The Richest Man In Babylon Book Summary
Updated: Jan 28, 2021
The classical error that most people make is that if you want to become a millionaire, you have to earn a lot of money. And of course, that's not true. I used to think that way. Just wondering around, thinking it's not possible for me to become rich because I'm not earning a lot of money. I never taught about how can I become rich. My plan was to live from paycheck to paycheck, and I taught, if I had more money, I will have a better plan. Until I met Jim Rohn. He told me: “you will have more money if you had a better plan”. That got me thinking. I mean really thinking. So I started searching for better plans and I found this book, the richest man in Babylon. A classic book on how to achieve Financial Freedom. This book is just pure gold. It's a must-read for anyone that wants to have time and money freedom because it teaches you how to become financially independent. Arkad, who was the richest man in Babylon, is teaching to other citizens of the city, on how they can also become rich. The teachings are recovered from clay tablets that have been written 5000 years ago and they clearly describe the basic principles of becoming financially independent. You may say 5000 years ago, come on, the world has changed a lot since. That may be true. But notice, the laws of money are like the laws of gravity: assured and unchanging. There are some basic laws on how to become rich and those are exact same laws that existed 5000 years ago. Now according to the book. There is one prerequisite to be rich, and that is, you should want to be rich, you should ask for it, You should seek it. Jesus said: “Ask and it shall be given unto you, seek and ye shall receive.” If you are still reading this, I guess you probably are serious about it and you want to be rich, you just simply don't know how. I didn't know how either until I read this book. In the book, you read: “Where the determination is, a way can be found”. What I learned from this book, helped me to create a plan for myself. In this summary, I'm going to share with you some of the things that I've learned, so you may also create your own plan on how to become rich.
Principal #1: Pay yourself first.
You will only begin having more money when you realize a part of all the money you earn, is yours to keep. You pay other people for the food you buy, the clothes you buy, the electric bills, rent, and so many other things, but if you want to be rich, you should pay yourself first. In other words, you should save some money. The book suggests that you should save at least 10% of your income, more if you can afford so. Now there are two ways you can save more money.
The first one is to cut your expenses. If you start doing this, at first, you may find it hard to live on 90% of your income. But soon you will get used to it. You can do this by cutting some unnecessary expenses. Next time you want to buy something, ask yourself: Do I really need this? Also, be aware to never take on debt, otherwise, you’ll delay your journey to wealth for months or even years.
Another way to be able to save more money is to increase your income. You can increase your ability to earn by improving your skills. The book suggests, If you work hard and take action, you will create more opportunities for yourself, which is learning how to be lucky by working hard and doing your best. According to the book: “work, well done, does Good to the man who does it, it makes him a better man”. I also read another book called Four Agreements and it suggests that no matter what you’re doing, Just make this agreement with yourself that you are going to do the best you can. This will make you a better man and you'll see more money and opportunity will come to you.
Principle #2: make your money work for you.
Now that you start saving and have some money. You should not let it just sit there. You should put it into work so that it will make even more money for you. This is called investing. Book gives some tips on how you can do this more intelligently.
First One is, always ask for the advice. You should be cautious here, only seek advice from people who are experts in a particular subject. It cost nothing to ask wise advice from a good friend, but be careful, advice is one thing that is freely given away and you should only take what is worth having. This is why the book suggests only take advice from experts. It's easy for amateurs to give advice. People love giving advice and you should be careful whose advice you're listening to.
Another important tip is: Never lose your money. Don't invest in places that seem too good to be true because you know what, if it seems too good to be true it probably is and you may lose all your savings. You should desire safety for your money. Better a little caution than a great regret. If you invest foolishly, your money is as good as gone. So only invest your money in things that you are very familiar with. For example, I don't know anything about real estate. If I invest in real state without even knowing how it works, I probably lose the money that I worked really hard to earn. Also, Insurance is a very good way to protect your money from potential loss.
Another tip which in my opinion is the most important one: Invest in yourself. Spend your time and money to improve your skills and abilities to earn more money. Keep learning and improving. This will give you a huge advantage over time. While the average person goes home after work to watch TV and does nothing to improve himself, You can get ahead by improving yourself just a little bit each day and you’ll see this little bits soon add up. In my opinion, the best way to invest in yourself is to read books. I've been reading a book each week and have been learning a lot from them and I'm making these summaries to share with you what I’ve been learning. I hope this would encourage you to read more books because to be honest there is no replacement for reading books.
You may agree with the things that I said so far, but to just make an impression of how this information can change your life, Let's suppose you just set aside $20 per week. If you did this for 50 weeks you would have 1000 dollars and you would probably form a habit to do that. If you keep doing this for 40 years you will have $40,000. That's if you just left it sitting there. However if you found someone that's really understood the money and you gave it to them and put your money work for you. Then you got two ways going for you. You are working and so as your $20 bill, you know at the end of 40 years how much money you will have. If they only found gainful employment at 14%, And there are many people around that can help you do that, You will have $1,520,000. All you've done is just set aside $20 a week. Now if you just left your million-and-a-half sitting there for you, it will earn for you between 150 and $200,000 each year and you will still have your million-and-a-half. I would imagine you can probably get by on that for a while. And all you've done is just set aside $20 a week. If you worked at Chipotle and never got promoted you could become millionaire. So you see the classical error that Most people make is that if you want to become a millionaire, you got to earn a lot of money. And of course, that's not true. If you want to be a millionaire. You just need to have a plan to be a millionaire. That's all you need. You just need to make up your mind that you'd be a millionaire. And then you can use the tips that I gave in this summaryto make your own plan. Good luck.
If you learned something from this summary, check out the video in our channel and don’t forget to subscribe for more summaries in future..