The Richest Man in Babylon: Summary & Review

the richest man in babylon book cover

The Richest Man in Babylon shares basic personal finance advice through a collection of parables set 8,000 years ago in ancient Babylon.

Bullet Summary

  • Save money
  • Invest money
  • Protect your capital

Full Summary

About The Author:
George S. Clason was an American soldier, businessman, and author.
He wrote several personal finance parables that were distributed by banks and insurance companies. The most popular ones were collected together to form what’s known today as “The Richest Man in Babylon“, the work Clason is most famous work.

1. Spend Less Than You Earn

Clason recommends you save at least 10% of your income.

The richest people save much more, but starting with 10% is achievable for anyone and requires little adjustment in the quality of life.

It’s not how much you make, it’s how much you keep

2. Invest Your Money

Invest your savings so that it starts generating further income.

The book mentions the compound effect, also espoused by books such as Money Master the Game and Unshakable.

3. Cut Your Expenses

Most books focus on making more money, but “The Richest Man in Babylon” says that decreasing your expenses will be a quicker win for most people.

The message basically is: sure, think of how you can make more money. But get that low-hanging fruit right away and eliminate all unnecessary expenses.

4. Stick to What You Know

Do you when people lose the most money?

It’s when they have discretionary money and feel like they can “risk a bit more”

As your money grows, you will be tempted to invest in the coolest new stuff and try out riskier investment vehicles.


Stick to investing in what you know and what you can control well.

5. Cap Your Downsides (With Insurance)

Don’t put your money in any position where it can be wiped out.

Gambling, for example, doesn’t allow you to cap your downsize as you risk losing all the money you gamble.

To avoid endangering your capital, get insurance.

6. Buy, Don’t Rent

If you are renting, you’re flashing money down the drain.

Buy a house instead and transform it into an income-generating machine by renting it out.

If you’re interested in buying cheap, also read:

8. Assure Future Income

What if your present income dries out?

You never know when you won’t be able to work anymore, or when you won’t want to work anymore.

That’s why you need to set up systems that will ensure an income without you doing anything.

My Note:
I don’t believe much in “systems ensuring an income” without you doing anything”.
There is no such system that can “guarantee” an income.

9. Never Stop Learning

Never assume you know everything about your trade and your investments.

Keep an open mind and always keep learning. The more you know, the more money you can make.

the richest man in babylon book cover

Real-Life Applications

Think Twice Before Buying Something

Most purchases we make, we don’t really need. I got so much stuff around me I barely used. Always ask yourself if you really need it before buying it.


I loved the parables format.

Yet there are a few cons common to most personal finance books:

  • Similar ideas repeat over and over

The concepts are very similar among books on personal finance, including The Total Money Makeover, The Millionaire Next Door, I Will Teach You To Be Rich, and Rich Dad Poor Dad.

  • Conservatively slow lane

Just like almost all other basic finance books, The Richest Man in Babylon espouses the compound interest.

This is valid, but it’s based on the concept the market will always go up, which is far from a foregone conclusion (read Fooled by Randomness). And even in the best-case scenario, it will anyway take decades to make you rich -if ever-.

And it’s more about real estate than entrepreneurship. Read the great The Millionaire Fastlane for a different approach and mindset.

  • The old-school words and pronouns can get grating

I understand the book wants to use parables and give an “old wisdom feeling”, but it can be annoying reading too many times words such as “thy”, “thou” etc.


  • Covers all the basics

While I write above that many similar concepts repeat across many similar books, it’s also true these concepts are basics personal finance tenets anyone should know about.

  • Great mindsets

I liked how The Richest Man in Babylon shares not just tips and laws, but also key mindsets. Such as stop wishing for big lump sums of money and focus instead on work and on achieving an increasing cash flow.


The Richest Man in Babylon” is a good book for beginners on basic personal finance tenets and mindsets.

If you’re a beginner and haven’t encountered anything similar before, then grab yourself a copy.
If you know already all the basics of personal finance, focus on applying rather than reading more.

Read more summaries or get the book on Amazon

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