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The Best Personal Finance Books of All Time: The Richest Man in Babylon

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April 4, 2016 By ESI 10 Comments

Richest Man in BabylonI have read hundreds of books on all sorts of financial topics — general money management, investing, retirement, and on and on. Unfortunately the vast majority of them aren’t worth the paper they are printed on. They are poorly written and contain little valuable information.

That said, there are many books that stand out for one reason or another — and I mean this in a positive way. They do have good information and are worth anyone’s time in reading.

In fact, I have a list of the only five money books anyone needs to read. These are what I consider to be must-reads for any student of personal finance and books that I wholeheartedly endorse. If you simply read these five books and did what they say, you’d probably be a multi-millionaire within a couple decades.

I personally have read all of these and many of them I refer to quite frequently. I thought ESI readers would be interested in my take on them and why I think each is so important. So I’ll be posting on each over the next few months so you can get the basics of these fine books.

This post we’ll focus on probably the one book I’d recommend if I could only recommend one, The Richest Man in Babylon.

Summary

The Richest Man in Babylon is a parable of a wealthy man in ancient Babylon who gives a friend “seven cures for a lean purse.” The cures along with a summary of each) and some of my related posts are as follows:

  • Cure #1: Start Thy Purse to Fattening – Save 10% of your income. Earn Overview: How to Grow Your Income
  • Cure #2: Control Thy Expenses – Keep spending low. Save Overview: Just as Important as Earning
  • Cure #3: Make Thy Gold Multiply – Invest to grow your wealth. Invest Overview: Fueling Your Net Worth
  • Cure #4: Guard Thy Treasures from Loss – Don’t lose money when you invest – protect your principal.
  • Cure #5: Make of Thy Dwelling a Profitable Investment – Own your own home. How to Buy a House and Pay Off the Mortgage in Less Than 10 Years
  • Cure #6: Insure a Future Income – Turn your wealth into a retirement income. The Goal: Financial Freedom, My Plan for Total Financial Freedom (AKA My Retirement Plan)
  • Cure #7: Increase Thy Ability to Earn – Study to become wiser so you can make more money and manage it better. Two Huge Reasons Why Your Career Matters

Just look at those tips! All of them are extremely solid! And as you can see from my links, they flow nicely with my personal philosophy of managing money.

It’s hard to believe that this book was originally published in 1926. What worked then certainly works now (with a few adjustments, of course.)

Personal Experience

I can’t remember the first time I read The Richest Man in Babylon but I believe it was while I was in college. At that point I really didn’t “get it”. I knew nothing about personal finances but was so arrogant I believed I did.

Then I read the book again in my 30’s. By that time I had read and started to apply the principles in The Millionaire Next Door: The Surprising Secrets of America’s Wealthy and I saw what truth there was in this book. The two books go so well together and really reinforced the basics to me. What are the basics? They are quite simply:

  • Earn
  • Save
  • Invest

These three are the essence of The Richest man in Babylon (and The Millionaire Next Door.) They are tried and true principles that will work if applied over time.

As I noted above, The Richest Man in Babylon is probably the one book I’d recommend over any other, even over The Millionaire Next Door. Why? Because it covers the basics much more clearly and really lays out what is vital to personal finance success.

This is not to say The Millionaire Next Door doesn’t do this, it’s just that it spends a lot of time talking about their research, who average millionaires really are, etc. while The Richest Man in Babylon gets to the meat right away. That said, they are both awesome books.

FYI, both of these books make great gifts for young people (if they are more open-minded than I was) as if they can learn and apply these principles at a young age, they will be well ahead of pretty much anyone.

Anyone out there ever read The Richest Man in Babylon? What do you think of it?

Filed Under: Books

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Comments

  1. Bert says

    April 4, 2016 at 5:00 am

    I read this book in my mid-twenties. I’ve reread it many times and it is a well worn book on my shelve. I’ve followed the cures more or less for the last 30 years and will be retiring at the end of this month in my mid-fifties. I also enjoyed and took to heart The Millionaire Next Door.

    Reply
  2. Tamara says

    April 4, 2016 at 10:23 am

    I too have read it. It did not resonate with me as much as with you. The points certainly but not the parables.

    Then again I read it once I was squarely on the path to FI. What got me on the path though was Your Money or Your Life and The Millionaire Next Door.

    Reply
    • K D says

      April 9, 2016 at 2:47 pm

      Those are the same two books that had a great influence on me.

      Reply
  3. Andy says

    April 5, 2016 at 6:29 pm

    Agree, after reading them based on your recommendation. Also, the book “The Wealthy Barber” is a good read as well. Maybe its #6 on your list…. 😉

    Reply
  4. Sam @ Financial Samurai says

    April 19, 2016 at 4:40 pm

    Never read it! But thanks for the recap. Feels like I have now, just like Cliff Notes in HS 🙂

    It’s all about making thy gold multiply!

    And of course, negotiating a severance package when the time comes to move on.

    Sam

    Reply
  5. Michael says

    November 22, 2016 at 7:27 am

    These books are the foundation of wealth building !
    Do also read Think and Grow rich from Napoleon Hill and use affirmations !

    Reply
  6. [email protected] says

    June 10, 2017 at 6:07 pm

    I’ve read the book numerous times, and have it as an audiobook. It definitely sets out the basics for Financial Independence.

    Like you, I just wish I had applied it earlier

    Reply
  7. Mark Dias says

    May 3, 2018 at 1:26 pm

    75-80% okay, that is nuts I thought my 40% was good but wow. Will have to check those books out. Always hear them mentioned but never read them.

    Reply
  8. Austin Mom says

    February 7, 2020 at 6:54 am

    I remember The Richest Man in Babylon as table discussion at dinner when I was a kid along with The Prophet. I knew they were parables then and I was given them both as graduation presents. Millionaire and Your Money or Your Life resonated the most with me, but I can still hear my dad saying “a part of all you earn is yours to keep” from RMIB.

    Reply
  9. Impersonal Finances says

    November 28, 2020 at 2:43 pm

    As Austin Mom suggests, I think this is great for that graduation age. Though I could see myself getting annoyed at the parables and thinking I already knew everything the book suggested when I was younger. The beauty is in the simplicity, but the it’s one thing to understand and another to put into practice. I really enjoyed it for what it was.

    Reply

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