
Have you ever thought what is the distinction between acquiring wealth and making money? Some mightn’t aware of this, but there is a distinction between both.
Making money focuses on working for others and receiving a monthly paycheck while acquiring wealth conveys a path in which not you, but your wealth is working for you. To go from one side to the other side of the spectrum that’s “making money” to “attaining wealth”, you’ve to do some saving, and with that money, you can start your investing.
Suppose you invest some part of your wealth in real estate. Now, your wealth will multiply on its own without your effort.
However, working for others can help you to attain short-term goals, but you still concern about the future. Even, there is a danger with this method of making money.
Gaining wealth includes long-term objectives. For instance, the real estate you’ve brought won’t generate immediate cash for you.
Instead, in the initial period, you need to settle the investment and wait patiently for its worth to amplify. Of course, this may take some time.
Surely, once the investment begins paying up, very likely, it’ll continue to go up until you’ve it. Planning your finance in this way, you can save yourself from a sudden incident like getting fired from the job.
Rich Dad Poor Dad Book by Robert Kiyosaki and Sharon Lechter: What’s in it for me?
- Lesson: A – The Mentality Of Poor Vs. Middle-Class People.
- Lesson: B – The Background Of Taxes.
- Lesson: C – Two Emotions That Causes You Trouble.