10 Money Lessons from “The Richest Man in Babylon”

Have you ever picked up a book only to realize years later that you were too young or immature to grasp its true wisdom?

It happens to the best of us. For me, one of those books was The Richest Man in Babylon.

I first encountered it over a decade ago when someone told me it was a must read if I wanted to get rich. At the time, the language and concepts flew right over my head-too many “thy” and “thou” for my taste.

But there’s a reason that book, written in 1926, is still considered a classic in personal finance today. So, in the spirit of rediscovery and learning from past mistakes, let’s dive into 10 time-tested money lessons from this ancient masterpiece.

1. Don’t Be Shy About Pursuing Wealth

One of the greatest obstacles to achieving wealth is the simple fact that many people never really pursue it. In The Richest Man in Babylon, Arkad, the richest man in Babylon, makes it clear that wealth doesn’t just happen-it’s something you have to desire and actively pursue.

He says, “Wealth is power. With wealth, many things are possible.

It’s easy to dismiss wealth as something only the greedy pursue, but the truth is that money plays an important role in our lives. It enables us to fulfill many of our desires, whether it’s financial freedom, security, or the ability to help others.

But it doesn’t just magically appear. You have to want it, focus on it, and commit to building it. So don’t hide from money-use it as a tool to achieve your goals.

2. Invest in Yourself

If you want to build wealth, one of the best investments you can make is in yourself. The more knowledge and skills you acquire, the more you can earn. This idea is echoed by Arkad when he says, “The more wisdom we know, the more we can earn”.

Consider the habits of successful people like Warren Buffett, who spends 80% of his workday reading, or Elon Musk, who learned to build rockets by reading books.

Investing in yourself might mean reading, taking classes, or attending conferences. Whatever form it takes, self-improvement is a surefire way to increase your earning potential. Remember, you are your own greatest asset.

3. Act on Your Knowledge

Knowledge is powerful, but it’s useless if you don’t act on it. Arkad learned this lesson when he made a deal with a wealthy businessman named Algamish. Despite a tight deadline and difficult circumstances, Arkad delivered on his promise, and in the process learned the secret to building wealth.

The lesson here is simple: don’t just sit on the sidelines — take action.

Successful people aren’t necessarily the smartest or most talented; they’re the ones who take action. So, when you learn something new, put it into action. Don’t get stuck in analysis paralysis-just do it.

4. Find Good Advice

When it comes to building wealth, the advice you follow can make or break your financial future. It is common for people to take financial advice from friends or family members who have no real experience with money. Arkad made this mistake when he entrusted his savings to a brickmaker to buy rare jewels-a decision that predictably ended in disaster.

The takeaway?

Look for advice from people who are experts in their field. If you want to build wealth, learn from those who have done it before. Be discerning about who you listen to, and make sure their advice is worth taking.

5. Make Money Work for You

Wealth, as Arkad explains, is like a tree that grows from a tiny seed. The sooner you plant that seed (your savings), the sooner it will grow into a tree (your wealth).

But saving alone isn’t enough-you need to invest your money so it can grow and compound over time.

For example, if you save 10% of an annual income of $100,000 for 30 years, you’ll have $300,000. But if you invest that 10% in an 8% return, you’ll have over $1.1 million.

The difference is staggering, and it all comes down to making your money work for you. Whether you choose stocks, real estate, or any other form of investment, the key is to start early and be consistent.

6. Pay Yourself First

One of the most important lessons in The Richest Man in Babylon is to pay yourself first. Arkad learned from Algamish that a portion of everything you earn is yours to keep — specifically, at least 10%.

Saving that 10% of your income should be non-negotiable. It doesn’t matter how much you make; what matters is that you consistently save a portion of it.

This habit is the foundation for all other wealth-building activities. Without saving, you won’t have the capital to invest or take advantage of opportunities.

7. Know Your Necessary Spending

We often confuse needs with wants, leading us to spend more than we planned. Arkad addresses this by explaining that necessary expenses will always grow to match your income unless you control them.

In other words, just because you have more money doesn’t mean you need to spend more. Distinguish between your real needs and your wants.

For example, you may tell yourself that you “need” the latest gadget, but it’s really a want that can be postponed or avoided.

8. Beware of Risky Investments

Arkad’s son learned the hard way that investing in things you don’t understand can lead to disaster. He lost his inheritance by investing in horse racing when he knew nothing about horses.

The lesson here is to stick to investments you understand or consult with experts who do. Don’t get swept up in the excitement of a “sure thing” without doing your homework.

In today’s world, this may mean avoiding speculative investments or get-rich-quick schemes. Stick to what you know and be careful with your hard-earned money.

9. Continue to Learn and Grow

Building wealth is a lifelong journey. Just as Arkad continually sought to improve his skills, you should never stop learning. The financial landscape is constantly changing, and staying informed is critical to making smart decisions.

Whether it’s reading books, attending seminars, or following the financial news, make continuous learning a part of your routine.

The more you know, the better equipped you’ll be to meet the challenges and opportunities that come your way.

10. Share Your Wealth

Finally, Arkad teaches that wealth is not just for personal gain — it is something to be shared. Whether it’s helping your family, giving to charity, or investing in your community, sharing your wealth can bring fulfillment and purpose to your financial journey. And that can lead to collective wealth growth.

In conclusion, The Richest Man in Babylon offers timeless wisdom that is as relevant today as it was nearly a century ago. By taking these lessons and applying them to your life, you can build a solid foundation for financial success.

So, dust off that old book, start seeking wealth, invest in yourself, and take action.

Your financial future is in your own hands…