7 Money Lessons From The Richest Man In Babylon

7 Money Lessons From The Richest Man In Babylon
 Tired of looking for new ways to improve your finances? Well why not consider using old ones instead...

The Richest Man In Babylon provides simple money lessons that anyone can use to change their financial situation - but surely a 100 year old book can't still be relevant today, can it? Let's find out...

In a hurry? Listen on the go!


I was travelling recently and found myself re-listening to the classic book, "The Richest Man in Babylon", by George S. Clason. If you haven't read it, I would highly recommend doing so.

This book is a timeless masterpiece that offers practical money lessons on how to accumulate wealth, manage finances, and achieve financial freedom – so I thought I would share my thoughts and learnings from the book with you…

In this article, I will provide a summary of the key money lessons presented in the book, and explain how these lessons are relevant to modern life and can help you to build your wealth.

Who is George S. Clason and What is the Book About?

George S. Clason was a businessman and author who wrote "The Richest Man in Babylon" in 1926. The book is a collection of parables set in ancient Babylon, and it offers timeless advice on personal finance and wealth creation.

The book was written to provide practical financial education to the average person, and it has since become a classic in the field of personal finance.

It is a story set in ancient Babylon around a character named Arkad, who is indeed, the richest man in Babylon.

Throughout the story, Arkad shares his lessons about building wealth with various people who are struggling, so that they too can begin to improve their finances.

These money lessons are known as ‘the 7 cures for a lean purse’, and we will take a look at each one in detail…

Money Lesson 1: Start Thy Purse To Fattening

Money Lesson 1: Start Thy Purse To Fattening

The first lesson presented in the book is to "Start thy purse to fattening." This means that you should always save a portion of your income before spending it.

According to the book, you should aim to save at least 10% of your income and invest it wisely…

"A part of all I earn is mine to keep.", says Arkad.

This lesson is still relevant today, as saving and investing are critical to achieving financial freedom.

The analogy given in the book is to a basket of eggs. If you put 10 eggs in a basket, yet you use 10, you will never save any, yet if you put in ten each time, but only use 9, then eventually your basket would be overflowing.

And so it is the same idea for your purse/wallet/bank account… if you constantly spend all you earn, you will never have anything to show, but by saving at least 10%, eventually you will build some capital which you can then use to further increase your wealth.

Click here to check out the money plan I proposed to help you get better with your money.

Money Lesson 2: Control Thy Expenditures

The second lesson presented in the book is to "Control thy expenditures." This means that you should live within your means and avoid overspending.

The book advises readers to create a budget and stick to it, and to avoid buying things that they do not need.

This lesson is essential for modern life, as overspending is a common problem that can lead to debt and financial insecurity.

There will always be things that you want to buy, and when you do start to build your wealth, you will be tempted to buy more and more expensive things – this is Parkinson’s law at work…

Parkinson’s law states that  no matter how much money you earn, your expenditures will increase at the same rate, so you will always end up in the same financial situation.

This is why you need to be diligent about your spending. Question whether you REALLY need the thing you want to buy, or is it a nice to have?

Delayed gratification is a powerful tool for building wealth – put off those impulse purchases until later so that you can….

Money Lesson 3: Make Thy Gold Multiply

Money Lesson 3: Make Thy Gold Multiply

The third lesson presented in the book is to "Make thy gold multiply."

This means that you should invest your savings wisely to earn a return on your investment. The book advises readers to seek the advice of knowledgeable experts, and to diversify their investments to minimize risk.

This lesson is still relevant today, as investing wisely is crucial for building long-term wealth.

The key is, as the book puts it, is to put each coin to work for you and then as each coin earns new coins – put them to work for you too.

This is using the power of compound interest to grow your wealth.

If you were to for example invest your capital into the stock market in say an S&P 500 index fund earning a 10% dividend on your £1000, then you would earn £100, increasing your capital to £1100. This is making your coins work for you.

Now you could use that profit to treat yourself, however, if you were to then re-invest your capital PLUS the profit at the same rate, your next profit would be £110. This is putting the new coins to work for you.

