The world’s most popular money tip came from a map-maker whose business got crushed by the Great Depression

A part of all he earns is his to keep.
A part of all he earns is his to keep.
Image: Ken Teegardin via Flickr/CC-BY-2.0
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It’s the nugget of financial wisdom behind savings accounts, 401(k)s, IRAs, and everything in between: “pay yourself first.”

Nearly a century after it was first coined, this bellwether budgeting cliche is still around—and still solid advice. “Pay yourself first” simply means that before you spend any income, you should squirrel some of it away. Better yet: Automate the process, diverting funds into a separate account so they seem even less available. You can’t spend the cash that’s out of sight, the logic goes, or miss the money you never “had” in the first place.

“Pay yourself first” was first coined in the 1920s by George Samuel Clason, an American entrepreneur who founded a successful publishing business in Denver, Colorado. The Clason Map Company was the first to produce a road atlas of the United States and Canada, and it did so well that in 1926 Clason began to distribute pamphlets on financial success to banks, investment houses, and insurance companies. The pamphlets delivered financial wisdom through parables set in ancient Babylon, which had been the richest city in the world.

Clason’s first pamphlet introduced two friends who wondered why they had earned so much throughout their lives but had nothing to show for it. To uncover the secret to amassing wealth, they sought advice from their friend Arkad, known as the richest man in Babylon despite his incredible generosity and propensity for charity. Arkad would go on to dole out lessons with names like “Seven Cures for a Lean Purse” and “The Five Laws of Gold.”

In the first and most popular parable, Arkad explains that when he was a young scribe, he met a wealthy man named Algamish who needed Arkad to quickly produce a copy of a law in clay. In exchange, Algamish shared the secret to wealth, revealing that “a part of all he earns is his to keep.” As a result, Arkad began saving and investing a tenth of his income. This was what Clason called “paying yourself first.”

Subsequent pamphlets included other recognizable money lessons, like “make of thy dwelling a profitable investment”—i.e. own your home and build equity instead of throwing away money on rent. In “The Five Laws of Gold,” Clason underlined the importance of understanding your investments because “gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep.”

Clason’s business, like many, didn’t survive the Great Depression. But before it went under, he realized that his financial wisdom was more important than ever. In 1930, Clason compiled his parables into a book titled The Richest Man in Babylon and published it on his own. Today, the book has sold more than 2 million copies in 26 languages.

“The secret to personal financial success is believing and practicing this axiom: Part of all you earn is yours to keep,” Clason told the Denver Post in 1952. “Learn to live on less than you make and save the balance for yourself.”