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The Richest Man in Babylon


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#1 HollandPark

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Posted 24 June 2007 - 09:47 AM

If you havent heard ir before, it should be worth a listen:
http://radio.goldseek.com/ :; part 2

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The tale of Arkad, the richest man in Babylon - about 11 minutes into the podcast.

What did he learn:

+ A tenth of what you earn is yours to keep - ie spend less than you earn, save for the future

+ Tke investment tips from those with appropriate expertise

#2 HollandPark

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Posted 24 June 2007 - 09:52 AM

Book Review: The Richest Man in Babylon
Posted: March 3rd, by dan
A few years ago, I picked up The Richest Man in Babylon by George S. Clason because I was interested in learning about money. It’s an amazing subject really, and I wanted to know more about it. The book more than fulfilled my hopes.

Written in 1926, the book is a collection of stories set in ancient Babylon, chosen because many of the financial principles still in use today originated there. The book opens with the story of Bansir and his friend Kobbi. Both have worked hard for many years and yet seem to have nothing to show for it. As they discuss how they would like to possess some of the riches they see around them, Kobbi asks what I consider to be a question so obvious I was surprised it had never occurred to me, “Might we not find out how others acquire gold and do as they do?”

They decide to visit their old friend Arkad, who began life much the same as they, but has amassed such a fortune as to be considered the one of the richest people in Babylon. Arkad welcomes them and is glad to hear their request. When they ask why he is rich when they are not, he replies, “You have either failed to learn the laws that govern the building of wealth, or else you do not observe them.” The rest of the story contains Arkad’s advice about the basic principles of financial prosperity:

+ Start thy purse to fattening
+ Control thy expenditures
+ Make thy gold multiply
+ Guard thy treasure from loss
+ Make of thy dwelling a profitable investment
+ Insure a future income
+ Increase thy ability to earn

As far as I can tell, George Clason is the originator of the idea of paying yourself first, the first principle in the above list, which had never really made sense to me. However, I realized that most of what I earn, and I suspect this is true of nearly everyone, is spent on stuff. Housing, clothing, food, utilities, entertainment, taxes, children, travel. The list is endless. Arkad puts it better than I: “A part of all you earn is yours to keep.” He suggests that it should be no less than 10% of our incomes. Yes, saving 10% of my income every month definitely started my purse to fattening.

The story continues with further details and examples, as told by Arkad, of the other principles of financial prosperity. There are more stories covering luck, opportunity, debt, investing, lending, insurance and work. Having just re-read the book, I am still amazed by how useful, and profitable, old Arkad’s advice has been.

One of the other eye-opening passages from the book is about the creation of wealth. I must have re-read it four or five times in a row:

“Wealth grows wherever men exert energy. If a rich man builds him a new palace, is the gold he pays out gone? No, the brickmaker has part of it and the laborer has part of it, and the artist has part of it. And everyone who labors on the house has part of it. Yet when the palace is completed is it not worth all it cost? And is ground upon which it stands not worth more because it is there? Wealth grows in magic ways. No man can prophesy the limit of it.”

So why read a book about the basic principles of financial success? As Mr. Clason says in the forward to the book, “Our prosperity as a nation depends on the personal financial prosperity of each of us an individuals.” In addition, I like the idea of having enough for myself and to spare. Enough to enjoy the good things in life without worrying about running out of money. Enough to give some away too.

I’ve read over 15 books on finance and investing and The Richest Man in Babylon is one of two that I recommend reading as a foundation for financial success.

@: http://www.danandcheryl.com/wealth

======

in places like japan and china, everyone saves.
but in the uk and the us, most everyone spends beyond their means.
think of the long term implications

#3 Commander T

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Posted 25 June 2007 - 10:57 AM

Excellent listening - i ve heard a part of it. i will listen again and comment

^ My words do not constitute financial advice, please do your own research.

 

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#4 DrBubb

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Posted 25 June 2007 - 04:27 PM

A great starting point for those who are just beginning to save and invest.

Lays down some key concepts
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#5 OzzMosiz

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Posted 27 June 2007 - 02:12 PM

removed as I read it completely wrong :-)

#6 harvipark

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Posted 29 June 2007 - 12:23 PM

I have listened to this podcast around 3 times now. Great story which highlights the benefits of compounding has on your investments and explained in laymans terms

A "must listen" for us investment novices

#7 Commander T

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Posted 29 June 2007 - 12:45 PM

the problem lies with asking experts what to invest in - e.g off plan properties in spain at the height of the boom. I dont believe it is so easy

^ My words do not constitute financial advice, please do your own research.

 

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#8 DrBubb

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Posted 29 June 2007 - 12:49 PM

the problem lies with asking experts what to invest in - e.g off plan properties in spain at the height of the boom. I dont believe it is so easy


are those "experts", or people with a vested interest?

Thank goodness, there are some that really have their clients interests in mind.
FP, who works hard as an expert to help his clients make money, would never advise such madness
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#9 Arn

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Posted 29 June 2007 - 03:12 PM

I agree with many of the comments on here regarding this book. I thought is was very good.

