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 that dated thousands of years ago.
One in particular was the tale of Dabasir, a camel trader who spent recklessly, racked up huge debts, and ended up being sold into slavery.
But what he did next to free himself changed everything…
Dabasir realized that escaping debt wasn't just a matter of luck or working extra hours. But, to take control of his finances and develop 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’s the money you set aside that is truly yours.
The rest of your income gets claimed by landowners, merchants, retailers, or healthcare providers. When you spend every dollar you make, you’re essentially working for everyone but yourself.
Aside from saving 10%, what you do with the other 90% matters just as much.
And that is exactly why George S. 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.
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.
So, scrutinise your expenses and habits to see what works best for you.
Incorporate the 50/30/20 budget rule into your lifestyle
Allocate 50% of income to essential needs
Spend 30% of income on wants
Save 20% of income in savings
If having a proper budget is what you are struggling with, then we've got you covered.
Check out our blog on “Financial Literacy Concepts You Need to Know in 2025 for more information.
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.
The main takeaway is that no matter what percentage you choose to save, the important thing is to get started.
Even if you start with saving 10%, master that first, and then you can level up to 20%.
Remember, if you want to get wealthy, living from paycheck to paycheck will make it impossible..
Focus on building your wealth first, and then enjoy the lifestyle you want later.
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 do they 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 and receive tax advantages.
2) Traditional IRA: A Traditional IRA is a personal retirement savings account where your money is invested in various assets to grow over time.
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 invest after-tax money now, so your investments grow tax-free.
To figure out which account works 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. Its value increases over time and can be used in day-to-day transactions. However, always invest wisely. Memecoins like Doge and Pepe can be very volatile. Try out the bigger projects, like Bitcoin and Solana, as they tend to be much 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: Collectibles are a 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’s nice to be wary of every good opportunity that comes your way.
However, only invest in places that you are familiar with.
Don’t ever 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.
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.
His loss wasn’t 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 invest in risky endeavors.
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 catch: 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 didn’t exist in ancient Babylon, it ties back to the main point Clason never stopped emphasizing: “Protecting your income from unexpected risks.”
Disability insurance protects your earnings at times you can't work due to an illness or injury, making sure you can still afford to pay your rent, utility bills, and groceries.
No matter the injury, disability insurance provides the support you need during vulnerable times.
Its policies come along with five basic features:
Premium: A fixed amount you pay to keep your policy active. Premiums can be paid on a monthly, 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
Short-term disability insurance policies typically cover about 50% to 70% of your normal salary while you are still recuperating from injuries or illnesses.
You can use the benefits you receive from short-term disability however you like.
Whether it’s to pay your monthly bills or cover medical expenses, short-term disability insurance has you covered. Plus, you don’t have to rely too heavily on your savings.
You usually receive your payout within 7 to 14 days after you file your claim. So if something happens and your income stops, you won’t have to wait long for support.
However, disability claims require proof and appropriate documentation for approval. Even if your injury or illness is apparent, you will still need medical records and so on to back up your claim.
The duration of benefits depends on the provider; most short-term disability policies can cover the first few weeks or months when you’re temporarily out of work, while some plans may extend up to a year.
So it’s important to review your insurance plan to understand what circumstances are covered, the requirements for filing a claim, and the extent of the coverage provided.
Long-Term Disability Insurance
Long-term disability (LTD) insurance has a similar concept to short-term disability. The only difference is that the protection lasts much longer.
Once the coverage from short-term disability insurance ends and you still need time to recover, long-term disability insurance steps in to provide ongoing income replacement.
You can choose how long you want your benefit period to be. Depending on your state, it can either be a set number of years ( 2, 5, or 10 years) or a coverage that lasts until retirement age, "to age 67."
Unlike short-term disability insurance, LTD policies tend to have a much longer waiting period and can replace 60% to 70% of your income.
Own-Occupation vs Any-Occupation.
These terms define your LTD policy and the criteria for being disabled.
Own Occupation: A person is considered disabled and eligible for benefits if they are unable to perform their specific job, even if they can work in another field.
Any Occupation: Under "Any Occupation," you can only receive coverage if you can’t work in any job, whether related to your field or not. As long as you are capable of working in some capacity, you will not qualify for the 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’re here for you!
Feel free to contact us through our main home page.
