3 Timeless Lessons from The Richest Man in Babylon
You don’t need to be born with a silver spoon to learn how to build a fortune.
All it takes is understanding the key lessons in building wealth.
When archaeologists uncovered ancient clay tablets, they discovered stories written thousands of years ago.
One in particular was the tale of Dabasir, a camel trader who spent recklessly, racked up huge debts, and somehow ended up being sold into slavery.
But what he did next to free himself changed everything…
Dabasir realized that escaping debt wasn’t about luck or working extra hours, but taking control of his finances and learn financial discipline.
His approach was straightforward: he allocated a portion of his earnings for expenses, set aside a fixed amount for savings, and dedicated another portion to repaying his debt until it was fully paid off.
And through discipline, persistence, and smart planning, Dabasir managed to break free from the chains of debt within four years.
The main point of this blog isn’t just to recount Dabasir’s story, but to show how his lessons can guide you in building and protecting your money today.
So, if you are struggling with money, you are in the right place.
Financial Wisdom is attained only by those who are eager to learn.
Build Financial Discipline
One of the core tenets for building financial discipline is to set aside 10% of your income for yourself.
Remember, it is the money you set aside that is truly yours.
And for the rest of your income?
The rest of the income disappears from your pocket and gets claimed by landowners, merchants, retailers, or healthcare providers.
When you spend every dollar you make like that, you’re essentially working for everyone but yourself.
A part of saving 10% for yourself also comes from what you do with teh ther 90%.
And that is why Clason emphasized the importance of controlling your expenditures.
“What each of us calls our “necessary expenses” will always grow to equal our incomes unless we protest to the contrary.
Don’t confuse necessary expenses with desires; live within your means.
Be mindful of lifestyle inflation.
As your income grows, it’s easy for expenses to rise alongside it.
However, if you keep your spending steady and save the extra income instead, your wealth will grow much faster.
Scrutinise your expenses and habits to see what works best for you.
And a way to do this is to have a solid budget, using the 50/30/20 rule, where
50% of income to essential needs
30% of income wants
20% of income to savings
Before we move on, if you would like to learn more about budgeting, feel free to check out our blog on “Financial Literacy Concepts You Need to Know in 2025
While most budgeting guides recommend saving 20% of your income, the book particularly emphasized saving 10%.
And there’s a reason for this difference.
The book was published 100 years ago, and many aspects, including inflation and living expenses, have changed since then. However, the key takeaway is that regardless of the percentage you choose to save, the important thing is to take that first step and start saving.
Even if you start with saving 10%, master that first, and then you can level up to 20%.
Remember, if you want to get rich, living from paycheck to paycheck will make it impossible..
Focus on building your wealth first, and then enjoy the lifestyle you want.
Invest Your Money Wisely
“A man’s wealth is not in the coins he carries in his purse; it is the income he buildeth, the golden stream that continually floweth into his purse and keepeth it always bulging.”
Now that you have stacked up some savings for yourself, it’s time to put that money to work through investing and retirement planning.
Retirement Accounts
Retirement accounts are an excellent option to ensure a secure future income.
Not only store your savings, but they also provide opportunities for growth over time.
Types of accounts are as follows.
1) Employer-Sponsored Retirement Plans
403(b): 403(b) is a retirement plan designed for employees in public schools, healthcare, some religious institutions, and other tax-exempt organizations.
401K: A 401(k) is a retirement savings plan offered by many employers to help you save money for the future while also giving you tax advantages.
2) Traditional IRA: a personal retirement savings account that offers important tax advantages to help you save for the future.
SEP IRA: Retirement account for self-employed individuals, freelancers, and small business owners
SIMPLE IRA: Allows both the employers and the employees to contribute towards retirement savings, benefiting both with tax advantages.
3) Roth IRA: A Roth IRA allows you to put in after-tax dollars, which means you pay taxes on the money before it goes into the account.
To find out which account is best for you, check out our latest blog on Retirement Planning.
Investments
Where to Invest
Stocks or Equities: A share of stock represents a portion of ownership in a public or private company. When you purchase a stock, you are entitled to receive dividend distributions if the company makes a profit. While stocks can offer higher returns, they also involve a higher level of risk depending on market conditions. There is no set interest rate, but when adjusted for inflation, the annual return averages around 6.47%.
Bonds: A bond is a type of loan where the investor lends money to the government or a corporation to raise funds. The borrower pays back the principal amount once the bond reaches maturity. While bonds tend to have lower returns compared to stocks, they are generally considered a safer investment option.
Mutual Funds: An investor can buy shares of stocks or bonds from multiple companies. Most mutual funds are actively managed, meaning they aim to outperform the average market growth of 6.47%. Since the fund invests in different companies, it’s much safer than buying just one stock.
