A historical Sketch of Babylon: The book starts with establishing the glory and grandeur of the ancient city of Babylon, a prosperous civilization more than 4000 years ago. Although it is in ruins today, it was a place of abundant treasures in its pristine glory. It was a place which had a rich heritage of culture and prosperity, where people where much ahead of their time and had built huge canals and high walls and castles. The city had affluent kings who seldom invaded other lands but fought many battles, mostly to defend themselves from greedy invaders, who were lured in by the riches and dazzle of all the gold that was prominent behind the walls of Babylon.
The man who desired Gold: Despite the riches and grandeur of a prosperous ancient civilization, Babylon was also a land of stark contrast. While on one side there were rich men of abundant means, there were also people like Bansir, the chariot maker who toiled all their day just to earn their modest daily bread and only manage to survive from what they earned. On one summer afternoon, Bansir sat at his courtyard staring at the slaves who were fetching water in goatskin from downhill, carrying heavy loads on their back to the king’s hanging gardens. He wondered if he was any different to these slaves, chained by his circ*mstances and his financial misery. He was accompanied by his childhood friend, Kobbi, the musician, who also was a man of modest means and earned a living by strumming the strings of his lyre. Both friends looked at the slaves and wondered why they had to live a life chained to financial misery and not like other affluent people in Babylon. They wondered if there was a secret which the rich people knew, and they wanted to learn it to improve their lives.
The richest man in Babylon: Both friends, Bansir and Kobbi, decided to find the secret to wealth together and thought of seeking advice from an old friend, Arkad, who was the richest man in all of Babylon. He was so rich that even the King himself consulted Arkad in matters of the royal treasury. They decided to meet him along with their other childhood friends and seek his counsel. Upon reaching they asked Arkad how he got so lucky with his finances, as he was neither the best in school at studies, nor at sports. They wondered how Arkad had amassed such abundant wealth.
Arkad explained that he too was born to a modest family with no inheritance. He too worked as a wage earner year after year to earn his daily bread and lived within his limited means. Once, a client of his, Algamish, gave him a task to be completed overnight and he was unable to do it on time. Desperate to break out of his financial despair he sought the wisdom of old Algamish on how he too could become wealthy. He promised that he would work overnight if he was given the secret to wealth. Arkad worked the entire night to finish the project and finally when Algamish came at the break of dawn, he was impressed with the work Arkad had done and told him his secret to wealth, which was – “A part of what you earn is yours to keep”, which meant – pay yourself first from whatever you earn – at least 10%. Giving this advice to Arkad he went away.
Algamish returned to Arkad after a year. Arkad exclaimed that he had done exactly as advised and had saved 10% of what he earned every month. Algamish asked what he had done with this money set aside, to which Arkad said that he had given a full year’s saving to the brickmaker who would get him precious stores from foreign land to sell into Babylon and they would both benefit from the profits. Algamish said that by doing so Arkad had uprooted the tree of wealth he had just planted, and that he will need to plan another one. He insisted that one should seek advice only from those who are capable in their respective crafts – what would a brickmaker know of precious stones!
Taking this lesson and losing his hard-earned savings of an entire year, Arkad again endeavored for a year and saved some money, and this time he gave it to the shield-maker, who loaned the money from him to buy copper and gave him an interest every3 months. Algamish asked Akrad what he did with this interest income and Arkad said that he used this money to buy fine clothes and food and spent it on his desires. Algamish again counseled him that he was killing the seeds of his savings before they could grow bigger and produce more seeds who would all then work for him. He said he should first create enough seeds of his income, to build an army of them, and then he could dine in the finest of banquets and still not worry about his income. Arkad took this advice.
After this, Arkad continued to multiply his income until a few years later, Algamish, who was now a very old man came and offered if he would be happy to join him as a partner for his estate. Arkad accepted his offer and grew his estate and upon Algamish’s death became a legal heir to a portion of Algamish’s wealth and estate.
The Goddess of Good Luck: Bansir, Kobbi and their friends were listening to Arkad’s story and said that he got lucky by inheriting Algamish’s wealth and estate, but Arkad said merely luck was not the factor in play here. To prepare himself for this luck, he first patiently set aside 10% of his earnings, year after year and even had to lose a full year’s savings to learn valuable financial lessons along the way. All this made Algamish believe that Akrad was worthy of his trust and partnership and therefore the fortunes turned in Arkad’s favor. He was not lucky merely by accident, but he worked hard to get lucky.
