Book Summary - The Richest Man In Babylon by George S. Clason

The Richest Man In Babylon is an interesting book written by George S. Clason. The book nicely presents the techniques to establish financial goals and relates it to the ancient Babylon time. The techniques presented are equally applicable in today's time. The book is widely recognized - Good Reads (4.3/5.0 from 150K ratings), Audible (4.8/5.0), Barnes and Noble (4.2/5.0).

The first chapter is little boring but the second chapter onwards is pretty interesting. I found the five rules of gold as the core summary of the book. We can relate the term "gold" with any wealth, such as money, silver, copper, house, or any equivalent assets that can be invested and grown.

Five rules of gold:

1. Rule 1: Gold comes gladly and in increasing quantity to any person who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. The main idea is to ensure that we invest at least ten percent of our income.
2. Rule 2: Gold labors itself diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. The main idea is to re-invest the earnings from investment. If our investment yields some earnings, we should try to re-invest so that we can get the benefits of compounding increment.
3. Rule 3: Gold clings to the protection of the cautious owner who invests it under the advice of men wise it its handling. If we need to make an investment, first we need to seek advice from experts in the relevant area. Investing in a company should be followed by a good understanding of its business not by just following the crowd.
4. Rule 4: Gold slips away from the man who invests it in business or purpose with which he is not familiar or which are not approved by those skilled in it. If we invest in a business which we are not familiar with or whose business goals and strategies are not clear to us, then we risk of losing our investment.
5. Rule 5: Gold flees the man who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. We should not target impossible earnings. We should not follow the advice of person who is not expert in the advised area.