A 100-Year-Old Book That Still Outperforms Most Modern Financial Advice
George S. Clason published The Richest Man in Babylon in 1926 — exactly one hundred years ago this year. Set in ancient Babylon, the book uses parables to teach principles of wealth creation and preservation that have not aged a single day. It remains one of the bestselling personal finance books ever written, and for good reason: its lessons are simple enough to understand in an afternoon but powerful enough to transform a family’s finances over generations.
For estate planners and anyone thinking about long-term family wealth, this book offers a framework that connects directly to the decisions you make about Wills, trusts, and succession planning.
The Seven Cures for a Lean Purse
The heart of the book is a series of lectures delivered by Arkad, the richest man in Babylon, to the citizens of the city who want to know how he became wealthy. His seven principles form the backbone of virtually all personal financial planning:
1. Start thy purse to fattening — save at least 10 per cent of everything you earn.
This is the most famous lesson and the one most people remember. Pay yourself first. Before bills, before expenses, before anything else — set aside at least one-tenth of your income. Arkad’s insight is that most people’s expenses expand to consume whatever they earn. By removing 10 per cent before it can be spent, you create wealth almost invisibly.
The estate planning connection: if you have been saving consistently for 30 or 40 years, the accumulated wealth may be significant enough to trigger inheritance tax. The very discipline that built your wealth now requires a plan to protect it.
2. Control thy expenditures — do not confuse necessary expenses with desires.
Babylon’s richest man distinguishes between needs and wants. He observes that as people earn more, their “necessary” expenses grow to match — a phenomenon modern behavioural economists call lifestyle inflation. The cure is budgeting: deciding in advance what you will spend and sticking to it.
3. Make thy gold multiply — invest your savings so they generate returns.
Money saved but not invested is money that slowly loses value to inflation. Arkad’s principle is to put your savings to work — in property, in business, in lending — so that your wealth grows even when you are not actively earning.
4. Guard thy treasures from loss — protect your capital before seeking high returns.
This is perhaps the most relevant lesson for modern investors. Arkad warns against speculative investments, get-rich-quick schemes, and ventures in which you have no expertise. His rule is simple: seek advice from those who handle money professionally, and never invest in something you do not understand.
The estate planning parallel is direct: the families who preserve wealth across generations are the ones who prioritise protection over speculation. Trusts, insurance, and diversification are the modern equivalents of Arkad’s guarded treasure.
5. Make of thy dwelling a profitable investment — own your home.
Arkad advocates home ownership as both a practical and a financial decision. In the UK today, property remains the largest asset in most estates — and the structure of that ownership (joint tenants vs tenants in common, for example) has significant implications for inheritance tax planning.
6. Ensure a future income — plan for retirement and for the time when you can no longer work.
Three thousand years before pensions existed, Arkad understood that the ability to earn is temporary. His advice is to make provisions now for the time when age, illness, or circumstances prevent you from working. In modern terms: pensions, life insurance, critical illness cover, and income protection.
7. Increase thy ability to earn — invest in yourself.
The final cure is about personal development. Arkad encourages continuous learning, skill-building, and professional growth. The more valuable you are, the more you earn, and the more you can save and invest.
The Five Laws of Gold
Later in the book, Clason introduces five laws that govern wealth — and it is the fourth and fifth laws that carry the most weight for estate planning:
The Fourth Law: Gold slips away from the person who invests it in businesses or purposes with which they are not familiar, or which are not approved by those skilled in its keep.
The Fifth Law: Gold flees the person who would force it to impossible earnings, or who follows the alluring advice of tricksters and schemers.
These laws are a warning against two of the most common causes of family wealth destruction: investing outside your competence and chasing unrealistic returns. Every financial adviser has clients who lost substantial sums to investments they did not understand — often because they were too embarrassed to ask questions or too proud to seek professional advice.
Why This Book Matters for Estate Planning
The Richest Man in Babylon is ultimately a book about intergenerational wealth. Arkad does not just build wealth for himself — he teaches his son, his community, and his city how to do the same. The underlying message is that wealth without wisdom is temporary, and the greatest gift you can give the next generation is not money but financial literacy.
This connects directly to modern estate planning challenges:
- Trusts exist precisely because we recognise that not everyone is ready to receive wealth responsibly. A discretionary trust allows trustees to release funds as beneficiaries demonstrate the capacity to manage them — Arkad’s principles in legal form.
- Letters of wishes allow you to pass on not just assets but values — explaining to your beneficiaries what the money represents and how you hope it will be used.
- Financial education for children is increasingly recognised as one of the most important elements of succession planning. The families that sustain wealth across three or more generations are the ones that teach financial principles early.
The Lesson That Ties Everything Together
The Richest Man in Babylon teaches that wealth is not about luck, inheritance, or circumstance — it is about discipline, protection, and the willingness to seek expert guidance. These are exactly the same principles that underpin effective estate planning.
Build wealth through consistent saving. Protect it through proper planning. Pass it on through trusts, Wills, and family education. And above all, seek advice from those who know what they are doing.
One hundred years after publication, Arkad’s wisdom has not dated. If anything, in a world of cryptocurrency speculation, social media financial advice, and unprecedented levels of personal debt, his principles are more necessary than ever.