Arkad continued to explain to the group, his views on ‘Luck’ and how to invite the “Goddess of Good Luck” to their lives. He explained that luck was not a proposition of gambling tables or racing tracks where men made huge fortunes. Luck was rather granted to men who knew how to act when presented with a noble opportunity. He exclaimed that the “Goddess of Good Luck” did not like procrastinators and therefore men who failed to take swift action when the opportunity came, were deprived of good luck, despite coming very close to it. Thus, he said “Men of Action are favored by The Goddess of Good Luck”.
Seven Cures for a lean Purse: As Arkad was well respected within his community as the richest man in Babylon, he was once called upon by the king to counsel his fellow countrymen on how to amass wealth and dare to dream of a life beyond their current means. Arkad humbly agreed and a class of 100 countrymen from various professions and crafts was called. They were to meet Arkad for 7 days and in turn learn one valuable lesson about wealth each day.
In the following 7 days, Arkad shared with these 100 men, several anecdotes form his own personal life and revealed the following 7 ways to build wealth:
- Always start by paying yourself first, i.e. at least 10% of what you make. In other words, live within your means and spend 90% or lesser of what you make.
- Learn to control your desires and unnecessary expenses. You can save more than you think if you spent with discretion.
- Learn to make your savings multiply through Investment. Reinvest the gains and enjoy the fruits of compounding. Watch your fortune grow exponentially.
- Protect and preserve your capital. Seek advice only from those who are worthy of giving advice and do not be lured into investments which you do not understand.
- Convert your rentals into ownership, thereby giving your family phycological joy of owned home and yourself the comfort of owning the roof over your head and a property to yourself.
- Build a secondary/passive source of income, which will serve you even when you sleep or are on vacation or dead.
- Learn and acquire more skills. Become better in your field/craft and command a higher income by virtue of your knowledge and competence.
The five laws of Gold: The book continues with the tale of Nomasir, who was Arkad’s son and to whom Arkad was supposed to hand over his entire fortune as his legal heir. However, Arkad wanted to be sure that Nomasir was able enough to handle this responsibility and would be able to take care of his fortune. He therefore gave Nomasir two precious gifts - A bag of God and a Clay tablet which had in it inscribed the ‘five laws of Gold’ and asked him to pursue a journey to find his own entity in a foreign land. If Nomasir was able to return as a noble man after 10 years, and grew his fortune, he would be a worthy heir of Arkad’s wealth.
Nomasir took both gifts from his father and set foot to journey towards a foreign land, Nineveh, which was then a growing city. Like most men, Nomasir chose to use his bag of gold first and ran into multiple poor transactions, which led him to lose his gold very quickly. He was conned by a group of merchants in his caravan who lured him to bet on racing horses and promised him that his gold would multiply overnight. Alas, Nomasir lost half his gold betting on horses, which were destined to lose, only to later realize the merchants were crooks. Nomasir, also lost a large portion of his gold buying a shop with all its merchandise upon the advice of his fellow traveler, who offered partnership in the business venture but insisted Nomasir to invest in buying the shop first and then he would later on invest in running the business. This time as well, Nomasir, trusted another man with his remaining gold, only to later realize that he would not invest his part in the venture, and Nomasir had to finally sell the shop at a significant loss.
These sour experiences in handling the bag of gold handed over to Nomasir by his father led him to a path of misery and distress. He had to sell-off his horses and slaves to survive in foreign land. Finally, he decided to open the other gift given to him by his father, the clay tablet in silken cloth, which had in it inscribed the 5 laws of Gold. The laws were as follows:
- Gold comes gladly and eagerly to the custody of a man, who diligently puts aside not less than one-tenth of his earnings to build a future estate for himself and his family.
- Gold is a willing worker and works hard, day and night, like an obedient slave, under a wise owner (master) who puts it to profitable employment, multiplying like flocks of cattle in the field.
- Gold clings to a cautious owner who invests it under the counsel of wise and knowledgeable men.
- Gold flees a naïve and inexperienced owner who invests it in ventures which he is not familiar and skilled with.
- Gold abandons a man who forces it to impossible returns risking it for fanciful propositions.
Using these 5 laws of gold, shared to Nomasir by his father Arkad, who was the richest man in all of Babylon, Nomasir started gradually re-building his personal fortune. He started by working as a supervisor the slaves working to build a wall and saved and set aside 1/10th of what he earned. His dream was to accumulate enough gold before 10 years as he had to prove his worth to his father as a rightful inheritor of his fortune.
Several months passed and one day, his supervisor reached out to him and appreciated Nomasir’s prudent choices and frugal living. Nomasir stated he was saving up to accumulate enough gold as he was given by his father. His supervisor offered him wise advice to invest in copper as soon after the wall is finished the king would order for the royal gates to be made and so much copper was not available in all of Nineveh to build the royal gates. At such a time, Nomasir could sell his copper to the king and receive a handsome price in exchange of the transaction. Nomasir invested under his wise counsel and gained significantly from this venture. Thereafter, he joined a group of similar venture capitalists who invested wisely and after careful consideration of the opportunity (unlike his past experiences with horse-racing and shop partnership).
10 years passed and Nomasir finally returned to his farther, Arkad in Babylon and explained his experiences to his father. He was embarrassed at the handling of the bag of gold and admitted his mistakes, however he was humbled to share the gold he had accumulated through the invaluable wisdom inscribed in the clay tablet as the ‘5 laws of Gold’. He presented 3 bags of gold in return of the gifts he took from his father – 1 in return of the bag of gold gifted to him and another 2 in return of the clay tablet. Arkad was proud of his son and declared Nomasir as his worthy legal heir.
The Gold Lender of Babylon: The book continues with the tales of Gold Lender of Babylon who shares his invaluable experiences while lending goal to the people of Babylon. To him, the shield maker of Babylon had reached to receive his wise counsel on the ways of lending Gold. The shield maker had recently been rewarded 50 pieces of gold from the King for his masterful work and he was asked by her sister to give the gold to her husband to start a business venture. The shield maker of unsure if he should give all his gold and wanted to seek the gold lender’s counsel.
The Gold lender narrated a story to the shield maker. He said, there was one a farmer in Babylon who could listen to what animals said. He had an ox which would plough all day in the fields and an ass who would be used for his travels. One day, the he overheard a conversation between the ox and the ass. The ox was told the ass, how he had to work the entire day in the field in the beating heat of the sun, while the ass only had to carry the farmer’s goods once in a while , when he travelled and for the rest of the days, the ass would just stand in the backyard, eating grass all day, while the ox toiled in the fields. The ass gave him an advice to act lie down in the ground next morning and act sick, so that he could be spared of hard labor. The ox acted upon the advice and did exactly as planned. However, the farmer, ordered that ploughing must go on and he tied the ass to the plough and made the add plough the entire field in the beating sun. At evening, ox the ass met again, and the ox thanked the ass for the day’s rest. The ass was excruciatingly tired and infuriated and stated that the ox must stop being lazy and learn to carry his own burden. From that day onwards, they never spoke again.
The shield maker was curious to know the moral of this story. The moral of the story, the Gold lender said, if at all one must choose to help others, one must learn to do so in a way that they don’t take their burden on their own head.
The gold lender shared several other stories of how unwise lending could lead to a loss of fortune, that is hard-earned through patience, persistence and prudence. The shield maker learned a valuable lesson through this tale.
The Walls of Babylon: The book continues with the tales from Banzar, a veteran of the royal army of Babylon, who now stood as royal guard of the passage to the mighty walls of Babylon. Babylon, with its abundant riches and gold, was prone to invasions and attacks. However, the mighty walls of Babylon always safeguarded it from unwelcome guests. One such invasion has been accounted in the book where an army once tried to impregnate the Babylonian walls. An invasion that lasted several weeks, with mighty soldiers jostling against the walls with all their might and fury. The citizens of Babylon were at unrest at the thought of their fate, should the walls give in. Banzar know the walls were strong and had saved Babylon some many invasions for more than 100 years. He reassured every person who anxiously walked up to him, seeking news of the impending invasion. Finally, after 3 weeks and 5 days, when the armies could not break into the walls, the retreated. The lesson in this story is that of protection. While in ancient kingdoms, kings build huge castles, high fortresses and impregnable walls, in today’s times, protection comes in the form of insurance and financial security. One must build adequate protection from unwelcome incidents and risks to keep their financial lives stable.
The book continues further with several parables of slaves, vividly documented in the clay tablets of Babylon, unearthed more than 4000 years after being recorded. These were the stories of slaves, who had worked their way towards financial independence and personal freedom, following hard work and sound financial principles, as explained in the book.
Summary: The financial principles explained in the book are age-old and timeless. They have worked well in a prosperous civilization, as old as Babylon, thousands of years ago and still hold good today. The book is a great start for anyone willing to start from the basics of personal finance and work their way up to financial success and wealth. It emphasizes well the need of one to live within means, avoid debt unless necessary, save 10% of more, invest under wise counsel and grow wealth. The book is a good starting point for anyone willing to learn the basics of personal finance.
