Not long ago I read the book The Richest Man In Babylon and what I learned in that book sounded like some very wise advice about money so I decided to put it to the test. After nearly 2 months of following the principles laid out in that book I have found myself paying off my debt faster than I ever thought possible and also saving more money than I thought possible which has me quite excited.
When I got on my own at 20 I went with my dad to the bank to put my bank account into my name. The lady asked if I wanted a savings account too and my dad said no that I only need my checking. I still remember the look on that lady’s face. At the time I didn’t know what I wanted so I just followed my dad’s advice even though I knew there had to be a better way except I didn’t know how to find it. It’s been quite a journey for me of learning how money wants to be my friend and a tool for me to use in creating my possible life and the other evening I realized that I deeply wished I could go back to my 20 year old self and tell her the things I learned from the book The Richest Man In Babylon and how simple and easy it is to use.
If you are unfamiliar with this book you can find for free online to download as well as buy physical copies of it. It is a parable written in 1926 by George S. Clason through which he gives financial advice set centuries ago in ancient Babylon. In short, here are the principles and laws laid out in today’s English(the book is much more fun to read and will give you a visual and deeper understanding for each one of these):
The Seven Cures for a Lean Purse
These are the seven practices for building wealth, managing money, and improving your financial situation.
- Start filling your purse: Save at least 10% of everything you earn. Pay yourself first before spending money on anything else. Make saving a regular habit.
- Control your spending: Learn to live on less than you earn. Separate your actual needs from your wants. Create a spending plan so that your money covers your priorities without consuming all your income.
- Make your savings grow: Put your accumulated savings to work so they generate additional income. Your money should begin earning money of its own.
- Protect your wealth from loss: Be careful where you put your money. Invest only in things you understand, seek knowledgeable advice, and avoid opportunities that promise unrealistic returns.
- Make your home an investment: Work toward owning a home, or securing stable and affordable housing, rather than continually spending money on housing without building any ownership or long-term value.
- Build income for the future: Prepare for the years when you may no longer be able or wish to work. Build savings, investments, and other sources of income that can support you and your family in the future.
- Increase your ability to earn: Develop your knowledge, skills, and abilities. Become better at your work, look for opportunities to grow, and continually improve your capacity to earn money.
The Five Laws of Gold
These laws explain how money behaves, how to make it grow, and how to avoid losing it.
- Money comes to those who consistently save. Wealth grows for people who regularly set aside at least 10% of what they earn. They do this to build financial security for themselves and their families.
- Money grows when you put it to productive use. Savings grow when they are invested wisely and generate additional income. Money should not simply sit unused; it should be put to work in ways that create more wealth.
- Money stays with people who protect it carefully. Your money is safer when you make thoughtful decisions and seek guidance from knowledgeable, trustworthy people before investing it.
- Money is lost when you invest in things you don’t understand. Don’t put your savings into businesses, investments, or opportunities you don’t understand. Don’t let excitement, pressure, or someone else’s promises convince you to risk your money.
- Money disappears when you chase unrealistic returns. Avoid get-rich-quick schemes, dishonest people, and investments promising extraordinary profits with little risk. Don’t let inexperience, wishful thinking, or greed override good judgment.
These are modern-language interpretations of the original principles.
All Twelve Principles at a Glance
Here is a condensed version:
| The Seven Cures | The Five Laws |
|---|---|
| 1. Save at least 10% of everything you earn. | 1. Consistent saving builds wealth. |
| 2. Control your spending. | 2. Put money to work so it grows. |
| 3. Invest your savings to create more income. | 3. Protect money through careful investing. |
| 4. Protect your money from loss. | 4. Avoid investments you don’t understand. |
| 5. Work toward owning a home. | 5. Avoid unrealistic promises and risky schemes. |
| 6. Prepare for future income needs. | |
| 7. Increase your ability to earn. |
One additional principle worth remembering:
Although it isn’t one of the Seven Cures or Five Laws, the book also teaches an important lesson through its other stories: Your financial success depends not only on how much you earn, but on what you do with what you earn. The book repeatedly emphasizes discipline, patience, determination, learning, and taking responsibility for your financial future. One thing worth keeping in mind when applying these principles today: the advice about homeownership, investments, and saving percentages should be adapted to individual circumstances. The underlying principles of living within your means, building reserves, protecting your money, and developing earning power remain useful.
This is the wisdom I wish to share with my 20 year old self. I think I would be in a much better place financially than I am right now but it’s also not too late to try again and change the ways we have been taught as well as learn new and better ways to create our possible life. Since I don’t know how to go back and tell my younger self these things to help them, I decided to share this here because I believe than anyone, no matter their age, can benefit from this wisdom and guidance about money. May you be blessed as you create your possible life!