The book tells a story set in Babylon during ancient times. It’s a parable (a story with lessons in it, like the Bible). As Clason explains at the beginning of the book, they had one of the richest societies in the world. The impregnable walls surrounding the city were 320 feet tall in some places, keeping citizens protected from pillaging armies. This allowed them to grow their wealth in peace and prosperity.The laws of money are like the laws of gravity: assured and unchanging. Money is plentiful for those who understand the simple laws of making money.

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 you the abundance you crave.

THE RICHEST MAN IN BABYLON

Seven Cures For a Lean Purse

After pining over their misfortunes with money, the citizens of Babylon head to Arkad for advice. He’s the aforementioned richest man in Babylon and has seven main tips to share.

1. Start thy purse to fattening (start earning)

• You should save at least 1/10th of what you earn. More if you can afford to do so. You can use that other 90% to pay bills and other expenses. But that 10% is specifically for you to save and invest later on.
• “For you” might be a bit misleading. This isn’t money for you to use however you want, like buying a new phone or upgrading your wardrobe. Rather, it’s money for your future that you need to save until the time is right.
• Resist the temptation to spend any of that 10% for immediate gratification from smaller desires. Keep the eye of your finances on the bigger picture.
• It seems small at first, but gradually, you’ll start to have a good amount set aside. Arkad argues that most people won’t even notice the missing cash from their budget.
• Enjoy life while you are here. Do not overstrain to save.

2. Control thy expenditures (Spend less than you earn)

• When you have extra money, it’s tempting to splurge and buy fancy things… in the Babylonian’s case, new robes or jewels.
• But don’t! Make sure to live within your means and only take on necessary expenses.
• Arkad makes a good point when he says: “What we call ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.”
• Put simply, this means we’ll keep spending more on things we think are necessary but are actually just things we desire.
• Limit the income-related inflation of expenses as much as possible. Don’t confuse necessary expenses with desires.

3. Make thy gold multiply like the Richest Man in Babylon (invest)

• Now that you have some money set aside, it’s time to put it to work. When you invest your cash, it can reproduce and bring you a steady stream of income!
• Arkad calls this making your treasure work for you. 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 you the abundance you crave. In other words, take advantage of compounding interest that can grow your wealth.
• Most people are using that money on things that rust, rot, or deteriorate to a net worth of zero. These include houses, cars, boats, clothing, watches, jewelry, or any merchandise. You’re making someone else rich by doing that.

4. Guard thy treasures from loss (diversify/insure)

• You know those get-rich schemes you see circulating on social media promising you can get rich from nothing? They often sound too good to be true… because they are.
• Arkad warns us there is no way to make massive amounts of money overnight. Instead, it takes time, effort, and knowledge.
• And when you are ready to invest, make sure to start small. You need to learn to secure smaller amounts until you can handle larger ones.
• Arkad ranks security for the principal far better than rapid wealth. He also praises the ability to reclaim your money should you need it back in a hurry.
• Study before making an investment so you can be sure it is a wise one. You won’t get rich overnight… but you will get rich eventually.

5. Make of thy dwelling a profitable investment (Own your own home)

• We all know that buying is better than renting— and not just because you don’t have to worry about getting your security deposit back
• Arkad tells us that “every man should own the roof that sheltereth him and his.” That’s because it can reduce your cost of living and make more money available for your desires.
• Instead of just throwing your money away on rent, you’ll be building equity in an investment. This can pay off big when planning for future income.

6. Insure a future income (Plan for retirement)

• You won’t be young forever, and you won’t always be able to work. So make sure you have a plan for income when it’s time to retire.
• Arkad recommends planning for retirement in advance to ensure your treasures and protect your family. Naturally, having a savings account or retirement pension with a lot of money saved up is great.
• But you can also rent out the property (or hopefully, properties!) that you bought earlier in life. Either way, coming up with a plan now should ensure you’ll be comfortable when you’re older.

7. Increase thy ability to earn (Create multiple streams of income)

• Develop your mindset and your skills! The more wisdom you have, the more you can earn.
• As an example, if you know nothing about real estate, it’s not a good idea to jump in and buy investment properties. First, you’d need to study the market and learn all the complicated terminology. You would also want to seek help from a seasoned investor so they can point you in the right direction.
• Doing all of these things can help you become a better investor and increase your ability to earn. Whatever you do, start small. Eventually, you can go bigger as you learn and become more capable.

A Take on Luck

• Despite many people thinking luck is hitting the lottery or winning big at the slots, it’s not really. Rather, it’s about making the most of opportunity when it knocks at your door.
• People who win large sums of money unexpectedly often lose it all because they don’t know how to handle that. Or, they are afraid to spend it and stash it all away. People act these two ways because they aren’t prepared for wealth. They didn’t earn it, so they don’t have the habits to sustain it.
• That’s where luck comes into play. By taking advantage of opportunities without hesitation, we can create our own good luck.
• For most of us, the number one thing standing in our way is procrastination. You have to be ready to act promptly and decisively.
• Clason uses an example of a livestock trader who had a chance to buy a huge flock at a low price. Instead of closing on the deal right away, he insisted on waiting until morning so he could better inspect the flock. When morning came, other livestock traders heard of the deal and made offers, causing him to miss out on the deal of a lifetime.
• Good luck flees from procrastination. To attract good luck, you need to take full advantage of opportunities. It’s not something you can just wait to happen.

