The Richest Man In Babylon
June 16, 2023
4 min read
📚 arvy's Book Club
arvy's Teaser: A book written in 1926 about a city that fell 2,500 years ago — and it's still the best introduction to building wealth ever written. Clason's parables from ancient Babylon contain three ideas so powerful that every modern financial plan is built on them. Here they are — translated for Swiss investors in 2026.
The Book in 60 Seconds
The Richest Man in Babylon (1926) by George S. Clason teaches personal finance through parables set in ancient Babylon. The protagonist, Arkad, becomes the wealthiest man in Babylon not through luck or inheritance, but through simple financial rules. The book has sold over 2 million copies and remains a staple of financial literacy — because its core principles are timeless.
George S. Clason · 1926 · Personal Finance Classic
Idea 1: Pay Yourself First — Before Anything Else
Arkad's first law: "A part of all you earn is yours to keep." At least 10% of every income — before rent, before food, before anything. Not what's left after spending. What you set aside before spending.
This sounds trivially simple. It's also the single rule that separates people who build wealth from people who don't — regardless of income level. A person earning CHF 80,000 who saves 20% will be wealthier than a person earning CHF 200,000 who saves nothing. Always.
The modern version: automate it. Set up a standing order on the 1st of every month. The money moves to your 3a and investment account before you can spend it. What you never see, you never miss.
Swiss Translation
Salary CHF 6,000 net → Day 1: CHF 605 to Pillar 3a (max), CHF 595 to savings plan = CHF 1,200 invested before a single franc is spent. The remaining CHF 4,800 is your living budget. Pay yourself first isn't a metaphor in Switzerland — the 3a literally pays you back through tax savings of CHF 1,500–4,000/year. (→ 3a Guide)
Idea 2: Make Your Gold Multiply — Put Saved Money to Work
Arkad's second law: "Gold in a purse is gratifying to own. But gold that earns more gold is the true source of wealth." Saving alone isn't enough. Your money must work for you — earning returns that themselves earn returns.
In 1926, this meant lending money or investing in trade caravans. In 2026, it means: don't leave your savings in a 0.75% bank account. Invest them. The difference between "saved" and "invested" over 30 years is staggering.
CHF 500/Month Over 30 Years
Savings account (0.75%)
CHF 214,000
Invested (7% return)
CHF 610,000
Same discipline. Same amount. CHF 396,000 difference — that's the cost of not investing.
Clason wrote this in 1926. The math hasn't changed. Capital that sits idle loses purchasing power to inflation every year. Capital that's invested compounds — and compound interest is the most powerful force in finance. (→ arvy Investment Calculator)
Idea 3: Guard Your Wealth Against Loss — Invest Only With Those Who Know
Arkad's third law — and the one most people ignore: "Guard thy treasure from loss by investing only where thy principal is safe, where it may be reclaimed if desirable, and where thou wilt not fail to collect a fair rental."
In Clason's parables, the most common path to ruin isn't bad luck — it's trusting incompetent advisors. A brickmaker gives gold to a jeweller to buy gems he knows nothing about. A chariot builder invests in a ship with a captain who's never sailed. Both lose everything.
The modern equivalent: investing in things you don't understand because someone promised high returns. Crypto projects you can't explain. Structured products you've never read. "Hot tips" from colleagues. Private deals from acquaintances.
The Investor Lesson
Invest with people whose track record you can verify, in products you understand, with fees you can see. The Swiss advantage: FINMA-regulated asset managers are legally bound to act in your interest. Tax-free capital gains remove the need for exotic structures. And a diversified portfolio of quality companies isn't exciting — but Arkad would approve.
What This Means for Swiss Investors
Babylon fell. Its financial wisdom didn't. Here's how Clason's three laws translate directly into the Swiss system:
| Babylon's Law | Swiss Implementation |
|---|---|
| Pay yourself first (10%+) | Standing order on the 1st: CHF 605/month to 3a + additional to savings plan. Automated, non-negotiable. Target: 20% savings rate. (→ Budget Guide) |
| Make your gold multiply | 3a invested in equities, not parked in a savings account. Free assets in a diversified portfolio. Capital gains tax-free — Switzerland is the best country in the world to compound. (→ Savings Plan) |
| Guard against loss | FINMA-regulated asset managers. Transparent fees. No exotic products. No leverage. 6-month emergency fund before any investing. (→ Beginner's Guide) |
arvy's Take
What holds up: Everything. This book is 98 years old and every page still applies. The three laws — save first, invest, protect against loss — are the foundation of every serious financial plan ever written. Clason's genius was wrapping them in stories that are actually enjoyable to read. If you're looking for one book to give someone who has never thought about money, this is it.
What's missing: The book is deliberately simple — which means it doesn't address modern complexity. There's no discussion of diversification, asset allocation, or the difference between active and passive investing. The "guard against loss" advice could be misread as "avoid all risk" — which is the opposite of what long-term investors should do.
What we'd add: Clason says save 10%. In Switzerland, aim for 20% — and put the first CHF 605/month into the 3a before anything else. The 3a is Clason's "pay yourself first" principle with a government-funded bonus. Arkad would have loved it.
3 Sentences to Remember
1. Pay yourself first: set aside at least 10% before you spend a single franc.
2. Saved money must work: invest it, or inflation eats it.
3. Guard against loss: invest only in what you understand, with people you can trust.
Buy the book
English (Amazon) · Deutsch (Amazon)
Also in Book Club: Psychology of Money → · Almanack of Naval Ravikant →
Pay yourself first. Let your gold multiply.
Arkad's wisdom, automated: max out Pillar 3a, invest the rest in quality companies, let compound interest do the work. From CHF 1/month.
This article was written by Florian Jauch, CFA, Co-Founder of arvy, and reviewed by Thierry Borgeat and Patrick Rissi, CFA.
Disclaimer: This article is for general informational purposes only and does not constitute personal investment advice. Amazon links are affiliate links. arvy is a FINMA-supervised asset manager.
