The Richest Man in Babylon

The Richest Man in Babylon may be the most recommended book on personal finance that I have ever heard of. George S. Clason wrote this book as a parable to help make the principles more memorable. 


The principles of personal finance revolve around having the discipline to stick to a particular budget. 


In this budget, you must always set aside at least 10 percent of whatever you earn for savings. 


70 percent of your income should be the upper limit of your living expenses. This includes all essentials, like housing, clothing, and food. 


The remaining 20 percent is yours to do with in whatever fashion you like, although many people who start to see their money grow like to start saving more of their money towards accumulating wealth and security. 


With the 10 percent of your income that you are continually saving, you need to make that money work for you and not just sit. In the modern era this often means investing your money into things like index funds and stocks. One part of this principle that is made clear in the book is to adapt as quickly as possible to setbacks in your investing strategy and finding trusted professionals who have more experience than you and investing with them. You should not invest your money in areas where you are not familiar.