It was tradition in Babylon that a son would live with his rich parents so that he can inherit.  Arkad did things differently.  He wanted his son to inherit, but his son first had to prove himself wise enough to handle so much wealth.  He gave his son Nomasir a bag of gold and three clay tablets on which he carved the 5 laws of gold.  Ten years later, Nomasir had to return and show his dad that he was worthy to become the heir of the estate.  If he was not worthy, the priests would take control of the estate.

Ten years passed and when Nomasir returned, he thanked Arkad for the gold and wisdom his father gave him.  Unfortunately he lost the gold… first on a horse bet where he fell pray of fraudsters who fed him incorrect information.  The rest of the gold Nomasir lost after entering into a partnership with an unwise spender.

After Nomasir lost everything, he tried to find a job.  But he was without a trade or training.  During this most desperate time he remembered the clay tables his father gave him and he learned it by heart.  He realized that he would still have the gold if he read the tablets sooner.  Nomasir now know that the wisdom was more valuable than the gold itself.

Nomasir eventually found a job where he managed a group of slaves working on a new outer wall for the city Nineveh.  This time he was determined to save as much bronze as possible.  The slave master saw his ambition and told him of an opportunity.  When the wall was finished, the king would ask them to start working on the gates.  But there was not enough metal in the city.  They could pool all their gold, and sell it to the king when the time comes.  If the king declined, they would still have the metal and could sell it to someone else.  This time his gold multiplied and he gained respect from the other men.  The started to include him in other ventures as well.  The were wise men and knew how to work with gold.

Nomasir recovered from his early losses and ended up with much more gold than what he started with.

The five laws on the clay tablets were:

• Gold will increase if you save at least one tenth of your earnings.
• You must use opportunities to put the gold to work (let the gold earn more gold)
• Be cautious and invest under the advice of wise men who knows how to handle gold
• Do not invest in businesses you are not familiar with. Understand the risks involved
• Do not invest under the advice of tricksters who promise impossible earnings.

Gold is reserved for those who knows its laws and abide by them

Apart from the wisdom Arkad taught his son, there is also an additional lesson to learn from this… the fact that you must teach your kids.

Recent research showed that wealth usually disappear by the third generation.  Children with wealthy parents easily take money for granted and end up wasting it if they are not taught.

I recently attended a session where a panel of experts were supposed to give advice on how to teach your kids about money.  To me, it was a disaster.  The session started with a panel member telling us that we should rather teach our kids that money is not that important.  Next we were told that we should start an investment for them and put money away every month.  From my own experience… neither of these will teach your child financial literacy.  Before a person can start building wealth, you must understand opportunity cost.  You must give up (or at least postpone) something.  You can never teach someone the value of money by investing on their behalf, because they did not feel the sacrifice.

References

George S. Clason, The Richest Man in Babylon, First Published in 1926.  Free eBook distributed by BizBuildersUSA.org