The Richest Man in Babylon Book Report
Book report of The Richest Man in Babylon
George S. Clason’s book, The Richest Man in Babylon, is a collection of financial parables. The principles and lessons are simple and straight to the point .They are divided into three sections and each has different teachings on financial management, but they all interconnect in their principles. In summary, the key points in the book are in the story of Arkad’s “seven cures for a lean purse” namely; control of the expenditure this principle states that money should not be used to buy unnecessary things even if they can be afforded, instead the focus should be on saving a tenth of the initial income. Starting thy purse to fatten this principle revolves around saving one tenth of the earnings that is for every nine coins spent save one for future use. Preventing loss by guarding your treasures this lesson teaches that it is wise to invest in places that have safe principles only (Clason 24).
Making your gold multiply teaches that after saving, the wisest thing to do next is invest in ventures that generate more income rather than leaving it idle. Insuring the future income, this lesson encourages investing for the future that is ensuring family well-being even after death or retirement. Regarding your home as an investment, he explains it as rather than renting it is better to own it, and use that money for rent to do investments that are more profitable. Increase the ability to learn this principle states that investing in education is an asset since it opens avenues for more opportunities and it is an ingredient to making informed decisions on finance and investments (Clason 35).
The main mathematical principles
The main mathematical principles in the book revolve around understanding the basics behind investing and saving. By combining the two principles, a person gets a clearer insight on where and what time to invest, how to manage the returns and handle the risks and lastly be more open minded on diversification of their investments. In addition, through focusing mainly on saving, the author make the readers aware of the advantages of having extra income in case of emergencies and unforeseen turn of events, the extra income can be used as a cushioning in those hard times. Not only that, but the extra income can also help in starting other projects that could bring in more income which will help the family example in the case of retirements or death of the individual (Clason 34).
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Another mathematical concept that the author explores is on discouraging people’s mentality that believes in luck compared to hard work. He explains this throughout the different stories as he gives a chronological order of events on the characters growth that never depended on chance but basic hard work. These are the main basic mathematical principles that the author tries to explore in his book (Clason 56).
The book really influenced my perspective on financial management not only through the author’s clear discussions on the relationship of money, but also through the mentioned life philosophy on a broader aspect, which helped shed more light on the subject. The book’s clear financial concepts have withstood the test of time, making them an asset since they are still relevant and applicable today. The book also taught me the purpose and meaning that life can have by simply using money wisely. I also learnt not to be influenced by the details of account types or unwise investments. Learning to address these choices effectively not only helps in grasping the concepts of basics wealth creation, but also ensures a much happier and wealthy life. By implementing these stated seven principles, I gained confidence and clarity to pursue my financial success.
- Clason, George Samuel. The richest man in Babylon. New York: Penguin books publishers. Print