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The Richest Man in Bablyon for Today

By Edited Nov 13, 2013 0 0

In the 1920’s a man named George Clason wrote a book entitledThe Richest Man in Babylon.  The original stories were distributed to banks, insurance, and other financial institution in pamphlet forms for years prior to being assembled and published in book form in 1926.   Clason wrote this book using parables of fictional characters from Babylon.  This is a very good book about finances.  This book is also very well written and enjoyable to read even if you are not interested in money.  You are investing in your future by improving your finances and reading this book can give you an entertaining way to reach your financial goals. 


The Richest Man in Babylon

This book written almost 90 years ago still is wise advice for the modern person to make wise choices regarding finances.  The following sections are my modern adaptation of the advice Clason gives in his book.  The techniques in this book are easily.  As one of the book’s character, Arkad is quoted as saying “Truth is always simple.” 


Get out of Debt

The first thing you should do to take control of your finances, get out of debt, and enjoy life debt free is to pay yourself first.  The parable posits you can live off 90% of what you make.  This is easily done, if you are willing to do it.  For every $100 you make, put $10 into a savings account.  If you get $250 per week after taxes, then put $25 in your savings account.  Again, this is simple.  The hard part is keeping your hands out of that savings account.   At the end of the first year you would have $1300 plus the interest in the account. 


Get out of debt

In the book Arkad asked the group he was talking too how many had “lean purses.”  How many of you would be raising your hands when that question is posed. Many of the men in the audience of Arkad had very little money.  Arkad questioned why all the men had different paying jobs and different size families but all had no money.  He was referring to the more you make the more you will spend.  The parable encourages the reader the next thing to do is to be able to control the expenses.  To do this you should control your bills and control your entertainments and luxuries, to be able to put 10% into the savings. 



In the next step, Clason stated you should put the money to work for you to draw interest.  Putting your money into a savings account will do this somewhat.  After you have more put in the savings, it might be wise to talk to a financial planner to see if investments are a good fit for you.  If you do talk to financial planners, it does not exonerate you from knowing about your finances and planning accordingly.  You essentially still have to be your best financial planner.  Educate yourself about where and how your money is working for you.



This parable is about passive income and has been very intriguing to me. I have included this in the investing section, because passive income is investing time in the beginning for rewards later.  However, it is much more than that and very exciting.  I have recently been listening to a podcast and reading blogs from Pat Flynn and Smart Passive Income.  He has inspired me to start doing a lot of things to improve my situation.  Mr. Flynn focuses on making money on the internet but his ideas have inspired me to do so much more.  He does not know it and has never heard of me, but I owe him a debt of gratitude for inspiring me to write this very article along with other things I am currently doing. 


My opinion of the Smart Passive Income idea is to work hard now so you can reap the benefits in the future.  To me, this idea was not really new because I worked hard to get an education so I could become a psychologist and get a better job.  It worked, but I never thought about applying this concept to money.  I have been trading time for dollars for quite a few years now.  If you would like to learn more about passive income, I highly recommend checking out Pat Flynn’s website listed above.  Mr. Clason would have been proud of this and I wonder what parable he could come up with teaching people how to use the internet to make money.  He could not have even fathomed this 90 years ago.  


Home Ownership

The Richest Man in Babylon tells the reader if they are renting, they should go out and buy.  This is simple enough.  If you keep paying rent you will not have anything to show for it when the time is right for you to move on and up.  If you are buying your house you are gaining equity in the house and at the end of the terms and conditions of the mortgage, you will own something tangible.


Home ownership

The home is usually the single most expensive thing your are investing in.  Yes, the house is a liability because you are paying the mortgage, paying insurance, and paying for upkeep, but the HOME is the asset.  Having a place to raise your family is priceless as the commercial goes.  Invest in your home and you are investing in your future, a future that a price cannot be added to.   


Life Insurance

Arkad tells his listeners to plan for retirement and buy insurance.  No doubt this was Clason writing for a particular audience.  Remember this book was first distributed as pamphlets for banks and insurance companies.  With that being said, it is still good advice.  Prepare for a time when you will not be able to work or when you die so that your loved ones will not have to worry about cost of a funeral or how they are going to survived after you are gone.  I asked a friend of mine, Johnny Hardcastle, the other day, why they call it “life insurance” when it is only payable upon death.  He gave a very good answer.  He said “the life is insurance is not for you, it is for your family’s life.”  I was impressed with his answer.


Training and Education

The last piece of advice is to increase your ability to make more money.  Get training in the form of college classes, technical training, mentorships, and self studying.  Increase your knowledge and make yourself hard to replace.  This will increase your job security and make you more marketable for that company to promote or for another company to “steal” you away.  Getting yourself an accountability coach, life coach, or just a personal friend who supports you is a great way to get this on track.  The mentor does not even have to know you.  You can get great advice from mentors in the form of books, blogs, podcast, etc.  Again I recommend Pat Flynn and using his smart passive income strategies.  It has done wonders for me.  He does not know me and I have never met him but he has influence my life for the better.  Find your own mentor and get after it.  Do something today to improve your financial well being. 


Live Within Your Means

In other parables in this book, Clason proposes that you should still save 10%.  He says 70% of your income should be to pay for your household expenses and food.  The other 20% should be used to pay off creditors that are not the house mortgage.  If your debt, outside of your house is more than 20% you should negotiate or find more ways to increase income and get that debt paid down. 


dont do credit

Dave Ramsey makes good argument for this.  His snowball debt reduction strategies have helped me pay off more than $10,000 in debt.  I am still a work in progress with these strategies, but I feel great relief every time another debt is paid off.  I used to buy the things to keep up with the Jones’.  I have to admit I still buy things I sometimes do not need but I am doing much better.  I am living within my means.  Since I started doing this I can afford those times I want to splurge. 



Clason wrote a classic book about finances that is still very applicable today.  What ideas do you think would be included in a New The Richest Man in Babylon, today?  I think leading the Level 10 Life website I have will start to focus on this more in the finance section and I could use your input.  Make today and everyday a great day leading the Level 10 Life. 




The Richest Man in Babylon - Illustrated
Amazon Price: $14.99 $9.07 Buy Now
(price as of Jul 27, 2013)
The Total Money Makeover: A Proven Plan for Financial Fitness
Amazon Price: $24.99 $9.72 Buy Now
(price as of Jul 27, 2013)


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