Wealth Building Lessons From The Richest Man In Babylon

September 5, 2017

 

Imagine: Babylon, the most reputed & wealthiest city of the ancient world. Not just in terms of its ruling class, but also among a large population who lived in beautiful homes, enjoyed produce from their own gardens, and retired well before they were too old to work.

 

George S. Clason in his 1955 bestseller, The Richest Man in Babylon.The story begins with Bansir, “gazing sadly at his simple home and the open workshop in which stood a partially completed chariot.”Kobbi, a friend and musician, stops by to borrow two shekels. “If I had two shekels,” Bansir replies gloomily, “to no one could I lend them — not even to you, my best of friends; for they would be my fortune. No one lends his entire fortune, not even to a best friend.”Floored by the thought that the two of them haven’t got two shekels between them, they begin to chat on the disparity of wealth in Babylon(sound familiar?), and ponder why they are still poor after years of hard work.

 

They decide to consult with Arkad, the richest man in Babylon.“So rich the king is said to seek his golden aid in affairs of the treasury,” Kobbi says.“So rich,” Bansir interrupts, “that I fear if I should meet him in the darkness of the night, I should lay my hands upon his fat wallet.”“Nonsense,” says Kobbi. “A man’s wealth is not in the purse he carries. A fat purse quickly empties if there be no golden stream to refill it. Arkad has an income that constantly keeps his purse full, no matter how liberally he spends."

Income — that is the thing,” exclaims Bansir. “I wish an income that will keep flowing into my purse whether I sit upon the wall or travel to far lands.” And with that goal in mind, the two old friends go to seek the wisdom of Arkad.

 

The first chapter ends with Basir coming to an important understanding: “The reason why we have never found any measure of wealth,” he says, “is because we never sought it.” When it comes to building wealth, the two most common mistakes people make are: Believing that if they want it badly enough they’ll one day get it. Believing that working harder and longer than their neighbor will achieve it.

 

This was one of the first books I came across as I began to figure out the wealth building mentality. I had heard of it several times, but finally plunged into it after hearing about it again from the Radical Personal Finance Podcast. 

 

I'm still at the beginning of my wealth-building endeavors, and i've already noticed those many people that work 20 or more years working long hours, enduring great stress, and making enormous sacrifices — all to arrive at middle age with very little to show for it. Some memories, some good stories, but virtually nothing in the bank. I came across a story of an executive that worked for non-profit organizations all her life. And another that owned and ran his own business. A third spent 25 years trying to get an import-export business going. All three were smarter, harder-working, and at least as ambitious as I am. Why didn’t they achieve financial independence? Simply: They didn’t seek wealth in the sense that Bansir describes it. They didn’t direct their working lives according to a proven method of wealth building. In pursuit of wealth, most people make foolish mistakes — simple mistakes that add up to a lifetime of disappointment and, ultimately, failure.

 

Becoming good at producing wealth is no different from becoming good at any other skill — singing, acting, surgery, etc. You must develop specific skills. By practicing these skills, you become better at them. As you pair one skill with another, new strengths emerge. Gradually, you change from being a hardworking person who cannot seem to save money, to a wealth-creating dynamo. It’s all about developing specific little habits.

 

It takes 1,000 hours to master painting, dancing, or gymnastics. It takes no more time to master wealth building. You CAN do it. For the first 28 years of my life I worked like an average worker who just showed up to collect a paycheck with no thought to actually providing value. In this although I was apathetic, I was still a cog in helping other men get rich. It was not until I stopped to figure out how I could actually acquire wealth and made that acquisition plan a formal part of my life that things have begun to change for me.

 

In the second chapter of The Richest Man in Babylon, we meet Arkad, “…far and wide famed for his great wealth. He was generous in his charities … with his family … in his own expenses … but nevertheless each year his wealth increased more rapidly than he spent it.” Bansir and Kobbi are not the only wealth seekers asking for his help. Some "friends of younger days," question why fate has singled him out "to enjoy all the good things of life and ignore us who are equally deserving." Arkad says, "It is because you either have failed to learn the laws that govern the building of wealth or else you do not observe them. “In my youth, I looked about me and saw all the good things there were to bring happiness and contentment. And I realized that wealth increased the potency of all of these… When I realized all this, I declared to myself that I would claim my share of the good things in life.” But that desire wasn’t enough. It was not until Arkad learned a lesson about wealth building from his mentor, Algamish, that his fortune changed.

 

 

Algamish told him, "I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.""But all I earn is mine to keep, is it not?" Arkad demanded. "Far from it," Algamish replied. "Can you live in Babylon without spending? What have you to show for your earnings of the past month? What for the past year? Fool! You pay to everyone but yourself. Dullard, you labor for others. As well be a slave and work for what your master gives you to eat and wear. If you did keep for yourself one-tenth of all you earn, how much would you have in 10 years?" “As much as I earn in one year,” Arkad replied.“You speak but half the truth,” Algamish retorted. “Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you. If you would become wealthy, then what you save must earn, and its children must earn, that all may help to give to you the abundance you crave.“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed, the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.”And that was the beginning of Arkad’s journey to wealth.

 

I remember when I signed my life insurance policy the agent told me to pay myself first. At that time I was still not aware of this book, and what that really meant. Now that I am aware of this 've seen the pattern of others entire wealth-building scheme around the principle of “paying yourself first.” It’s an idea that is at the base of many of the best modern wealth-building programs, from Ben Franklin's writings to the principles we espouse in Sweat Nation. The Richest Man In Babylon is now the book I have gifted the most to friends and family. The interesting thing about that is that I can't say that I've seen anything change in any of the people i've bestowed this gift on. Which tells me they haven't read it, and if they have, they aren't applying the knowledge. Always remember, knowledge is not power, it's just the seed for it. Applied knowledge is what grows power!

 

It's very simple. The money you spend on the trappings of wealth — cars, boats, jewelry, etc. — may make you feel wealthy, but they don't add to your wealth; they subtract from it. If you want to increase your wealth, there is only one way to do that: You must save. And if you want to save regularly and well, you should put a portion of your income into savings first — before you spend it on anything else. Reach out to A qualified Sweat Nation Coach. Let's design a plan to grow your mind/body & wealth. Pay yourself first!

 

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