The Richest Man in Babylon

In old Babylon there once lived a certain very rich man named Arkad. Far and wide he was famed for his great wealth….

The Richest Man in Babylon is a 1926 book by George S. Clason dispenses financial advice through a collection of parables set 4,000 years ago in ancient Babylon. The book remains in print almost a century after the parables were originally published, and is regarded as a classic of personal financial advice.

The parables are told by a fictional Babylonian character called Arkad, a poor scribe who became the “richest man in Babylon”. Included in Arkad’s advice are the “Seven Cures” (or how to generate money and wealth), and the “Five Laws of Gold” (or how to protect and invest wealth). A core part of Arkad’s advice is around “paying yourself first”, “living within your means”, “investing in what you know”, the importance of “long-term saving”, and “home ownership”.


Money is the medium by which earthly success is measured.

It makes possible the enjoyment of the best the earth affords.

It is plentiful for those who understand the simple laws which govern its acquisition.

A part of all you earn is yours to keep.

“Good luck waits to come to that man who accepts opportunity.” -George S Clason

The Simple Rules of Its (Money) Acquisition (Seven Cures)

Use the financial principles made clear below. Let them guide you away from the stringency of a lean purse to that fuller, happier life a full purse makes possible.

Like the law of gravity, these laws of money are universal and unchanging.

1. Start thy purse to fattening

2. Control thy expenditures

3. Make thy gold multiply

4. Guard thy treasures from loss

5. Make of thy dwelling a profitable investment

6. Insure a future income

7. Increase thy ability to earn

“Our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals.” -George S Clason

1. Start Thy Purse to Flattening (Start Earning)

Arkad advises saving 10% of your annual income to start building up your wealth (or purse): “For every ten coins thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul”.

  • Set aside 10% of your income for you!
  • You can use that other 90% to pay bills and other expenses. But that 10% is specifically for you to save and invest in later on.
  • It seems small at first, but gradually, you’ll start to have a good amount set aside.

2. Control Thy Expenditures (Spend Less Than You Earn)

Arkad advises against luxury expenditures that ultimately become confused as necessities: “The gold we may retain from our earnings is but the start”, and, “What each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary”, and, “Confuse not the necessary expenses with thy desires”.

  • On to the subject of thrift – when you have extra money, it’s tempting to splurge and buy fancy things. But don’t! Make sure to live within your means and only take on necessary expenses.
  • Arkad says: “What we call ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.”

Always Pay Yourself First:

If you’re not in debt:

  • Set aside 10% of your income before anything else; and
  • Live on the 90% that’s left.

If you are in debt:

  • Set aside 10% of your income before anything else;
  • Repay your creditors with 20%; and
  • Live on the 70% that’s left.

Never Live Beyond Your Means:

  • Make a list of all your outgoing expenses.
  • Think very carefully about what’s strictly necessary and what’s just a luxury.
  • Cut back on things you can live without.
  • Be very wary of developing expensive habits.

3. Make Thy Gold Multiply (Invest)

Arkad advises investing and to compound the investment return from these savings: “The earnings it will make shall build our fortunes … Learn to make your treasure work for you. Make it your slave. Make its children and its children’s children work for you”.

  • Now that you have some money set aside, it’s time to put it to work. When you invest your cash, it can reproduce and bring you a steady stream of income and personal wealth!
  • Arkad’s philosophy is that “you make your gold have children, who can then also work for you.”
  • In our modern world, this might be loaning money out or getting interest from a savings account or stocks or crypto or gold.

How Can I Make Money Multiply?

  • You should surround yourself with people who want, understand and make lots of money.
  • You should only seek financial advice from the very best experts in the field. Don’t take advice from your family, friends or colleagues.
  • You should stick to the plan. Don’t underestimate the power of compounding. Trust what you know, not what you see. Let time take care of the rest.

“Advice is one thing that is freely given away, but watch that you only take what is worth having.”  -George S Clason

4. Guard Thy Treasure from Loss (Diversity/Insure)

Arkad advises against taking a risk of loss and investing get-rich-quick schemes: “Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly”.

  • Arkad warns us that there is no way to make massive amounts of money overnight. Instead, it takes time, effort, and knowledge.
  • And when you are ready to invest, make sure to start small. You need to learn to secure smaller amounts until you can handle larger ones.
  • Arkad praises the ability to reclaim your money when you need it back in a hurry.
  • Study before making an investment so you can be sure it is a wise one.
  • You won’t get rich overnight… but you will get rich eventually.

Common Traps We Should Avoid:

  • Don’t get into debt.
  • Don’t help people in ways that mean you take on their financial burdens.
  • Don’t lend money to others without taking some guarantee of repayment.
  • Don’t forget to protect your income and assets with diversification and insurance.
  • Don’t invest in things you don’t fully understand.
  • Don’t get sucked into get rich quick schemes.
  • Don’t put your money into investments which don’t pay out dividends (i.e., cash).

