Monday, May 25, 2009

Book review: The richest man in Babylon by George Clason

The richest man in Babylon – George S. Clason

This book is a collection of Babylonian parables that the author wrote in the 1920s. These parables were made into pamphlets that banks handed out to customers. The stories are used to explain the basic principles of finance such as compound interest, investments, saving and controlling expenditure.
The parables are based on ancient Babylon, a wealthy and educated city from over 5,000 years ago. The stories are written in the old ‘King James’ language (eg: thy, thou, morrow). Tales of how one person became a slave and managed to buy his freedom through hard work instead of shirking, how one person who ran away from his massive debts managed to repay them over time by planning, etc.

What I gained from reading this book:
This book was very interesting to read because I haven’t read anything else like it. The old language used was very unusual but served well in painting a picture of an ancient time in Babylon. The stories are well written and quite clearly show what it could have been like living back then. The principles that the parables are based on are very fundamental principles of personal finance, so I already knew them. It was refreshing to read them used in a story.

Although the principles are very basic and can be learned in any personal finance book, so many people don’t even know them or don’t bother to apply them. I have many friends who don’t even know about these principles or they come up with excuses why they don’t apply them. Reading these tales rejects any excuses by effectively saying “people managed to apply these principles 5,000 years ago so you have no excuse not to”.

I did have trouble with the old language used and some parts I got lost and couldn’t understand what was being said. From what I understand, another version has been published using current language that people will be able to understand. Even know I had difficulty with the old language, I prefer it. The old language is effective in the storytelling and I think the other version would not be as enjoyable.

Explains sound principles that have stood the test of time and that everybody should use. Interesting storytelling of an ancient time and the old language adds to the authenticity.

Some people may have trouble understanding the old language. The book is quite short, but in a way that’s good because it gets right to the point. People who already understand the basics of personal finance won’t learn anything new.

Recommended for: Everybody
I recommend this book for people who want to get a basic idea on how to manage their money but don’t like the idea of reading a finance book. The storytelling is an effective way to understand the principles without being bored unlike so many educational books.
Genre: Personal finance/Wealth

Overall rating: 8 out of 10 stars
Australians can buy the book by clicking the picture below:

Richest Man in Babylon

Where to from here:
After reading this book you will probably want to learn more about personal finance and how to apply the principles. There are many books that explain how to effectively manage your money.
I recommend the following to gain more insight into building your wealth or improving your financial situation:
The millionaire next door by Thomas Stanley and William Danko
Rich Dad Poor Dad by Robert Kiyosaki

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