My taxi driver to the airport – upon hearing I was a ‘finance guy’ – told me all about The Richest Man in Babylon by George S. Clason, a book which changed his life. From this one book, my driver told me, he had built his life plan for savings, investments, and wealth creation.
I had never heard of the book, and, of course, the fact that my taxi driver told me about the book reminded me of the classic sign of a frothy stock market: Be very cautious, for example, when the doorman in your building starts swapping stock tips with you.
I needn’t have worried, and I’m glad I set aside my initial snobbery and skepticism to read this.
Clason wrote and distributed a series of “Babylonian parables” in the 1920s in pamphlet form, stories that later gathered wider distribution through banks and insurance companies throughout the 1930s.
The parables read like traditional biblical tales – like the Fishes and Loaves, or the Prodigal Son – full of Thy And Thou, Giveth and Taketh. We meet slaves and camel-traders, brick layers and money-lenders, soldiers and scribes.
Like all good parables, the stories are short, simple, and may be summed up at the end with a pithy phrase. They are also memorable, credible, and true.
In one chapter Dabasir, the camel-trader, relates the story of his long journey from slave to camel-trader to fat merchant through luck and determination, but most importantly the habit of living below his means. Beginning from poverty and deep indebtedness, Dabasir figures out how to live on 70% of his income, dedicating the remaining 20% to paying his creditors, and 10% to “paying himself,” through savings and eventually investment. The result, over time, is a debt free and eventually prosperous living.
The parables’ simplicity does not imply banality, but rather the permanence of a set of basic laws about money. Although Clason wrote them nearly one hundred years ago, it’s not absurd think that wealthy Babylonians, three thousand years ago, could have actually passed on these stories contained in The Richest Man in Babylon.
The plain fact: Financial wisdom doesn’t really change from millennium to millennium.
The vast majority of us go through life wishing we had a simple, memorable set of rules on complicated topics like love, faith, death, personal fitness, and of course, money.
Because these topics seem to combine mysterious, personal, taboo and embarrassing elements we gather information from weird, flawed sources. We trust pop songs to learn about love and sex. We consult people like Deepak Chopra on faith. We pretend, against all evidence to the contrary, that death is avoidable, or some kind of failure of life. We let some guy with great abs on late-night TV and a set of unproven nutritional supplements or an exercise gadget determine our fitness regime.
Our relationship to money is the worst of these failings, because we’re all such easy marks. The Financial Infotainment Industrial Complex knows that people who think they need more money (that’s all of us), with a fundamental ignorance about money (that’s most of us) are easily separated from our money. Most of what the Financial Infotainment Industrial Complex has to say about money is the opposite of wisdom about money.
It’s wrong, expensive, and misleading.
Can I give you some advice about money?
Turn off the damn television, lower the volume on the radio, peel your eyeballs away from the Interwebs for a day, and read some Babylonian parables. There’s more simple goodness here than a year of the other crap.
After you finish, pass it on to a young person who can use the advice too.
Please also see related post: All Bankers Anonymous Book Reviews in one place.
 The early 20th Century version of a financial blogger!
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