George S Clason wrote one of the most memorable books on personal finance titled “Richest Man in Babylon”.
There are many technical books out there that teach you personal finance however with this particular book, it explains personal finance in a metaphorical way.
I first read this book several years ago and till this day, I still remember the stories and used the principles outlined int his book.
The Walls of Babylon
One of my favourite stories is the walls of babylon. The story starts where there is an army trying to storm a castle, however the castle is protected with strong walls high as the eye can see. The people inside the castle are women and children. They have no soldiers and the only defence they have are these walls of babylon.
The army continually tries to break through the walls of babylon but after several days, they give up and leave. If it wasn’t for the strength and defence of these walls, the people inside would be killed.
The moral of the story is that we should always prepare and protect our wealth. Just like the walls of babylon, there maybe a time when someone will try to break in and steal your gold. One can not be safe without adequate protection.
Here are a few more key take aways from the book.
Pay off your debts.
Debts inhibit your ability to grow in life. If you’re walking around with a lot of debt, it will take you a while to pay off that debt in order to focus on prosperity. I know people who have a lot credit card debt and it can really affect their mindset. Mr Clason teaches you that you must focus on paying off your bad debts before you can focus on building wealth.
Aid people who are in misfortune.
In life you’ll come across many people who are misfortunate. Try to help these people but within your means.
Meet the goddess of good luck.
Mr Clason talks about the goddess of good luck. In order for you to attract more good luck into your life, you must be a man of action. You can not sit there and try to attract good luck into your life without doing anything. You must continually take action and you’ll eventually attract good luck into your life.
Set aside one tenth of your income.
Mr Clason talks about setting aside a percentage of your income such as 10%. This may be hard for most people however if you work your way up from setting aside 1%, then you will eventually be comfortable setting aside 10% of your income. Many people have created wealth when they managed to survive off 50% of their income and this is when they start to accelerate their financial progress.
Use your income to invest.
Once you’ve set aside some savings, you want to set aside some money to invest. You should never save money just for the sake of saving, you save as much as you can to invest.
Invest in what you know.
One of my favourite key takeaways is to invest in what you know. There will be many opportunities that will come your way however if you try to invest your money into instruments that you don’t understand, you will lose your money. Even great investors like Warren Buffett says that he only invests in his circle of influence. He only invests in companies he understands. So Clason is sharing with us to invest your money in things that you know and understand.
There are no short cuts.
Don’t try to get rich quick overnight. It never works and you’ll lose your money at the end. Yes there are those 1% who have done it but you never see the 99% who lost everything. There are no short cuts to wealth, just plain old fashioned hard work, patience and discipline.
I love this book and it’s been recommended by so many leaders around the world. If you’er starting out in personal finance and need a book that explains it in an easy to understand fashion, check out this book. It will change your life.
Stay Strong and Be Relentless.
PS. If you liked this article, I’m available for coaching and can help you design your goals for the next 12 months and beyond.