Life Lessons You Can Learn From The Richest Man in Babylon
The basic rules of money, like the rules of life, are eternal – they haven’t changed since humans appeared on the planet.
How to be successful in life and with money seems complicated because we live in such a complicated world.
Add to that the countless variables that affect our health and our wealth and it seems like the quality of our lives is up to chance, up to a million-billion variables that are outside of our control and, worse, the forces controlling those variables don’t seem to care, or even know about us — at all.
“The Richest Man in Babylon” (you can download it here for free, or purchase it here) through the advice of a fictional character, “Arkad,” takes an effective and age old tactic of teaching by parables. A parable is a “teaching” story with all the extraneous complexities of life removed and this allows you to focus only on what’s essential and critical.
5 Top Life Lessons From The Richest Man in Babylon (oh, by the way, they’ll help you get rich too)Richest Man in Babylon Top Lesson #1 – Invest in YourSelf
1. Invest in yourself.
Oprah Winfrey, arguably one of the most successful humans on the planet, states this lesson another way: “The big secret in life is that there’s no big secret. Whatever your aim, you will get there if you’re willing to work.” Investment is work. Make no mistake about that. Its hard work that comes with constant setbacks and at no point is there ever a guarantee of success. This is why many people will not invest in themselves. Yet, success will come. “The Richest Man in Babylon” says the two most important ways to invest in yourself is: 1) save 10% of everything you earn and 2) increase your ability to earn. I love that “earn.” Note that Arkad doesn’t say figure out some great ‘get-rich-quick’ scheme or figure out some way to make a quick killing in the market or real estate. He’s saying — increase your value to others.
2. Learn from the best.
I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed. ~ Michael Jordan
In short, you don’t have to figure it out all by yourself or from scratch. Look to others who have achieved the wealth or success you desire and simply follow their lead. In fact, the entire book is based on this lesson: “The Richest Man in Babylon” begins with two poor men, Bansir and Kobbi, who are confused about where wealth comes from. “Hey, Arkad is super rich, and he’s a nice guy,” they say, “let’s ask him how he did it.” Learning from the best is a huge life lesson.
3. Another big life lesson, at least as far as money goes? Compound interest.
Albert Einstein said (purportedly): “Compounding interest is the most powerful force in the universe.” The fact this quote is attributed to Einstein simply underscores just how smart and dead-on accurate it is. Arkad tells Bansir and Kobbi to take the 10% they’re saving for themselves (see lesson #1 above) and invest that in something that will earn compound interest. Any simple FDIC insured savings account will do. To see why compounding interest is the most powerful force in the universe, play around with this compound interest calculator.
4. Maintain your health (and wealth).
Arkad suggest saving money only where it is safe. “The Richest Man in Babylon” doesn’t argue against investments where there is necessarily a risk. Instead Arkad suggests keeping a core of wealth as safe as possible, i.e., where you have the maximum protection against loss. You can expand Arkad’s advice to your entire life: you want to protect your health and relationships from loss. In terms of your health – put into place a plan to stay healthy. Beyond that, make sure you have adequate health insurance or figure out a way to get as much as you can reasonably afford. In terms of your relationships – simply taking the time for relationships, paying attention to the people who are important to you, can go a long way towards protecting those relationships.
5. Help others.
Studies of the habits of “the rich” show they give a lot of their wealth away. You might think, ‘yeah, sure – they’ve got the money to give,” but it turns out this was a habit before they acquired their wealth. Arkad impresses upon Bansir and Kobbi that they “must have compassion upon those who are injured and smitten by misfortune and aid them within reasonable limit. [They] must do deeds of thoughtfulness to those dear to [them]. “ Not only are you helping others, but you are paid back in ways that are far more valuable than the money you’ve given away. Says Oprah, “Just what I know beyond doubt is that whatever you give returns back to you.”
Speaking of learning from the best, if you’re struggling, with anything, and you’re open to some more words of wisdom, listen to Michael Jordan talk about what it took him to succeed: