Richest Man in Babylon 1 – Arkad

Richest Man In Babylon

Today’s post is our first visit to a new book, The Richest Man in Babylon by George Clason.

Richest Man in Babylon

I don’t know much about the book – or Clason, or indeed Babylon – other than that a lot of people on the internet recommend it.

  • That is not always a guarantee of quality, and since the book was first published in 1926, I have my doubts – but let’s see.

Clason was born in Missouri in 1874 and after a spell in the army, worked a career in publishing.

The book is based around a series of financial pamphlets by Clason which were handed out by banks and insurance companies, and so became well-known.

  • For some reason, Clason chose to set his book in ancient Bablyon:

The cradle in which was nurtured the basic principles of finance now recognized and used the world over.

Babylon became the wealthiest city of the ancient world because its citizens … appreciated the value of money … practised sound financial principles [and] provided for themselves what we all desire … incomes for the future.

Which is all news to me.

The book uses archaic, biblical-style language, which doesn’t make my job any easier.

  • It claims to describe a set of universal and unchanging laws which will steer you away from a lean purse and towards a fat purse.

Here are the seven “cures” which the book is based around:

  1. Start thy purse to fattening
  2. Control thy expenditures
  3. Make thy gold multiply
  4. Guard thy treasures against loss
  5. Make of thy dwelling a profitable investment
  6. Ensure a future income
  7. Increase thy ability to earn

Babylon was by the Euphrates, in present-day Iraq, and relied on the river to fertilise its soil.

Babylonian engineers diverted the waters from the river by means of dams and immense irrigation canals. By means of an elaborate drainage system they reclaimed an immense area of swamp land at the mouths of the Euphrates and Tigris Rivers and put this also under cultivation.

Clason also points out that the city had no desires to build an empire, and that its wars were “local and defensive”.

  • Though Babylon is long gone, Clason assures us that:

Money is governed today by the same laws which controlled it when prosperous men thronged the streets of Babylon, six thousand years ago.

The Man Who Desired Gold

The book includes a series of stories or parables, the first of which is about a man who desired gold (presumably a fairly common desire at the time).

Bansir is a chariot builder who despite needing money, finds it hard to motivate himself to build another chariot.

  • He’s had a dream in which he was rich.

He tells his friend Kobbi the musician that he can’t understand why he is still poor after a lifetime of hard labour.

  • He is little better off than the King’s slaves.

They discuss their old friend Arkad, who has become rich.

  • Indeed, he is the Richest Man in Babylon after whom the book is named.

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.

They decide that Arkad knows a secret about how to secure an income.

  • And he must have taught it to his son Nomasi, who is now one of the richest men in the nearby city of Ninevah.
See also:  Richest Man in Babylon - The Lessons

They decide to ask Arkad, who gives them tough love:

If you have not acquired more than a bare existence in the years since we were youths, it is because you either have failed to learn the laws that govern the building of wealth, or else you do not observe them.

He warns against both spending all your money and against hoarding it.

  • Arkad explains that he learned the secret of money from Algamish, the moneylender, in return for copying a stone tablet under a deadline:

I found the road to wealth when I decided that a part of all I earned was mine to keep.

This sounds like Pay Yourself First – Algamish told Arkad to save at least 10% of all his earnings.

  • It also implies living within your means.

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.

Do not buy from the clothes-maker and the sandal-maker more than you can pay out of the rest and still have enough for food and charity and penance to the gods.

Wealth, like a tree, grows from a tiny seed. 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.

But saving was only part of the solution – wise investments were also needed.

  • And for that expert advice was required.

Advice is one thing that is freely given away but watch that you take only what is worth having. He who takes advice about his savings from one who is inexperienced in such matters shall pay with his savings.

Akrad makes all the possible mistakes – investing with fools, spending his profits rather than investing – but eventually, he learns from them.

After four years, Algamish – by now an old man – makes Arkad a partner in his business, sending him to Nippur to look after his interests there.

And when Algamish dies, Arkad inherits a share of his estate.

Arkad has a few other lessons, the first about willpower and habit:

When I set a task for myself, I complete it. Therefore, I am careful not to start difficult and impractical tasks, because I love leisure.

He also explains that wealth creation is limitless:

If a rich man builds him a new palace, is it not worth all it cost? And is the ground upon which it stands not worth more because it is there? And is the ground that adjoins it not worth more because it is there? Wealth grows in magic ways.

And that some things are too good to be true:

Invest thy treasure with the greatest caution that it be not lost. Usurious rates of return are deceitful sirens that sing but to lure the unwary upon the rocks of loss and remorse. A small return and a safe one is far more desirable than risk.

Arkad is also a fan of insurance:

Provide also that thy family may not want should the Gods call thee to their realms. For such protection, it is always possible to make provision with small payments at regular intervals.

The seven cures

In the next parable, King Sargon asks Arkad to set up a school to teach the seven cures for a lean purse.

See also:  Richest Man in Babylon 3 - 5 Laws
Cure 1 – Start thy purse to fattening

The first cure is to save at least 10% of your income:

For every ten coins, thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul.

Which desirest thou the most? Is it the gratification of thy desires of each day, a jewel, a bit of finery, better raiment, more food; things quickly gone and forgotten? Or is it substantial belongings, gold, lands, herds, merchandise, income-bringing investments?

The coins thou takest from thy purse bring the first. The coins thou leavest within it will bring the latter.

That’s it for today – we’ll cover the remaining six cures next time.

  • We’re about a quarter of the way through the book already, so I expect to complete this series in another three articles (plus a summary).

Until next time.

Mike is the owner of 7 Circles, and a private investor living in London. He has been managing his own money for 40 years, with some success.

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Richest Man in Babylon 1 – Arkad

by Mike Rawson time to read: 4 min