Cultivating Personal Integrity Through Financial Literacy

George Clason, in his book The Richest Man in Babylon, reveals the seven secrets of Arkad, the character who became the wealthiest man in Babylon. The first secret is to save 10% of one’s monthly income. This principle also serves as the foundation for a project assigned to students in grades 9–12 in their Accounting subject. Where do students get their income? Primarily from their parents’ allowance. On certain occasions, such as Eid al-Fitr or Christmas, students also receive angpao (monetary gifts in red envelopes), which can be considered additional income. Birthdays, Chinese New Year, and other celebrations also contribute to students’ income. This is where the testing and cultivation of students’ personal integrity begins.

The second secret from Arkad is to reduce expenses. We must differentiate between needs and wants. A need is eating nutritious food. However, choosing to eat at a “Sederhana” restaurant is a want. Neglecting needs can disrupt basic human survival, but the fulfilment of wants can be postponed. Interestingly, when expenses are limited to 90% of income (after setting aside 10% for savings), we naturally learn to adjust our spending. Even if we did not save the 10%, our expenses would still tend to reach 100%.

The third principle is to make money work for us. There are many investment instruments that can help grow one’s funds, such as savings accounts and deposits. Human nature appreciates growth, and there is joy in watching money multiply while still adhering to the first principle: saving 10% of income. The fourth principle emphasizes the importance of protecting one’s investment principal. Offers that promise excessively high returns are usually “too good to be true.” If you lose 50% of your principal, you need a 100% gain just to return to your original amount.

The fifth principle is to use property as both an investment and a hedge against inflation. Peter Lynch, a renowned investment legend and author of One Up On Wall Street, says that before investing in stocks, one should first own a home to live in. A home provides life security, a place for a family to grow, and a foundation for shared memories.

The next principle is to invest in instruments that prepare us for old age or retirement. We cannot work forever; the productive age of humans typically ends around 60. When retirement comes, we need assets that can be liquidated to fund our living expenses. The final principle is to create multiple sources of income. A table with four legs stands more firmly than one with only two. Similarly, individuals with several income streams have greater life stability than those who rely on a single source. Over time, by consistently applying Arkad’s wealth principles, we can build various income streams such as stock dividends, bond coupons, property rentals, or business profit-sharing.

A final message from the legendary investor Warren Buffett: when recruiting employees, consider three things: intellect, energy, and integrity. If you must choose only one, choose integrity.

South Tangerang, November 13, 2025

Author

Deky Suprianto