Thoughts on Leadership: The Richest Man in Babylon

By Gino Blefari

This week my travels find me in Orange County, California. (I traveled there on Sunday.) On Monday, I had my typical WIG calls and on Tuesday, I had my monthly HomeServices of America CEO leadership meeting, which was hosted from the HSF Affiliates boardroom! It was great to be back in the office. On Wednesday, I attended a dinner with the Berkshire Hathaway HomeServices California Properties leadership team and Tim Wilson, President and CEO of Prosperity Home Mortgage. On Thursday, I gave my Time Management presentation to the team at Berkshire Hathaway HomeServices California Properties, and it was the first in-person meeting they’d held since March 2020!

If you’ve been following my social media accounts, I recently posted the books I’ve been listening to and reading this summer. In addition to that list, I’ve also been revisiting some older reads like “The Richest Man in Babylon” by George S. Clason.

Jim Rohn, a philosopher, author and dear friend of mine, first introduced me to this book when I took his class on “7 Steps to Financial Independence.” He ended the class with this quote: “When your outgo exceeds your income your upkeep becomes your downfall.”

Here are a few takeaways I gleaned on my most recent literary sojourn through the book, which may be valuable to you:

A part of what you earn should be yours to keep. Savings compound over time. If you can save just one-tenth of your monthly income, you would be surprised what kind of a nest egg you can accumulate. And as you save more, you feel more energized to earn more, which will in turn make the amount you save each month increase.

A budget like the one above isn’t restricting – it’s freeing. Clason writes: “Like a bright light in a dark cave thy budget shows up the leaks from thy purse and enables thee to stop them and control thy expenditures for definite and gratifying purposes.” When you budget, you’re increasing your wealth, which gives you more long-term control, not less.

Your wealth isn’t determined by your income, it’s determined by how well you manage that income by saving and investing your money. You could earn 1,00,000.00 a year and spend it all or earn 1,00,000.00 a year and spend half. Which person is richer?

Passive income is a cure for a lean budget. The money you save shouldn’t sit idly by, it should be put to work so it creates a steady stream of passive income for you to continue building your wealth.

Homeownership will inspire you to take action to increase your income and savings. Clason says, “To a [person]’s heart it brings gladness to eat figs from [their] own trees and the grapes of [their] own vines. To own [their] own domicile and to have it as a place [they are] proud to care for, putteth confidence in [their] heart and greater effort behind all [their] endeavors. Therefore, do I recommend that every [person] own the roof that sheltered [them].”

Luck increases with opportunity. They say riches come to those who are lucky but while that may in part be true, these so-called lucky people seize opportunities when they arise (after factoring in the risk vs. reward) and take the necessary actions to prepare themselves for the day luck arrives. Like my good pal Dwight Clark once said, “If you think about your life’s most extraordinary feats—whether it’s winning Super Bowls or winning business—yes, there’s always some measure of luck involved but there’s also a whole lot of training, planning and hard work that has to happen long before luck arrives. Then, if you’re fully prepared at the exact moment luck finally does ring, you can pick up the phone and answer its call.” (Nice catch, Dwight. Joe put it in the exact spot for you to go up and get.)

So, what’s the message? George S. Clason wrote “The Richest Man in Babylon” in 1926 and while its references are absolutely outdated, the fundamentals of wealth management still remain. If you follow the simple tenets of budgeting, investing, passive income, homeownership, opportunity-seeking and money management, financial success will be within reach.