Book Review of The Richest Man in Babylon by George S Clason
The Richest Man in Babylon by George Clason is widely regarded as one of the most beneficial personal finance books of all time. When I decided to read it, I understood that the book was primarily a mindset book, and not by any means a step by step guide to wealth. Despite this not offering what many people may look for in a wealth building book, the mindset and principles outlined in this book are critical to the wealthy mindset. It has been said that if you take a millionaire and take away all his money, he will become a millionaire again, and if you give a poor person millions, they will more than likely lose it all. This concept proves you must have a millionaire mindset to become wealthy, and this book can help teach you how to attain this mindset.
All lessons taught in The Richest Man in Babylon are taught through the style of a novel. There are several different lessons taught throughout different stories, involving the main characters Arkad, Bansir, and Kobbi.
This was one of the first books to outline the principle of "Pay yourself first". By paying yourself first, you are automatically saving 10% of your income, and then living off what is left. This is the opposite of what many people do, which is spend what they have to, and then save whats left (if anything).
Other principles discussed include always putting your money to work for you by investing, and only invest in investments that you are familiar with and understand the risks. A recommended investment by Clason is to purchase your own home, which creates an asset. Despite the fact that this financial tip has been discussed for years, there are actually quite a few financial gurus and experts who tend to disagree with it. Personally I do not believe that a primary residence is an asset, as it takes money out of your pocket instead of putting money into it. However, I still believe in owning a home, just being responsible about it and understanding that it is not truly an investment.
The book also goes over several other life lessons and money management techniques, as outlined by Clason. Despite the theme of this book and the time period in which this book is taking place, all of the outlined principles can assist you in creating a stable financial future for yourself.
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