The Five Laws of Gold

These laws were crafted by Arkad and handed down to his son, Nomasir, who had to use them to prove he could make his own way in the way.

The First Law of Gold

• “Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.”
• Translation: When you save part of your income (even if you have a low income), it helps you build up your wealth.
• What you earn is not yours to keep until you invest it properly
• Nomasir took the method of saving 10% of his income, and it worked out great for him.
• If you start with 10% tucked away, you will not even notice the difference. Your quality of life will have no noticeable difference. You surprisingly will learn to live without it.

The Second Law of Gold

• “Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.”
• Translation: When you invest your money, it will multiply so you have more of it.
• What this means to us is to take advantage of compounding interest. This helps your principal keep building as you earn interest.
• It’s not how much you have, it’s how much you keep and how much you keep making in the future
• 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
• Invest in yourself, your skills, or worthwhile business or income generating opportunities.
• The more we know, the more we may earn. The person who seeks to know more of their craft is capable of earning more.
• Treat your money like solders that will bring you more money.

The Third Law of Gold

• “Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.”
• Translation: Leverage the advice of financial experts if you need to when investing your money for more security.
• No one grows up being a financial expert. It takes time, experience, and years of learning. That’s why you should always find someone you can trust when it comes to financial help.

The Fourth Law of Gold

• “Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.”
• Translation: Don’t rush headlong into an investment you know nothing about! It’s just asking for trouble.
• Consider something like cryptocurrency. It takes just a few clicks to buy into this virtual money, but if you don’t understand the ups and downs of the market, you’re putting your investment at risk.
• If you spend or use money based on your own inexperience or emotional urges, you will lose it.

The Fifth Law of Gold

• “Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.”
• Translation: Don’t fall for get-rich-quick schemes or scams. You’ll lose your money.
• There are many people out there looking to scam you, from Nigerian princes to phishing schemes. You might not know who to trust, but do your best to recognize the signs of a trickster so you aren’t taken advantage of.

Four More Parables to Think About

There are four final stories to end the book which illustrate the above cures and laws in action.

1. The Gold Lender of Babylon

• A man named Rodan got 50 coins from the king for a job well done and asked gold lender Mathon for some advice on how to use it. His take?
• His advice was, “When lending, only lend to those you trust, who are knowledgeable in their field and have the means to repay. If possible, you should even consider taking some collateral worth the value of the loan. This winning combination of factors ensures you’ll get your money back eventually.”
• Sure, we might feel tempted to loan a family member money to start a business. But if they know nothing about business, there’s a good chance they’ll fail and you’ll never get repaid.
• If you desire to help you friend do not do so in a way that brings their burdens onto you. There are many ways to help people. You don’t have to choose the ways that restrict your time, money, energy, or ability to care for yourself.
• No man respects himself if he does not repay his debts.
• It’s better to have a little caution than a great regret.

2. The Walls of Babylon

• Babylon is under attack, and the citizens are afraid. All-day long, they ask the guard if things will be alright. The guard assures them all the walls will hold, as they are strong and fortified.
• Babylon does survive the attack, and Clason uses this to illustrate that we need financial security throughout life. You never know when you’ll be under attack – whether you lose your job or have some emergency medical bills.
• Having a financial safety net can help you weather these rough times so you don’t have to sacrifice your prosperity.
• We cannot afford to be without adequate protection.

3. The Camel Trader of Babylon

• Tarkad is in debt to many, when he comes across Dabasir, the camel trader whom he owes money. Dabasir tells his tale of going into debt because of his lavish lifestyle then falling in with robbers.
• He was eventually sold as a slave and was trained as a camel tender. One of his master’s wives, Sira, asks him if he has the soul of a free man or slave. After a while, he realizes he wants to repay his debts, so she helps to free him.
• The soul of a free man looks at the world as a series of problems to be solved. Meanwhile, the soul of a slave whines, “What can I do?”
• During a long desert journey, he almost succumbs, but finds his spirit and makes it back to Babylon, where he works hard to pay off his debts using a precise budget.
• Dabasir’s journey is long and harrowing, but in the end, he makes things right and proves he has the soul of a free man.
• Where the determination is, a way can be found.

4. The Luckiest Man in Babylon

• Sharru Nada is a wealthy merchant prince traveling with the grandson of his deceased partner. The youth has a taste for expensive things and eschews hard work, so Sharru tells him how he used to be a slave.
• He was sold into slavery because his brother killed someone and his father couldn’t pay the bond. He ended up working for a baker, where he made extra pastries and shared the money with his master. It was the ultimate side hustle. He wanted to work hard so he could buy back his freedom.
• Unfortunately, his master gambled all his money, so Sharru was sold again and almost was condemned to a life of hard labor before his friend and fellow slave purchased him. His friend was able to do this because Sharru taught him about the value of hard work.
• The harder you practice, the luckier you get.
• Money accrues surprisingly quickly and debts are gone fast with discipline and consistency.
• Work attracts money and opportunity.
• Hard work can be your best friend in times of distress and help you achieve many things.