The Richest Man in Babylon

The Richest Man in Babylon, George S. Clason

I listened to this audiobook with great interest, as it featured a series of parables rather than a mere recollection of tips and justification on why you should follow them.


The foundation of your financial wellbeing is your defences. Clason used the story of a siege on Babylon’s heavily fortified city to express how important protection was.

6 months of cash and adequate insurance will be highly important foundations before you even start investing. It ensures that in the event of a rainy day, instead of liquidating your assets, you can use these savings.

Never underestimate the power of protection.


‘A portion of what you earn belongs to you.’ This seemingly simple principle is actually rather profound. Far from sounding rather obvious and daft, all too often, the money we earn ends up lining the pockets of our online retailers, restaurants, or clothing merchants. How much of our monthly income actually ends up in our own pocket, rather than the pockets of others?

This book recommended putting aside 10% a month, which is relatively easy. Next time you are tempted to make that impulse buy on Amazon, take a deep breath, and think: do I really need this?

I find it useful to have all these automated. Each month, set up a standing order that automatically transfers 10% of the amount to the highest interest-grossing account. That way, there is no excuse.

warren buffett savings


Money is our servant, not our master. I loved how Clason expressed how we have to let our money have children, and then allow them to have even more children!

What are the practical steps you can take?

I believe a step into the stock market is inevitable. Follow the advice of Andrew Hallam in his book ‘The Millionaire Teacher’. Do difficult things simply.

  1. Use your age to determine your stock market allocation.
    1. If you are 22 (like me), allocate 22% to a sovereign bond index fund (such as the ABF Bond Index), and then split the remaining 78% between your local index and the global stock market index.
    2. For me, that means investing in the STI ETF and the db x-trackers MSCI World TRN Index ETF.
  2. Rebalance at the start of each year. If stock market increases have meant that the market value of your index fund is now 15%, sell off the stock market indexes to rebalance them to the previous percentages.

Following such rules seems stupid, and simple, but it works. Andrew Hallam has shown it in his research.

3 simple rules for greater financial security. Follow these timeless principles, and you can be sure that wealth is just around the corner.

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