The Richest Man in Babylon by George S. Clason Book Summary

The Richest Man in Babylon by George S. Clason Book Summary

 The Richest Man in Babylon is bestseller book by writer George S. Clason. This book reveals the secret to become wealthy. It revolves around the advice given by The Richest Man in Babylon to his friend about how one should go and accumulate wealth.

Long time ago in ancient Babylon there was an extremely rich man named Arkad. Actually, he was the richest man in the land.

Seeing his richness, two of his childhood close friends went to him to ask how he had gotten so wealthy while they had also worked hard but could barely take care of their families.

Arkad smiled and disclosed to them that in return for his services as scribed the key to wealth was revealed to him by another rich man.

The Richest Man In Babylon comprises of illustrations like this one, and in these book you will find advices that can be used in modern life to accumulate wealth.

For building wealth, you should save and invest intelligently.

The secret of wealth lies in how much you save and how you use you’re saved money wisely. You have to invest it intelligently.

Obviously, the primary thing you should do is save more.

This means that you should not spend all money you are earning and you should always keep your expenses below your income. Yet, setting aside up money is not adequate for you to get wealthy. Instead you should look for investment opportunities.

You need to invest your savings in something that will create more wealth, similar to stocks, government securities or funding new companies.

At whatever point you do make an investment make it consciously and always invest with those people who know how to use it wisely.

To be financially successful, be wise and admit how little you know.

Wisdom lies in acknowledging how little you really know and letting it be known to others. Socrates viewed himself wise for admitting, “I know that I know nothing.”

This way of thinking has to be applied when you learn new things. Don't fool yourself by thinking that you suddenly know a lot, yet rather stop for one moment to glance around.

It is fact that educating yourself about new information, lights up further territories of numbness, in the event that we decide to observe them.

In field of finance and investing, most of the people fail to realize that they have very limited knowledge. Studies revealed that most adults fail to even use basic financial formulas – for instance, calculating compound interest.

Wealth can only be accumulated slowly learning through a process of trial and error.

Most people fantasy about getting rich overnight. Except winning a lottery, it is next to impossible event to happen overnight.

Becoming wealthy is long process, involving many baby steps and some setbacks happen during it which is certain. Quite just on the grounds that the world is continually changing, particularly financially.

This implies you can never simply pick one wealth-building technique, such as investing in a specific stock, and sit back to watch the cash come in. The financial framework – and life itself – is questionable, so sometime something massive will occur, similar to the securities exchange crash. This implies you need to adjust to the new circumstance and find out about new wealth-building systems, trying different things with them and most likely flopping in a couple. Furthermore, similarly as you locate your next winning system, something tremendous will happen once more.

However be careful with overlooking that by its very nature, trial and error involves making mistakes. This implies you have to ensure these errors are little, so don't invest cash you can't bear to lose in area in which you're not sure.

Do long term investments where your money works for you instead of working for money just to afford things you want today?

‘Making Money’ is a situation where you work for money, yet ‘Accomplishing Wealth’ signifies being in conditions where money works for you.

Imagine, You working as manager in some factory and earning good salary every month. You earn money every month; But are becoming wealthy? Not Really.

For that, you have to keep on saving and investing some of that money you earning through salary.

Making Money is generally done to meet short term financial goals. You typically just consider about the things you can purchase with that next check, while future is of little concern. But this behavior is risky. Consider the possibility that the following check never shows up.

Accomplishing wealth, then again is longer-term objectives.

For instance, If you buy real estate out of your savings, it is investment. It won't bring you wealth immediately. Rather, you need to initially take care of the investment or wait till its value increases. This can take some time, however once the investment begins paying off, it will probably continue doing as long as you own it.

This sort of long term plan can help in giving you security in conditions like losing your job.

Doing investments which pay you back with interest are highly rewarding.

When you take loan – for instance, student loan – you have to pay interest on it. In opposite way, when you give loan to others, you expect some interest in return too. By this way those with money can achieve more wealth.

As an investor, earning interest on investments is attractive method for building wealth in view of its compounding nature. Your interest income increases after some time, because you will keep earning interest on interest income.

For instance, Suppose you invested $100,000 in another business and on the due date the proprietor pays you back your principal amount along with in addition to 10% interest, amounting to $110,000.

You at that point choose to reinvest the entire sum into another business with similar terms. This time when you get back the sum in addition to 10% interest, you'll get $121,000 – your interest income has expanded.

You can keep doing this process indefinitely, always earning more and more interest.

As should be obvious, your money not just works resolutely for you, it likewise turns out to be progressively viable at what it does after some time.

Opportunity brings good luck, it can occur many times, unlike chance which brings it once in while.

Many people believe luck means irregular, fortunate occasions. At the point when people talk about luck, they're truly discussing chance. Chance suggests something random and non-influenceable occurring, such as winning the lottery or being struck by lightning.

In reality luck is different from chance, since luck is not random. Rather, struggle a lot for it and acquire it.

So how might you work to make yourself "more lucky"?

Mainly by continually watching out for opportunities to build your wealth.

For instance, imagine a business person who is keen on consumer innovation, and in this way invests energy consistently perusing pattern reports, inspecting global financial situation and contacting trend-setters in her system.

One day she reads that 3D TVs are going to be trend setter, and later that day learns from inventor in her network that he has found a method for producing 3D televisions at half the conventional price.

She takes advantage of the opportunity and starts delivering the TVs, getting exceptionally successful.

Obviously her difficult work, carefulness and eagerness to take advantage of opportunity were what created this "event of luck".

You should work very hard to find out opportunities and grab them without delay.

You most likely know the proverb of the Boy Scouts: "Be Prepared” To find out new opportunities to multiply your wealth, you too need to be prepared.

So for what reason do individuals forego opportunities?

Because too often they delay in grabbing opportunity.

For instance, if the business person in the past point had chosen not to invest in the new 3D TV innovation and had rather waited for it to become viable and more popular in the market, the inventor would have without a doubt found another person to invest in their item. You can hardly wait for opportunities to be given to you. You should be proactive and hold onto them or you'll miss great opportunity.

If you want to have more opportunities coming to you, you should work very hard. Study and investigate areas you're keen on and create network, so you'll be able to find opportunities better and grab opportunities when they come.

Remember one thing, even if you work very hard, golden opportunities come rarely. This implies you may need to hold up some time and this can be disheartening in light of the fact that it appears your hard work isn't delivering any outcomes.

But your perseverance will pay off in the long run whenever an opportunity comes in.

Make expenses sensibly and don’t take on debt.

Firstly you have to make reasonable decisions about your expenses and costs using sensible assessment of your needs and financial situations.

For instance, say you desire about buying new top model car. You don't generally require it and getting it would require taking out a major loan on unfavorable conditions.

You should not take it, but say you buy it.

Presently you're utilizing majority of your pay check to take care of the interest, and in the long run you hit the moment that you should take care of the actual debt. You can't manage the cost of it, so you take another loan just to take care of this one.

Generally, taking loan is not good idea as you will not be able to save, invest, and eventually create wealth. Rather you'll be spending your pay on taking care of the debt.

The key message given in this book:

In this book The Richest Man in Babylon writer George S. Clason put forward that, the key to turning out to be wealthy is living below your income so that you can save money. Investing some portion of it in a manner that generates income for you will eventually result in accumulation of wealth. You should likewise realize that you can acquire good luck by trying sincerely and taking advantage of opportunities coming your way.

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