After reading this I found the Rich Dad/Poor Dad formula to be a copy with so much spun out and repeated in order to create as many sales opportunities for themselves.

Arn

#10 Commander T

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Posted 01 July 2007 - 09:00 PM

are those "experts", or people with a vested interest?

FP, who works hard as an expert to help his clients make money, would never advise such madness


how does one get to FP services - does he have a website?

^ My words do not constitute financial advice, please do your own research.

 

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#11 DrBubb

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Posted 02 July 2007 - 09:27 AM

After reading this I found the Rich Dad/Poor Dad formula to be a copy with so much spun out and repeated in order to create as many sales opportunities for themselves.


Right.
If you read one of Kiyosaki's books, you have read them all
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#12 harvipark

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Posted 08 September 2007 - 10:59 PM

PDF Download

http://www.luinc.com...aninbabylon.pdf

#13 DrBubb

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Posted 09 September 2007 - 01:23 AM

PDF Download


Great find, Harvipark! That's a PDF with the whole book, in 10 chapters.

It includes things like:

The Five Rules of Gold: (as paraphrased by DrB):

1. Gold cometh to the man who puts at least 1/10 of his income aside
2. Gold (ie Investment wealth) mutiplies for the man who invests wisely
3. Get advice from "wise men" (true experts with experience) when investing
4. Dont gamble away your wealth on speculative schemes, or investments you do not understand
5. Seeking impossible rates of return, or following romantic ideas often favored by the inexperienced,
is a great way to lose money
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#14 harvipark

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Posted 06 October 2007 - 11:39 PM

Great find, Harvipark! That's a PDF with the whole book, in 10 chapters.


Not quite my "find"

Followed a link in notanewmember's sig

#15 DrBubb

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Posted 07 October 2007 - 02:46 AM

A BIT MORE history on this book - in this note from Wikipedia

The Richest Man in Babylon is a book by George Samuel Clason which dispenses financial advice through a collection of parables set in ancient Babylon. Through their experiences in business and managing household finance, the characters in the parables learn simple lessons in financial wisdom. By basing these parables in ancient times, but involving situations that modern people can understand and identify with, the author presents these lessons as timeless wisdom that is as relevant today as it was back then.

The book began in 1926 as a series of informational pamphlets. Banks and insurance companies began to distribute these pamphlets, and the most famous ones were eventually compiled into this book. It was most recently reissued by Signet in 2004, and an updated version (using modern English instead of "King James" language) was issued by BN Publishing in March 2007. According to the 2002 edition book cover, more than two million copies have been sold.


Chapters
Foreword
The Man Who Desired Gold
The Richest Man In Babylon
Seven Cures For A Lean Purse
Meet The Goddess Of Good Luck
The Five Laws Of Gold
The Gold Lender Of Babylon
The Walls Of Babylon
The Camel Trader Of Babylon
The Clay Tablets From Babylon
The Luckiest Man In Babylon
An Historical Sketch Of Babylon

/source: http://en.wikipedia...._Babylon_(book)

Here's a detail summary of each chapter:
http://www.deepjava....Book_Review.jsp

Example/ from Deepjava:

The Gold Lender of Babylon

Rodan the spearmaker of old babylon is awarded with fifty pieces of gold. Rodan is looking for advice to lend 50 pieces of gold to his sister's husband or not.
Mathon is only visted by men in need of gold or men returning gold. Mathon is delighted to see somebody visiting him for an expert advice.
Mathon shares "Gold bringeth unto its possessor responsibility and a changed position with his fellow men. It bringeth a 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."
Nineveh story of donkey and ass with moral "If you desire to help thy friend, do so in a way that will not bring thy friend's burden upon thyself."

Rodan is curious if gold borrowers pay back.
Mathon shows the chest of tokens he collects from gold borrowers.
Safest loans are those whose possessions are of more value than the one they desire. They own lands , or jewels, or camels, or other things which could be sold to repay the loan.
Other Safe loans are those who have the capacity to earn. They labor or serve and repay. They have income and if they are honest and suffer no misfortune, they also repay. These loans are based on human efforts.
Other are those who have neither the property nor assured earning capacity. Some of them who cannot adjust themselves fail to repay.
"Be not swayed by foolish sentiments of obligation to trust thy treasure to any person. If thou wouldst help thy family or thy friends, find other ways than risking the loss of thy treasure. Forget not that gold slippeth away in unexpected ways from those unskilled in guarding it. As well waste thy treasure in extravagance as let others lose it for thee.
Seek to associate thyself with men and enterprises whose success is estabilished that thy treasure may earn liberally under their skillful use and be gaurded safely by 'their wisdom and experience.
BETTER A LITTLE CAUTION THAN A GREAT REGRET.

(Maybe some Sub-prime lenders should have taken this advice)
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#16 DrBubb

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Posted 07 October 2007 - 03:08 AM

(here are some Reviews from Amazon, and some other suggestions):

1/
Success in finance, September 22, 2007
By Ilya Grigorik (Toronto, ON, Canada) - See all my reviews

An inspiring classic, and yet another testament to the fact that human follies and sound advice are timeless. Whether you're a slave in Babylon, or a modern banker, the principles are all the same: pay yourself first, save at least one tenth of your income, look for opportunity, work hard, and be wise in your investments. Passed on for centuries, it is surprising how few people use these maxims, and yet the successful stories are almost always based on them. For the hundred pages that it is, "The Richest Man in Babylon" may well be the most complete financial guide to date.


