Financial advice for the new year

With the holiday season and festive splurging coming to an end, a classic piece of literature on financial prudence is a good way to start the new year.

The Richest Man in Babylon, by George S Clason, is a little book written 90 years ago. It contains ageless wisdom on the management of money.

The story begins with Bansir, a chariot builder in Babylon, who is moaning to his friend Kobbi the musician how after years of hard work neither one of them has two coins to rub together.

Wishing to be men of means, “to own lands and cattle, to have fine robes and coins in my purse,” the two decide to find out how others acquire gold and do whatever it is that they do.

They seek the counsel of their childhood friend, Arkad. He is by far the wealthiest man in Babylon, a city renowned for its economic prosperity, liberal lifestyles and impenetrable walls. Arkad began his life as a humble writer of clay tablets and would have remained so had he not learned the laws that govern the building of wealth and observed them meticulously.

Set in and around the ancient lands of Mesopotamia in present-day Iraq, Richest Man is a collection of short stories whose insights are as relevant today as they were more than 1,500 years before Christ.

Successful businessman

Clason was a successful American businessman who ran a map-making company in the early 20th century. He set out to give advice on wealth-building and financial thrift through stories printed on pamphlets.

In the 1920s, the pamphlets were distributed to the public in banks and insurance companies, and in 1926, the most famous of the narratives were collated into a book named after one of the tales.

Clason narrates the parables in charming biblical style, using characters from that period. There are princes and paupers, camel traders, farmers, sheep owners, sandal makers, gold traders, slaves, butchers, bakers and egg merchants.

Wealthy Arkad puts forward seven lessons for financial management, beginning with, “Start thy purse to fattening.” In other words, the regular setting aside of savings instead of merely fattening the wallets of others.

That is how Arkad himself embarked on the road to riches.

From his advisor, a shrewd moneylender called Algamish, young Arkad learnt how to control his expenditure, to make money work for him, and to insure for his old age. He learnt about the importance of owning one’s home, and that the “Goddess of Good Luck” smiles on diligent men.

Along the way, he made mistakes, lost money and invested unwisely, but ultimately Arkad’s financial discipline brought him prosperity.

Another tale, The Gold Lender of Babylon, presents an example of the person who secures riches rapidly but risks immense loss because he doesn’t know how to handle it.

There is the parable of Sharru Nadu, a splendidly dressed merchant prince, who was once sold into slavery on account of his brother’s gambling habits.

Now the guardian of his partner’s grandson, Nadu endeavours to teach the pampered youth that hard work is not the preserve of slaves, that industriousness is the “secret key to the golden shekels.”

In another story, the city of Babylon is besieged by an enemy army. “The walls of Babylon will protect you,” Old Banzar, the warrior in charge, assures the citizenry. The question here is, what are the impenetrable walls guarding your savings and investments?

The account of Dabasir, the affluent camel trader, is one of the most delightful. A reckless youth, he overindulged on his modest earnings and eventually lost everything he had. Following wise words from his master’s wife, he created a financial plan for settling his innumerable debts and securing his future prosperity.

It is interesting to note how Clason’s advice is still being dispensed by financial gurus today, albeit with contemporary examples.