In the early 1920s, George S. Clason wrote a series of articles about acquiring and keeping wealth that were passed out by insurance companies to their customers. In 1926, he combined these essays into a book titled, The Richest Man in Babylon. To this day, that book remains in print.
In it, a series of parables highlighted Arkad, the wealthiest man in the area, who rose from poverty after learning from Algamish, the moneylender, lessons of saving and investing.
Also, Dabasir the slave applied these rules to become a wealthy camel trader himself. Dabasir is portrayed as laboriously chronicling his progress, etching it for the record in cuneiform onto clay tablets.
Several millennia later, a Professor Shrewsbury at England’s Nottingham University is asked by archeologists to translate the newly discovered tablets. After doing so, he sees the value of Dabasir’s experience.
Being deeply in debt himself, the Professor and his wife decide to apply these rules.
They contact their creditors, stating they will pay them off on a regular basis. The couple start living within their means and saving a portion each month. In time, they emerge debt free “with money to jingle in their pockets.”
At its core, the set of rules involves dividing your monthly earnings into portions – saving 10% of all you earn; applying 20% to pay off debts; using the remaining 70% to take care of living expenses for you and your family. Then, once you’ve accumulated savings, investing some of it wisely.
“A part of all I earn is mine to keep.”
Perhaps the most important part of this plan is to pay yourself first.
People seldom do this last part, which is probably why most of us fall far short of having enough money to live prosperous lives down the line. The tendency is to take care of everything else first, by which time little or nothing is left to save.
The result is that in the wealthiest nation in the world, tens of millions of Americans arrive at retirement age with little or nothing beyond a bare monthly income expected from Social Security – an expectation that is becoming increasingly problematic.