2/
The Secret of Having Good Luck, August 25, 2007
By Charles Prosper "author of The SecretRevealed... (Los Angeles, CA) - See all my reviews


The Richest Man in Babylon is a fable that lucidly illustrates why some men attract wealth and success almost effortlessly while others struggle for a lifetime and get nowhere. If you want the secret of the Midas touch and to have the "luck of the Irish", then you will find what you are looking for in this little book. You could easily read it in one sitting and be changed forever. Get it. It is absolutely delightful!

Other books on this genre that you will enjoy equally as well are:

Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Finish Rich Book Series):
http://www.amazon.co...9314297-4650438

The Power of Perpetual Income (Wealth Building Volume 2) How to transform your spare time into a cash machine. :
http://www.amazon.co...9314297-4650438

Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth :
http://www.amazon.co...9314297-4650438
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#17 Commander T

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Posted 07 October 2007 - 06:16 AM

http://www.manarin.c...aninBabylon.pdf

alternative link to pdf file

^ My words do not constitute financial advice, please do your own research.

 

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#18 HollandPark

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Posted 10 December 2007 - 07:06 AM

(From an HPC thread on "What have you learned from the Property Boom" ):

The WORLD IS MY OYSTER approach to investing

I've learnt a few things.

- Never underestimate the "spending" wants of your wife/partner. If she sees "spare" money, it will drive her demented until a portion of it is spent on new curtains, kitchen etc. Anyone who gets married remember this well. Financial planning for the future will always come across to your partner as "you being mean". Also, always spread risk.


The way to solve this...
Is to be jointly responsible for earning and spending. In other words, you have to impress it on your partner, that if she wants to spend more money, she has to take some responsibility for earning (or saving) more money. If you have a partner who does not work, you have taken the first step towards a lop-sided relationship, where one partner earns, and the other spends. This is a formula for disaster, unless you have a very unusual partner. Most will slip right into the role of home-keeper and spender, and then you are most-likely stuck earning the money to fund dreams that may not be your own - the ultimate financial trap!

One way to beat the trap is to be ruthless about budgetting, and regularly "pay yourself", by putting money regularly into savings and investment. And then DECIDE JOINTLY how that moeny will be invested. These investments may be a good source of income for future retirement, and /or also enhance your living standard in future years.

This is an old lesson that is worth relearning, Listen to an excellent podcast on "paying yourself first" called
The Richest Man in Babylon
= =

- Never "Wait" for houses to crash. If you know you are not going to buy in 4 years time or so and you are in a boring job. change things! Work abroad or change life direction - Life is far too short to waste it "waiting". What I'm trying to say here is for FTBs. Bear in mind that while "waiting" for a house price crash, you are supporting the current boom with your savings! Use the money in a more interesting fashion but don't waste it. e.g. Work in Europe, America, Australia etc


I agree that it would be frustrating and silly to spend years "just waiting".
Through loads of hard luck, and a certain amount of luck, I have found two investment areas that have vastly outperformed UK property. They are:

+ Gold mining shares (since 2001), and
+ Hong Kong property (since early 2007- though I could have started earlier)

The result of discovering these investment areas is that I could now rather easily buy 4-5 or more properties of the type that I sold in 2001 - which allowed me to make a start investing in alternative areas. I'm sure there must be many areas that I missed (like Emerging market stocks, for example.) Compare this with the situation where I would be if I was passively sitting on my STR cash since 2001. Then I would be perhaps 30-50% behind in my investing with the value of the property-sold something like 40% ahead of an STR fund invested in just cash. In such circumstance, t would be painful "waiting" for a 25-30% drop to get back where I started.

But thankfully, I chose "the investment world is my oyster" approach and found better investment opportunities elsewhere, rather than waiting passively. I believe others should aim to do the same- educate themselves on savings and investing, whenever they consider shifting their main asset base out of property. A serious study of cycles, may help you get on the right path, if you adopt the non-passive "world is your oyster" approach.

#19 DrBubb

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Posted 13 December 2007 - 11:00 AM

Slightly off-topic:

The World's Ten Richest / at end 2006:


It is interesting to think about:

+ How they made their money
+ The large number who are North Americans, and from the USA
+ How long will it stay that way ?

Already, Carlos Slim of Mexico has surpassed Bill Gates as the world's richest:


How long before a Chinese, an Arab, or a Russian is number one ?
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#20 Silent reader

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Posted 11 January 2008 - 08:22 PM

Well i've just finished reading "The Richest Man in Babylon" and even though i have little of interest to add to this thread i will say that not only is this a great book, but all 144 pages are easy to understand.

for what it's worth, I would recomend this book. and as a matter of fact ...... i think i'm going to buy my Mother a copy.

:)
Quite an experience to live in fear, isn't it? ..................... That's what it is to be a slave.

We all have one thing in common… everyone dies, but not everyone gets to live. REVEL in your time !




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