One of my favourite personal finance books, The Richest Man in Babylon by George Clason, uses a collection of parables to walk the reader through the foundational concepts upon which anyone can build personal wealth.
Clason starts his famous book with this insightful headline;
“To bring your ambitions and desires to fulfilment, you must be successful with money”
It is Clason’s stance that a society can only be successful if its citizens are prosperous and it is through this prism that he sets out to tell the tale of two friends, both poor, but highly accomplished in their trade. These two seek advice from their childhood friend who has grown rich and amassed a great fortune.
The story imparts 4 key lessons:
- Pay yourself first. Without this nothing else can be achieved
- Live below your means. Spend less than you earn
- Make your money work for you: are you spending on things that make you poor (tat and gadgets) or things that will make you rich (education and experiences)?
- Plan for retirement: if you don’t want to choose between heating and eating then you better have a plan
Rating: 5 bullions
The book is both easy to read and rich in learning. Each chapter is written as a parable that imparts a specific financial lesson. This means that you can dip in and out as you wish.
The Richest Man of Babylon will help you shape a better financial mindset and while it doesn’t promise to make you rich – be sceptical of any book that does – it will impart lessons to help you develop better financial habits.