The Richest Man in Babylon

“The Babylonians were clever financiers and traders. So far as we know, they were the original inventors of money as a means of exchange, of promissory notes and titles to property.”

Clason credits the Babylonians with inventing currency, rather than simply trading objects, as well as developing financial strategies people would also recognize today, such as loans and debts. By characterizing the Babylonians as “clever financiers,” Clason legitimizes their practices in the eyes of the reader, furthering his argument that their approach is a source of wisdom for us today.

“Fool! You pay to everyone but yourself. Dullard, you labor for others. A part of all you earn is yours to keep. It should not be less than a tenth no matter how little you earn. It can be much more as you can afford. Pay yourself first.”

Clason’s first piece of financial advice, spoken by Algamish to Arkad, is memorable and clear. Algamish emphasizes the irrationality of paying other professionals, such as clothing makers, but never keeping any income for yourself. By putting his advice in these terms, Clason makes the reader feel they are cheating themselves if they do not put money aside as savings.

“Confuse not the necessary expenses with thy desires. Each of you, together with your good families, have more desires than your earnings can gratify. Therefore are thy earnings spent to gratify these desires insofar as they will go. Still thou retainest many ungratified desires.”

Arkad warns his students about confusing their wants and needs and notes that no amount of spending will satisfy them as there are always more things to buy. Being able to distinguish between needs and wants is an essential part of budgeting, which Arkad tells his students to write down on clay tablets.

“In tilling the soil, in honest trading, in all of man’s occupations, there is an opportunity to make a profit upon his efforts and his transactions…This is because the chances of profit are always in his favor.”

Clason contrasts farming, “honest trading,” and other work that guarantee workers a wage with risky activities like gambling on races or gaming tables. He points out that what many consider “luck” is really just the chances of turning a profit, which are always higher at work than engaging in gambling or hoping to come upon money or treasures. This discussion helps Clason build on his theme of accountability and discipline.

“Good luck fled from procrastination in both these tales. Yet, this is not unusual. The spirit of procrastination is within all men. We desire riches; yet, how often when opportunity doth appear before us, that spirit of procrastination from within doth urge various delays in our acceptance.”

Clason uses two stories to illustrate how procrastinating and overthinking can cause “good luck” to elude us. In doing so, he warns the reader against hesitating when opportunities arise and urges the reader to act when good deals and investments are available.

“The truth is this: Good luck can be enticed by accepting opportunity…Men of action are favored by the goddess of good luck.”

Clason’s concluding words in his chapter about luck again address the relationship between opportunity and luck impress on the reader the importance of becoming “men of action” who take initiative. The author reiterates how, in order to build wealth, people should not be passive or procrastinate and instead make the most out of profitable opportunities when they arise. The author puts a Babylonian spin on this advice by referring to the “goddess” of luck.

“In Babylon it is the custom, as you know, that the sons of wealthy fathers live with their parents in expectation of inheriting the estate. Arkad did not approve of this custom. Therefore, when Nomasir reached man’s estate, he sent for the young man and addressed him: ‘My son, it is my desire that thou succeed to my estate. Thou must, however, first prove that thou art capable of wisely handling it. Therefore, I wish that thou go out into the world and show thy ability both to acquire gold and to make thyself respected among men.’”

Arkad, renowned for both his wealth and his financial wisdom, does “not approve” of allowing children to inherit wealth from their parents without ensuring they understand how to manage it. This quotation reminds the reader that financial success can be short-lived if the beneficiaries are wasteful with money. Clason challenges the reader to understand Arkad’s view which, although strict, ultimately benefits his son and the rest of the family.

“Yet, who can measure in bags of gold the value of wisdom? Without wisdom, gold is quickly lost by those who have it, but with wisdom, gold can be secured by those who have it not, as these three bags of gold do prove.”

Arkad’s son, Nomasir, comes to agree with his father that financial wisdom is even more valuable than the wealth it helps to generate. He admits that by ignoring his father’s wisdom at first, he lost all of his wealth, even selling his clothing to get food. Nomasir’s dramatic riches-to-rags-to-riches story persuades the reader to pay close attention to Clason’s “Five Laws of Gold” as explained in the chapter.

“In the strength of thine own desires is a magic power. Guide this power with thy knowledge and of the five laws of gold and thou shall share the treasures of Babylon.”

Through the parable’s narrator, Kalabab, Clason continues to emphasize the reader’s agency in identifying and pursuing their “own desires” for wealth and financial stability, even romanticizing it with the term “magic power” (54). However, he remains pragmatic about how this “magic” and “desire” must be combined with practical financial habits by following the ‘laws of gold’ in order to yield success.

“Gold bringeth unto its possessor a responsibility and a changed position with his fellow men. It bringeth fear lest he lose it or it be tricked away from him. It bringeth a feeling of power and ability to do good. Likewise, it bringeth opportunities whereby his very good intentions may bring him into difficulties.”

Rodan’s mentor, Mathon, tells him that while it is good to earn money, becoming wealthy can significantly change one’s social dynamics. Here, Mathon points out the connection between having power and “the ability to do good” and having more responsibility. He also acknowledges the anxiety some wealthy people feel about safeguarding their wealth for the future. This quotation is the first time Clason discusses the possible burdens of becoming wealthy and the difficult dilemmas that people with money sometimes face. Doing so adds some nuance to his work and helps the reader navigate their feelings of obligation to others.

“Just this: If you desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself.”

Mathon warns Rodan to not help his family members by assuming their financial burdens himself. By including the parable about the animals Clason creates a distinction between helping others who will work to lift themselves up and doing others’ work for them. The ending to Mathon’s parable suggests that assuming others’ burdens will lead to resentment and a breakdown of the relationship while not solving the original issue.

