7 Principles of How To Become Rich | The Richest Man in Babylon

The coolest book I’ve read before about money ever is The Richest Man in Babylon. I have read this book one year ago and recently I decided to reread it one more time. It’s a cool book that tells you a story in dialog and really simple to read

At the start of the book, there is a story about this man when he was poor and from one rich man, he got 3 pieces of advice. Then they worked well and after 5 years he followed them and then started growing up and also grew his capital.

After some time passed he became the richest man in Babylon. And at some point, most people of Babylon became very poor and most of the money was in the hands of few people. The King of Babylon discussed this situation with his advisor and then they got a solution. If any person in Babylon will be rich then the city will be rich as well. But to implement this idea they needed a person who will teach them these principles. Who could be a teacher?

At that time the richest man in Babylon was Arkan, who at a young age got 3 pieces of advice about how to become rich. The King asked him to help and he agreed. They organized classes where Arkan every day gave one lesson to 10 people, who after studying will share this knowledge with other people.

So here are 7 principles of Arkan about how to become a rich person.

Principle #1. Save part of your income

The first principle and the most important one. No matter how much money you earn and do you have, always save part of it. As Arkan said, most of his students don’t have money in their wallets and often borrowed them. His first principle was, to pay yourself first and then pay others. That means saving part of the money and then using others for buying products, making haircuts, etc. His advice was to save at least 10% of your income and use 90% for any other things.

Principle #2. Keep track of your expenses

In case when you think that even 100% isn’t enough for your expenses, here is the second principle of Arkan. It doesn’t matter how much money you earn. If your income grows then your expenses will grow too. So take a look at your expenses and think about which of them are really necessary and which can wait, or maybe you don’t need them at all. And remember, never use those 10% from Principle #1 for such expenses. When you’ll filter them it’ll become easier to live on your 90% of income.

Principle #3. Make your money work

When you’ll get some money saved. For example, in 2 years you’ll have 2 * 12 * 10 = 240% of your salary. It’s almost 2.5 of your salary. It’s your capital and now you can invest them. You can try to use it earlier like after 1 year of saving or after 3, it doesn’t matter. Look for the ways and opportunities where you can invest them. And do it really carefully. For example, Arcan lost his first investment because he asked a stonemason to buy diamonds. And stonemason was deceived by the sellers. About it is said more in the next principle.

Principle #4. Protect your money

When you invest your money be very careful. Take a look at who you give your money to and for what. If this person isn’t reliable or doesn’t know about that subject where you try to make money like a stonemason in the previous principle. Don’t give them your money. Instead, find a person or people who understand this subject and can give you some advice about it. Then also if you’ll decide to invest money make sure, that they’ll be safe, at any point in time you’ll be able to turn them back and there are high reliability of income and return of funds.

Principle #5. Buy yourself a home

Many people live in the rent houses or apartments. They pay money each month for it. And almost always they don’t like it. It can be small, has some problems and it’s not actually home. And every month you have to pay for it. Arkan says that it’s better to pay every month for your own home where you’ll make a place where you’ll be comfortable and would like to live, where your family will live and everybody will be happy. And also after some time of paying it will be fully your place, that you don’t have to pay. Only taxes.

Principle #6. Secure income for the future

Think about the future. At some point in time, you won’t be able to make and earn money. We become older and older every day and every year. That’s why we should be sure that when we become older we’ll have some money to live on. The worst thing you can imagine is an old person who doesn’t have money to live and can’t earn them. Also in case of your death, you’d be possible to think about your family and that they will have money for living on. That’s why you should always think about long-term incomes and how to save them for yourself and your family.

Principle #7. Improve your skills

It doesn’t matter where you work and what you do. Often people ask for increasing their salaries but don’t get it. As Arkan said, as soon as, he became a better worker and his skills became better his boss increased his salary without talking with him. As you give more and when you like your job you invest more power and soul into it. Everybody around feels it and that’s why you get what you deserve. So make yourself like your job and time trying to improve your skills and learn something new.

That’s it. Such basics and simple rules of the richest person in Babylon are just 7 principles that can be followed by anybody. And by you with me as well. Hope it will help you and other people who you would share with.