Table of Contents
Introduction
After completing the article on 40 Books to Change Your Life, I decided to progressively go through the list, summarize the books and extract the lessons I deemed valuable from them to improve in each of those categories. This is the first of multiple article series from the aforementioned list.
This article series provides a summary of “The Richest Man in Babylon” by George S. Clason. It highlights key lessons from each chapter (except chapter 11 which is a historical sketch of Babylon). The book covers topics such as the five laws of gold, lending wisely, the importance of hard work, the laws that govern the building of wealth and more.
Note that the book is a set of parables from George Clason to explain the basics of money. The complete book is slightly less than 200 pages; hence it is a quick read. I consider this book as the very basics of financial literacy. We’ll dive into more elaborate financial concepts progressively.
This article summarizes chapters 4,5 and 6. Enjoy.
Chapter 4: Meet the Goddess of Luck
The main protagonists in this chapter are:
- Arkad, the richest man in Babylon
- Babylonians
“If a man be lucky, there is no foretelling the possible extent of his good fortune. Pitch him into the Euphrates and like as not he will swim out with a pearl in his hand.” – Babylonian Proverb
In this chapter, Babylonians question themselves on if there is a way to attract good luck. The Centre of learning is where this was discussed. In this temple, teachers will educate others on matters of popular interest, and anyone keen on the subject would attend the discussion session.
I am quite a fan of this Centre of learning concept.
Within the walls of this temple, all men met as equals from slaves to nobles. Arkad used to frequent this temple. He had his dedicated room in which groups of men of varying ages attended to discuss. The topic chosen to discuss on one of the nights was around how to attract good luck.Is it found when joining gambling games? (Gaming tables, races, whereby few coins are placed in the hope of winning way more) Is luck a reward to those in need?
They explored multiple areas in which they struggled to get the graces of the Goddess of luck, from the gaming table, to races, to finding lost wallets. Then they moved into luck in their own professional fields. They investigated situations in which they had good luck within their grasps, which eventually escaped. Ultimately, they come to understanding that “luck” is obtained only once we grab opportunity.
When opportunity stands in front of you, do not delay. Opportunity waits for no man. Today it’s here tomorrow it’s gone. Good luck favours those who accept to take the opportunity. Procrastination is the kryptonite of “good luck”. Pushing things that can be done now to later is not helpful as you pass on amazing opportunities. A habit of needless delaying when prompt and decisive action is required (procrastination) will always make one miss on good opportunities.
One must develop enough discipline to circumvent the spirit of procrastination within themselves. To attract good luck requires effort and to take up on opportunities that come to us. Goodluck can be enticed by accepting the opportunity.
Men of action are favoured by the Goddess of good Luck.
My main takeaways from the chapter are as follows:
Everybody can have their reservations about good luck, but in this chapter, what is strongly pointed out is that one must be decisive and grab onto opportunity as soon as they present themselves. That’s the only way one can get “lucky”. A habit of needless delaying when prompt and decisive action is required will always make one miss on good opportunities.
Chapter 5: The Five Laws of Gold
The main protagonists in this chapter are:
- Kalabab, the educator
- Nomasier, the richest man in Babylon’s son
- Babylonians
“A bag heavy with gold or a clay tablet carved with words of wisdom; if thy had that choice, which would thy choose?” Yeah you, which would thy choose?
Gold is reserved to those who know its laws and abide by them. Otherwise, the gold will just be wasted.
Kalabab speaks about the story of Arkad, the richest man in Babylon. Kalabab heard this story from Nomasier, Arkad’s son. Arkad wanted Nomasier to inherit his estate, but Nomasier had to first prove he could handle such abundance. Arkad wanted Nomasier to acquire gold and make himself respected amongst men. Arkad gave him a bag of gold and a clay tablet with the 5 laws of gold for him to start his journey. He was to return after 10 years to give account of his expedition. If worthy, he would be heir, otherwise the fortune would go to the priests as charity.
After the 10 years past, Nomasier gave an account of what had happened throughout:
- Nomasier talks on his mistakes and what he learnt from them.
