In the United States of America, there are over 500,000 people that work in the diet and fitness industry. The funny thing about that is the fact that almost all of the advice concerning health could boil down to one sentence: either “exercise more and eat less” or “consume fewer calories than you expend.” Everything else is a derivation or a specific look at that principle. The entire industry is built upon a permutation of that principle.
Personal finance and investing is much the same way. Even though it is a crowded space (I can only imagine how many finance writers and investing advisors exist in the United States alone), the message is not terribly complex. A successful financial life all boils down to one thing: spend less than you earn, and do something intelligent with that surplus. My website is dedicated to advocacy of documenting why high-quality blue chips can be the intelligent thing to do with that surplus.
For investors looking for a summer “lounge by the pool” read about the philosophy and wisdom behind spending less than you earn and doing something intelligent with the surplus, I would recommend the book “The Richest Man in Babylon” by George Clason to you. If you are at the intermediate stage of your investing life and you have been setting aside $500+ per month for years on end, this book is probably not going to give you a groundbreaking education on anything. But Clason is a poet, and his work is an enjoyable read.
The work is a series of parables (imagine reading a collection of Aesop’s fables or the personal finance version of The Federalist Papers) that accompanies different Babylonian characters on their respective journeys toward personal finance. Although Clason was an American that wrote “The Richest Man in Babylon” as a series of pamphlets in 1926, he tries to write in an ancient tone to give his work that “attic feel.”
Here are six quotes from his work that might give you a sample of whether his writing style might do it for you:
1. The sun that shines today is the sun that shone when thy father was born, and will still be shining when thy last grandchild shall pass into the darkness.
2. If you desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself.
3. Our acts can be no wiser than our thoughts.
4. Will power is but the unflinching purpose to carry the task you set for yourself to fulfillment.
5. The hungrier one becomes, the clearer one’s mind works— also the more sensitive one becomes to the odors of food.
6. You’ve learned the lessons well. You first learned to live on less than you earn. Next you learned to seek advice from those who are competent. Lastly, you’ve learned to make gold work for you.
When I read “The Richest Man in Babylon”, I pictured Gandalf from “The Lord of The Rings” or Dumbledore from “Harry Potter” jumping out of their respective works to teach personal finance instead. This book has that grandfatherly “horse sense” wisdom kind of tone to it. Although the book can be a little bit dry at times, the purpose of reading it is the same purpose that someone has for reading something like “Poor Richard’s Almanack” by Benjamin Franklin. It is not about gaining brilliant new insights, but rather, finding a reinforcement of the basics. I would guess that if you read “The Richest Man in Babylon”, you could easily find three or four dozen “money quotes” to scribble into a journal or computer screen somewhere to use as a reference point going forward. This book is the financial equivalent of when baseball players report to Spring Training and work on their grounders, practice bunting, and refine their ability to get a good jump off the bag after the pitcher throws the ball. It is those kinds of lessons that you will find in “The Richest Man in Babylon”.
You can view the book for free online in PDF form by clicking here: http://www.ccsales.com/the_richest_man_in_babylon.pdf
If you give the book a couple hours of your day, I doubt you will be disappointed. There are some one-liners in this work that are fantastic little nuggets of financial wisdom that state poetically many of the basic principles we already know.
Originally posted 2013-08-02 08:42:11.