What worked back then won’t work now.
Have you ever been to a movie that you had heard a lot about and finally, when you did get to watch it, it left you wondering what the hype was all about? I was left with more or less the same dissonance after reading ‘The Richest Man in Babylon’.
One of my senior colleagues in the workplace strongly recommended this book to me. And while suggesting that I must read this book, she went to great lengths about how this holy grail of personal finance had changed her life forever. Her enthusiasm proved adequate to persuade me. I immediately ordered the book online.
Normally I don’t go for paperback editions, but in the case of ‘The Richest Man in Babylon’, I had to compromise on my stand since hardcover wasn’t available any sooner and I couldn’t hold my horses any longer.
George S. Clason’s ‘The Richest Man in Babylon’ claims to have sold more than two million copies since it was first published in 1926. Quite an accomplishment for a book whose success and longevity stemmed from nothing but word-of-mouth!
Clason intends to instill a coherent financial discipline in its readers. The author employs the much-celebrated Babylonian financial system as the metaphor to explain his financial principles.
While honest in its intentions, ‘The Richest Man in Babylon’ fails to mesmerize.
The biggest problem with this nine-decade-old book is that over time, it has failed to stay contemporaneous. I don’t mean to dispute the ancient wisdom of the Babylonian sages nor am I questioning the author’s intelligence.
The book, as it is, appeals more to a young, still-learning-the-ropes audience than the seasoned readers of personal finance. For a mature reader, the financial philosophies that underlie the parables in the book are commonplace knowledge these days.
What’s worse, some of these philosophies or golden rules are conveyed to the reader in an overly simplified manner. Consider the following principles discussed in the book:
- Save one-tenth of your income.
- Control your expenditures
- Employ your savings in investments so that they multiply
- Guard your losses a.k.a safety of principal
- Buy your own home
- Plan for retirement income, etc.
Now how many of these aforementioned principles have you never heard of? Few. I am sure.
The problem with ‘The Richest Man in Babylon’ is that it shares financial wisdom in the shape of mnemonics. I don’t blame the author. Apparently, his intention back in the day was only to alert readers to the elementary financial principles than discuss complex financial instruments such as common stocks and bonds.
For the contemporary readers, to my dismay, this book doesn’t carry much ammo. I would rather suggest you pick up any one of Warren Buffet’s numerous biographies. My personal recommendation is Mary Buffett’s The Warren Buffett Stock Portfolio - Warren Buffett Stock Picks: Why and When he is Investing in ThemInterestingly, Mary Buffett is the former daughter-in-law of Warren Buffett.
If you want something more technical, go for Benjamin Graham’s ‘The Intelligent Investor’ with commentary from Jason Zweig. And, if you are further interested in exploring the intricacies that lie behind most of our financial decisions, I highly suggest Jason Zweig’s ‘Your Money and Your Brain’.
In conclusion, yes, ‘The Richest Man in Babylon’ is a short and easy read but it lacks the cutting edge of a modern-day classic.