Lessons from the Richest Man in Babylon

So how did a chariot-maker become the richest man in Babylon? This question is the heart of my curriculum – and Clason’s story. It begins with a scribe named Bansir and his friend, a skilled musician named Kobbi. Both have worked hard all their lives – but have little money to show for it. They decide to visit their childhood friend, Arkad, and ask him how he – who started from the same place as they – built extraordinary wealth while they remained poor.

Now, many students guess that Arkad won the lottery, or inherited wealth, or perhaps married rich – all plausible scenarios. But for Arkad, none of these things had happened. Instead, Arkad learned something – principles that governed how wealth behaves, which he called “Seven Cures for a Lean Purse.” He agreed to teach his friends these principles, which remain as relevant now as they did then.

1. Start thy purse to fattening. Pay yourself first. For every ten coins you place in your purse, spend no more than nine. In modern terms, save at least 10% to 20% of every paycheck before you pay any other bill. Automate the transfer. (Note: If your employer offers a 401(k) match and you are not capturing it, your purse is leaking faster than you are filling it.)

“But professor,” typically states at least one student, “I have bills – rent, groceries, school, gas – there’s nothing left for me to save.”

Arkad’s friends said this, too, and he replied; “Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed, the sooner shall the tree grow.” What Arkad meant is that even if you cannot reach the 10% – perhaps you can only save 5%, or even 2% – you should save what you can and then increase that percentage. The key is to start.

2. Control thy expenditures. Do not confuse your necessary expenses with your desires. The desires will expand to whatever income you bring home unless you discipline them. We call this “lifestyle inflation” – when new income or wealth prompts increased spending, even though you do not need to do so. Instead, focus on spending intentionally. Arkad learned that no matter how much he earned, his expenses would always grow – unless he controlled them deliberately.

Track your spending for sixty days; you will find at least $200 a month that is leaking out for things you do not actually value. Redirect it towards your goals – emergency fund, retirement, paying off debt, etc.

3. Make thy gold multiply. A coin in a jar buried in the garden remains one coin. A coin invested becomes multiple coins. Put your savings to work so they generate returns – taking advantage of compound interest.

In 2026, that means having your emergency fund in a high-yield savings account, and then ensuring the rest is invested in a diversified, low-cost portfolio of mutual funds and exchange-traded funds – ideally with a multi-factor tilt toward small, value, and high-profitability companies, which the academic evidence suggests possesses a high probability of outperforming the market over very long time periods (20 years or more). The point Arkad made is the same point Eugene Fama would later win a Nobel Prize for clarifying: capital must be at work to grow.

4. Guard thy treasures from loss. Arkad knew that loss could come both from theft and from bad investments, warning his students, “Better a little caution than a great regret.” He told stories of men who lost everything by investing in schemes they didn’t understand or with men who weren’t trustworthy. While there is no way to avoid all risk, Arkad knew that there were principles to guide him in taking appropriate risk. In 2026, these principles are still very similar:

• Never invest in things you don’t understand.
• Seek counsel from those experienced in handling money.
• Ensure your advisor is a fiduciary (legally required to act in your best interests).
• Beware of investments promising unrealistic returns.
• Maintain insurance to protect against catastrophic loss (appropriate to your personal situation).
• Diversify – don’t put all your wealth in one place.

In 2026, this principle applies most acutely to two traps: high-fee complex products sold by commission-based salespeople, and the algorithmically-amplified “get rich quick” advice that fills every social-media feed.

5. Make of thy dwelling a profitable investment. Owning rather than renting builds equity – if you can afford the true cost of ownership (mortgage, property taxes, insurance, maintenance, opportunity cost on the down payment). But Arkad never says “buy the largest house you can qualify to finance.” Buy modestly. The Babylonian who buys above his means is, in any century, the man whose dwelling owns him.
6. Ensure a future income. Prepare for the day when you can no longer earn. In modern terms: contribute to retirement accounts. Buy disability insurance. Buy term life insurance if anyone depends on your income. Build an emergency fund. Future-you is a real person who will thank you, or curse you, for what present-you does today.
7. Increase thy ability to earn. Invest in your own skills. The most reliable wealth-building strategy in your twenties and thirties is not stock picking; it is building human capital that the market is willing to pay more for next year than this year. Get the certification. Read the book. Attend the conference. Negotiate the raise.