Cryptocurrency: Cryptocurrency is a digital form of currency that allows investors to purchase coins or tokens issued by companies. It can be used in transactions and increases in value. Always invest wisely. Memecoins like doge and pepe can be very volatile, while bigger projects like bitcoin and solana tend to be more stable.
Real Estate: Real estate investments involve investing in physical properties that can be utilized and generate income. You can earn money through rental income or by benefiting from growth in property values over time.
Collectibles: Collection or purchase of rare items that could become antiques, potentially increasing in value in the future.
Commodities: Commodities are types of raw materials such as oil, energy, or metals. Commodities protect investments from inflation.
How to Invest
It is nice to be wary of every good opportunity that comes your way.
But do not fall for the “get rich fast” schemes.
If any investments seem to be too good to be true.
Then it probably is.
You need to be patient with your investments, give them the time to grow.
Take Arkad, for example, he entrusted his gold to a brickmaker who promised to bring back rare jewels from his journey.
When the shipment arrived, the “jewels” turned out to be worthless glass, and Arkad’s savings were gone.
This loss was not simply bad luck but a careless mistake.
Arkad had trusted his wealth to someone without the right knowledge.
The brickmaker knew nothing about gems, and the money should never have been lent to him.
Just like Arkad trusted the brickmaker, many people today still fall prey to such scams or make risky money choices.
This is exactly why you should remain cautious, do your research, and protect the hard-earned money you’ve worked for.
But here’s the thing, protecting yourself from unexpected risks involves more than just avoiding scams or making wise investments.
It also means protecting your ability to earn in case the unexpected occurs, which leads us to the final lesson.
Protect Your Income
Your health and happiness are just as important as investing your money.
We can’t predict the future, but we can prepare for it by having the right disability insurance.
A little caution today is far better than deep regret tomorrow.
Although the topic of disability insurance is not directly discussed in the book, as insurance did not exist in ancient Babylon, it ties back to the main point Clason never stopped emphasizing: “Protecting your income from unexpected risks.”
Disability insurance protects a portion of your income at times when you get an injury or are diagnosed with an illness.
No matter the injury, disability insurance provides the support you need during vulnerable times.
Think of it as a binding contract between you and the insurance company to pay a specific monthly benefit while you are disabled. The benefits you receive can be used on anything you need, whether it's paying rent, bills, or debt.
Disability insurance policies have five basic features:
Premium: A fixed amount you pay to keep your policy active. Premiums can be paid on a month, quarterly, or yearly basis. The amount you pay may vary based on your health and the benefit amount.
Benefit: The benefit you receive when you can’t work, usually replacing 60-70% of your income.
Benefit period: The length of time for which your insurance company will provide you with the benefits.
Waiting period: Also known as an elimination period. It is the amount of time you have to wait after disability insurance can start receiving benefits.
There are two primary types of disability insurance:
Short-term disability insurance
Long-term disability insurance
Short-Term Disability Insurance
With short-term disability insurance, you can help yourself fill the income gap for workers recovering from injuries or illnesses without any financial hardship.
How does it work? Most short-term disability policies kick in within 7 to 14 days of your inability to work. They usually provide benefits for 3 to 6 months. Some plans may extend up to a year.
The duration of benefits depends on the provider, so it’s important to review your insurance plan to understand what circumstances are covered and the extent of the coverage provided.
STD policies typically replace 50% to 70% of your regular salary, helping you:
Pay your monthly bills
Cover medical expenses
Avoid running out of your savings during a tough time
Long-Term Disability Insurance
Long-term disability (LTD) insurance has a similar concept to short-term disability; it's just that the protection lasts much longer.
Instead of covering you for a few weeks or months, a long-term disability insurance policy begins after a longer waiting period and can replace a portion of your income for years, even up to retirement age if needed.
If you were suddenly unable to work due to a long-term or permanent illness or injury, LTD insurance helps you stay financially stable for the long haul.
How does it work? The maximum monthly benefit depends on your income and occupation (typically 60% to 70% of your income).
You can determine how long you want your benefit period to be based on your state. You can choose a set number of years (like 2, 5, or 10 years), or coverage that lasts until retirement age, "to age 67".
Own-Occupation V.S Any-Occupation.
These terms define your policy and the criteria of being disabled.
Own Occupation means a person is considered disabled and can receive benefits if they can’t perform their specific career job. Even though they may be able to work in another field.
Any Occupation means you may only receive coverage from your insurer if you’re unable to work in any job, including jobs from in and out of your field. A long as you can work regardless of what the job is, you won’t receive benefits.
The Bottom Line
“Desires must be simple and definite. They defeat their own purpose should they be too many, too confusing, or beyond a man’s training to accomplish.”
The fact that you're reading this blog shows your willingness to learn.
You’ve already taken that first step, but don’t stop here!
Keep learning, cultivate skills, study, and become wiser.
If you need help, remember we are here for you!
Feel free to contact us through our main home page.