The more you re-invest, the quicker your pot will grow. If all you did was continued to invest £1000 a year at 10% growth from the age of 18, then you would retire a millionaire, with £1,163,909 at the current UK retirement age of 67!

Money Lesson 4: Guard Thy Treasures From Loss

The fourth money lesson presented in The Richest Man In Babylon is to "Guard thy treasures from loss."

This means that you should protect your investments and avoid risky ventures. The book says you should only invest in things you understand, and to avoid taking unnecessary risks. This coincidentally is one of Warren Buffet’s key pieces of advice too.

In the book, there is the story or Arkad’s son who has been sent to prove that he is worthy of his father’s wealth. He gets scammed by several tricksters into investing his money into things they say which are sure to make him a good return, until his money was all gone.

The same ‘tricksters’ are lurking everywhere today, with get rich quick schemes and promises of living your dream lifestyle, if only you will buy their course for £997…

The moral of the story – be vary careful of who you entrust your hard earned capital to. If it seems too good to be true, it probably is!

Money Lesson 5: Make Of Thy Dwelling A Profitable Investment

Money Lesson 5: Make Of Thy Dwelling A Profitable Investment

The fifth money lesson presented in the book is to "Make of thy dwelling a profitable investment." This means that you should view your home as an investment and work to increase its value.

The book says to maintain your home, make improvements, and avoid buying more house than you need. This will not only increase the value, but the cost of buying is usually cheaper than renting, plus once it is paid, you will have more free cash to invest.

Despite massive differences in housing costs since the book was written, this lesson is still relevant today, as owning a home is a common goal for many people, and maximizing its value is important for long-term wealth building.

The question of whether a house is an asset or a liability, as stated in Rich Dad Poor Dad by Robert Kiyosaki, is for you to answer.

Personally, I prefer to own my own home given that rental costs are significantly higher than the cost to buy, plus you have the flexibility to make it your own, and you are building equity up in it like a little piggy bank, which you can use later if you wish.

Money Lesson 6: Ensure A Future Income

The sixth money lesson presented in the book is to "Ensure a future income." This means that you should plan for the future and create a reliable source of income for yourself and your family.

The book talks about saving for retirement, investing in income-producing assets, and giving consideration to creating multiple sources of income.

Arkad makes the point that you won’t always be youthful and able to work as hard, and if you become ill or worse, die, then you need to have a plan in place to provide income and financial security for you and your family.

Don’t rely on the state to provide for you in your later years – with an aging population coupled with longer life expectancies now creeping over 100, it is not difficult to foresee state pensions becoming a thing of the past, and people with inadequate finances may find themselves running out of money later in life.

Money Lesson 7: Increase Thy Ability To Earn

Money Lesson 7: Increase Thy Ability To Earn

This money lesson is all about developing your skills and abilities to increase your earning potential. The book emphasizes the importance of continually learning and growing to enhance your value in the marketplace. This can be achieved through further education, training, and acquiring new skills that are in demand.

In today's world, where technology and the job market are constantly evolving, it's essential to remain relevant and adaptable. By investing in yourself and your skills, you can increase your earning potential and create more opportunities for yourself.

For example, let's say you work in sales, and you want to increase your earnings. You can develop your skills by attending sales training courses, reading books, or even shadowing successful salespeople. By investing in your skills and learning new techniques, you can become a more valuable asset to your employer and potentially earn more commission.

Alternatively, if you're an entrepreneur or business owner, you can increase your earning potential by investing in your business. This can be achieved by hiring skilled employees, expanding your product line, or investing in marketing to increase your customer base.


"The Richest Man in Babylon" is a classic book that offers practical advice on personal finance and wealth creation.

The lessons presented in the book are still relevant today, and they provide a roadmap for achieving financial freedom. By following these seven money lessons, you can create a strong foundation for long-term wealth building and financial security.

Remember to start by saving a portion of your income, controlling your expenditures, and investing wisely. Protect your investments and work to increase the value of your home as a capital store, and plan for the future by creating a reliable source of income.

By following these principles, you can achieve financial freedom and live the life you deserve!


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