Overview
Set in ancient Babylon, George Clason uses parables to teach fundamental principles of financial wisdom that are as relevant today as they were thousands of years ago. The book follows characters like Arkad, the richest man in Babylon, who shares the secrets of wealth-building with his fellow citizens.
Clason, an American author, wrote a series of pamphlets in the 1920s using ancient-Babylon setting as a vehicle for personal-finance advice. The Richest Man in Babylon, first published as a complete book in 1926, compiled those pamphlets. The book's 'pay yourself first' principle, articulated in parable form, became one of the foundational ideas of modern personal finance.
Key Ideas
Pay Yourself First
Save at least one-tenth of everything you earn before paying any other expense; this simple discipline is the foundation upon which all wealth is built.
Make Your Gold Multiply
Savings alone are not enough; you must put your money to work by investing it wisely so that it earns returns that compound over time.
Guard Against Loss
Invest only where your principal is safe and where you can reclaim it if desired; seek the advice of those experienced in the profitable handling of gold.
Who should read this
Readers new to personal finance who want the ideas in story form. Also useful as a first finance book for teenagers, since the parable structure teaches the principles without looking like a homework assignment. The seven cures for a lean purse (save a tenth of your income, control expenditures, multiply wealth, guard against loss, make a profitable investment of your home, ensure income in later life, increase your ability to earn) hold up remarkably well.
Who might skip it
Skip if you want modern tactics — there are no index funds, no ETFs, no tax-advantaged accounts in Babylon. Skip also if archaic parable style wears you down; the characters address each other as 'my friend' and 'good sir' throughout.
The verdict
The ideas in this book are older than the book, but Clason's packaging is what made them sticky. It is the most accessible introduction to personal finance I know of, and the only one I'd give to a reluctant reader. Read it, then immediately read something modern to translate the principles into current instruments.
"A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn."
— George Clason, The Richest Man in Babylon
If you liked this
The Psychology of Money by Housel for the behavioural counterpart. The Simple Path to Wealth by J. L. Collins for the modern tactical version.