5. Thy Dwelling a Profitable Investment (Own Your House)

Arkad advises buying versus renting your principal residence, and to use your residence to establish a business: “I recommend that every man own the roof that sheltereth him and his”, and, “Nor is it beyond the ability of any well-intentioned man to own his home”.

  • Arkad tells us that “every man should own the roof that sheltereth him and his.” That’s because it can reduce your cost of living and make more money available for your desires.
  • Instead of just throwing your money away on rent, you’ll be building equity in an investment. And can pay off big when planning for future income.

6. Insure a Future Income (Plan for Retirement)

Arkad advises on having a pension and future retirement income: “Therefore do I say that it behooves a man to make preparations for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them”.

  • Arkad recommends planning for retirement in advance to ensure your treasures and protect your family. Naturally, having a savings account or retirement pension with a lot of money saved up is great.
  • But you can also rent out the properties that you bought earlier in life. Either way, coming up with a plan now should ensure you’ll be comfortable when you’re older.

“The more wisdom we know, the more we may earn. That man who seeks to learn more of his craft shall be richly rewarded.” -George S Clason

7. Increase Thy Ability to Earn (Create Multiple Streams of Income)

Arkad advises to keep developing your own skills to increase your investing wisdom and also to increase your earnings power: “The more of wisdom we know, the more we may earn”, and, “That man who seeks to learn more of his craft shall be richly rewarded”.

  • Want to earn more? Develop your mindset and your skills! The more wisdom you have, the more you can earn.
  • Choose knowledge over gold — a bag of books over bag of money.
  • Doing all of these things can help you become a better investor and increase your ability to earn. Whatever you do, start small. Eventually, you can go bigger as you learn and become more capable.

“You’ve learned the lessons well.
You first learned to live on less than you earn.
Next you learned to seek advice from those who are competent.
Lastly, you’ve learned to make gold work for you.” -George S Clason

The 5 Laws of Gold

  1. The First Law of Gold. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.
    • Arkad’s advice here is very similar to the First Cure, which is that saving is the start towards building wealth.
  2. The Second Law of Gold. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.
    • Arkad’s advice here is very similar to the Third Cure, which is that these savings can themselves grow and compound your wealth.
  3. The Third Law of Gold. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
    • Arkad’s advice here is similar to the Fourth Cure, which is about being patient and having a long-term view.
  4. The Fourth Law of Gold. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.
    • Arkad’s advice here is about investing in what you know about and understand. Also, not to invest in schemes which seasoned investors would not recommend (e.g. buying based on “stock tips”).
  5. The Fifth Law of Gold. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.
    • Arkad’s advice here is about avoiding get-rich-quick or very aggressive wealth creation strategies.

Let’s See Some Parables

Story-1: The Gold Lender of Babylon

Gold lender Mathon’s advice on lending.

When lending, only lend to those you trust, who are knowledgeable in their field and have the means to repay. If possible, you should even consider taking some collateral worth the value of the loan. This winning combination of factors ensures you’ll get your money back eventually.

The moral: It’s better to have a little caution than a great regret.

Story-2: The Walls of Babylon

Babylon is under attack, and the citizens are afraid. The guard assures them all the walls will hold, as they are strong and fortified.

Babylon does survive the attack, and Clason uses this to illustrate that we need financial security throughout life. You never know when you’ll be under attack – whether you lose your job or have some emergency medical bills.

The moral: We cannot afford to be without adequate protection.

Story-3: The Camel Trader of Babylon

Dabasir was sold as a slave and was trained as a camel tender. One of his master’s wives, Sira, asks him if he has the soul of a free man or slave. After a while, he realizes he wants to repay his debts, so she helps to free him.

He works so hard to pay off his debts using a precise budget.

But in the end, he makes things right and proves he has the soul of a free man.

The moral: Where the determination is, a way can be found.

Story-4: The Luckiest Man in Babylon

Sharru Nada was a slave working for a baker, where he made extra pastries and shared the money with his master. He wanted to work hard so he could buy back his freedom.

Unfortunately, his master gambled all his money, so Sharru was sold again and almost condemned to a hard labor life before his friend purchased him. His friend was able to do this because Sharru taught him about the value of hard work.

The moral: Hard work can be your best friend in times of distress and help you achieve many things.


Morals: –

  • A part of all you earn is yours to keep.
  • Men of action are favored by the goddess of good luck.
  • Better a little caution than great regret.
  • We cannot afford to be without adequate protection.
  • Where the determination is, the way can be found.

From the book:-
The Richest Man in Babylon by George S Clason

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