- After losing all his gold, he then went back to the clay tablet with the five laws of gold (Typical ego trip, we think we know much, then we realize we don’t and we need to learn, I think that’s the reason Arkad gave him the coins in the first place, for him to misuse them rapidly and seek ways to understand the handling of gold better)
The five laws of gold from Arkad are as follows:
Law 1: ” Gold cometh gladly and in increasing quantity to any man who would put by not less than 1/10th of his earnings to create an estate for his future and that of his family.”
- Save at least 1/10th of your earnings.
Law 2: “Gold laboureth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.”
- Adequately invest your savings to ensure they work for you and produce more.
Law 3: “Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.”
- Seek advice from wise men on how to invest your savings.
Law 4: “Gold slippeth away from the man who invests it in businesses/purposes with which he is not familiar, or which are not approved by those skilled in its keep.”
- Do not invest in ventures you don’t understand.
Law 5: “Gold flees the man who enforced it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperienced and romantic desires in investment.”
- Do not invest in flashy schemes promising ridiculous returns.
For those who abide by the five laws, gold comes and works as its dutiful slave.
Nomasier paid back 3 bags of gold to his father, one as a return for the bag he gave him at the start of his journey, and the other 2 for the clay tablet to indicate to Arkad how he believed the wisdom is more valuable than gold.
If you were to give account of your handling of gold right now to your parent/financial mentor etc., how would you fare?
Those who have gold are those who know the rules of gold and abide by them. To earn wealth requires wisdom and persistency.
My main takeaways from the chapter are as follows:
There is a lesson of ego and humility in that Nomasier thought he did not need the clay tablets, because he had not realized yet he did not know that he was a novice at handling money. Once he squanders his money, he then humbles himself, learns the five laws of gold provided by Arkad, and applies them. There are mistakes made along the way, but eventually he gets there.
“There is no chain of disaster that will not come to an end.”
Chapter 6: The Gold Lender of Babylon
The main protagonists in this chapter are:
- Rodan, the spear maker of Babylon
- Mathon, the lender of gold
This chapter mainly touches on borrowing and lending money. The main takeaway from this chapter is to ask advice from those who are successful in what you are trying to do. In this case, Rodan who had just amassed a significant amount of gold (through hard work) asks advice from Mathon on whether to lend it to his sister’s husband or not.
His sister’s husband wants to become a merchant and repay Rodan with his potential profits. Mathon’s advice is quite potent. Borrowing is more than the passage of gold from the hands of one to the hands of another. Some burdens are equally passed on during the transaction.
He recounts a story to clarify his point that roughly goes as follows:
It’s about an ox and an ass. The Ox’s task is to plough the field, and the ass is tasked with transporting the farmer whenever needed. The Ox complains about the difficulty of its tasks, and the kind ass suggests he should play ill for the former to let it rest. But the field still needed to be ploughed, hence the Ox’s burden was transferred to the ass, and the ass was made to plough the field for that day. The ass was highly displeased and eventually found a way to convince the Ox to get it’s work back (by threatening the Ox would be sent to the butcher if it were useless). The ass acted as a friend and ended up carrying the Ox’s burden.
A few pieces of advice from Mathon to Rodan are as follows:
- If you desire to help thy friend, do so in a way that will not bring thy friend’s burden upon thyself.
- If borrowers borrow to make more money they typically repay, but if it’s for their own indiscretions, be weary of them.
- If you want to lend, lend wisely and in multiple places.
- Any person trying to borrow should equally provide a clear plan on how they’ll proceed with that money and eventually pay back.
- “Better a little caution than a great regret”
My main takeaway from the chapter are as follows:
If you want to lend money, follow Mathon’s advice to Rodan.
Conclusion
This second article of the series summarizes chapters 4,5 and 6 of The Richest Man in Babylon by George S. Clason. The main takeaways from these three chapters are as follows:
- “Luck” is obtained only once we grab opportunity.
- The five laws of gold.
- Advice on what to look out for before borrowing money.
The next article will cover the remaining chapters of the book. Till then, I hope you try out the principles from this article and let me know what you think about them.