“I do not wish to take risk of losing my gold for I have labored much and denied myself much to secure it. Therefore, I will no longer lend any of it where I am not confident that it is safe and will be returned to me. Neither will I lend it where I am not convinced that its earnings will be promptly paid to me.”

Clason’s main advice from Chapter 7 is summed up in Mathon’s words to Rodan. Mathon advises Rodan to only lend money to reputable people who will be able to repay their loans. This advice echoes Clason’s recommendations to only invest money with reliable professionals that you know well and builds on his theme of caution and research in financial decision making.

“Better a little caution than a great regret.”

Managing risk is one of the most important and variable aspects of success in business and investing. Mathon’s parting words to Rodan reiterate the importance of caution when both borrowing or lending money and emphasizes how consequential these actions can be for people’s financial health. Clason emphasizes relying on evidence, such as someone’s business history, rather than emotional ties to make wise financial decisions.

“The walls of Babylon had once again repulsed a mighty and vicious foe determined to loot her treasures and to ravish and enslave her citizens. Babylon endured century after century because it was fully protected. It could not afford to be otherwise.”

Clason reminds the reader that Babylon’s success did not go unchallenged and that without the strong protection of its fortifications and efforts of its army, it would not have “endured century after century.” The Babylonians rightly saw this protection as a necessity for their city. Clason’s story about the life-or-death stakes for Babylon heightens the drama of his recommendation to the reader to protect their savings with secure accounts and insurance.

“Ill fortune!...Ill fortune pursues every man who thinks more of borrowing than of repaying.”

Here, Clason build on his theme of accountability and responsibility. Clason uses Tarkad’s issues with debt as a reminder to the reader that what people think of as “luck” or “fortune” is actually based on their actions. Deeply in debt, Tarkad feels that he has bad luck, and Dabasir’s story urges him to take responsibility for his choices and not complain.

“With a new vision I saw the things that I must do…My debts were my enemies, but the men I owed were my friends who trusted and believed in me.”

Dabasir recounts how he realized that he should see his debts, not his creditors, as his “enemies” and that only he can solve the problems he had created. This realization prompts him to feel that he has the “soul of a free man” since he is ready to identify and solve his problems instead of pitying himself. This storyline helps Clason reiterate his point about being accountable for our actions.

“But he doth further enjoin the greatest care that we spend not greater than seven tenths of what I earn for these worthy purposes. Herein lieth the success of the plan. I must live upon this portion and never use more nor buy what I may not pay out of this portion.

In one of Dabasir’s journals, he details the plan that Mathon, the moneylender, told him to follow. He reiterates that he and his wife must live on 70% of their income for his financial plan to work. This passage gives Clason an opportunity to concisely restate his main piece of advice about income management.

“Now that Mathon doth show me how I can repay my debts in small sums of my earnings, do I realize the great extent of my folly in running away from the results of my extravagances.”

Dabasir’s narration persuades the reader that avoiding debt only makes their financial problems worse and that the best way to tackle it is to pay it off slowly over time. Dabasir’s reference to his “extravagances” reminds the reader of Clason’s warning not to live beyond their means and to ignore their short-term desires to in favor of pursuing their long-term goals.

“He would like to do something for this grandson, but the more he considered this, the more difficult it seemed because of the youth himself. Eyeing the young man’s rings and earrings he said to himself, “He thinks jewels are for men, still he has his grandfather’s strong face. But his grandfather wore no such gaudy robes. Yet, I sought him to come, hoping I might help him get a start for himself and get away from the wreck his father has made of their inheritance.”

Clason’s description of the young Hadan reinforces his generalizations about young people’s tendency to spend money unwisely. Mentioning his jewels and beautiful clothes helps Clason portray Hadan as someone who takes money for granted and spends it recklessly. Comparing Hadan to his grandfather, who did not wear “gaudy robes,” shows Clason’s belief that generational wealth weakens a person’s character and work ethic.

“Better to treat it like a friend, make thyself like it. Don’t mind because it is hard…Remember, work, well-done, does good to the man who does it. It makes him a better man.”

When Sharru receives this advice from another enslaved friend, he takes it seriously, and later credits this approach with helping him to rise from poverty to success. Working hard helps him build a positive relationship with the family who purchases him and also attracts the attention of a future friend and business partner. Clason emphasizes that hard work is character-building, particularly for men.

“I honor him for rising above misfortune and becoming a leading citizen of Damascus. Art thou, his grandson, cast of the same mold? Art thou man enough to face true facts, or dost thou prefer to live under false illusions?”

Sharru chastises Hadan for being ashamed of his grandfather’s previous enslavement. By emphasizing the hard work his grandfather put into becoming a self-made man, Clason bolsters his theme of the importance of a strong work ethic and discipline. In questioning Hadan’s commitment to hard work, Sharru also challenges Hadan’s masculinity.

“Was it work that brought Megiddo success, or was happiness and success merely in the laps of the Gods? Was I to work the rest of my life without gaining my desires, without happiness and success?”

When Sharru is unfortunate enough to have been sold to a cruel slave owner and taken away from his business, he questions whether hard work really pays off. He considers the idea that good fortune happens by chance. By including dramatic obstacles for Sharru to endure and overcome, Clason emphasizes his argument that everyone should work as hard as they can as it is the only way to become “lucky.”

“Then Hadan Gula questioned, “Was work my grandfather’s secret key to the golden shekels?” It was the only key he had when I first knew him,” Sharru Nada replied. “Thy grandfather enjoyed working. The Gods appreciated his efforts and rewarded him liberally.”

Sharru’s story impresses Hadan, who is young and spoiled. By demonstrating how much he and Hadan’s grandfather accomplished by working hard, Sharru helps destigmatize work and makes it sound noble and manly. These conversations help Clason persuade the reader to see work as a necessity they should enjoy rather than something they look down on.