Inquiry · “You Are Not Your Thoughts”
The Five Laws of Gold
To weigh any money or investment decision against five principles for sound, durable wealth-building before acting.
Run every money decision through five questions: (1) Am I saving a tenth?
(2) Is this money productively employed?
(3) Is it advised by someone genuinely competent?
(4) Do I actually understand it?
(5) Does it promise impossible returns or smell of a scam? Fail 4 or 5 and walk away.
What it is
This is George S. Clason’s companion to the Seven Cures, given in The Richest Man in Babylon (1926) through the story of Arkad’s son Nomasir and the clay tablets.
Where the Cures build wealth, the Five Laws of Gold govern how to keep and grow it — and they work best as a decision filter: before you put money anywhere, you run the choice through the five and let any that fail stop you.
This is the practice’s “inquiry” character — an honest self-examination of a financial decision (am I chasing impossible returns? do I actually understand this? whose advice is this?) that surfaces the wishful thinking and greed that lose people their savings. Clason’s five laws, paraphrased:
(1) gold comes to those who save at least one-tenth; (2) gold works diligently for those who give it profitable employment; (3) gold clings to the owner who invests under wise counsel; (4) gold slips away from those who invest in what they do not understand; (5) gold flees from those who chase impossible returns or follow the schemes of tricksters.
The Method
Before any saving or investment decision, examine it against the five:
- Law 1 — Save a tenth. Am I consistently keeping at least one-tenth of income? Gold accumulates for the steady saver; without the seed, the rest is moot.
- Law 2 — Put it to work. Is this money productively employed, or idle? Savings should earn — invested wisely, gold “multiplies and grows.”
- Law 3 — Seek wise counsel. Is this advised by someone genuinely competent and trustworthy in this matter? Gold clings to the cautious owner who invests under sound guidance.
- Law 4 — Stay within what you understand. Do I actually understand this investment, or am I trusting hope? Gold slips away from those who put it into businesses or schemes they don’t grasp. (A direct ancestor of “invest within your circle of competence.”)
- Law 5 — Refuse get-rich-quick. Is this promising impossible returns, or leaning on a “trickster’s” pitch? Gold flees from those who force it to unnatural earnings or follow alluring swindlers. If a deal smells too good, that is the answer. If a decision fails any law — especially 4 and 5 — don’t do it. (Sourcing note: the five laws are Clason’s published framework, paraphrased and attributed; archaic wording is summarized, not reproduced.)
Source & Lineage
The Five Laws are Clason’s, told in 1926 through Nomasir’s journey and the clay-tablet parable. They restate durable investing wisdom — save, employ capital productively, take competent advice, stay in your competence, avoid scams — in ancient form.
They anticipate modern principles like “circle of competence” (Buffett/Munger) and standard anti-fraud guidance, and run into the FIRE and value-investing cultures.
Common refinements
Skipping Law 4 in a hot market. Most ruinous losses come from money put into things the owner never understood. If you can’t explain it simply, you don’t understand it.
- Mistaking a salesman for “wise counsel.” Law 3 means a competent, ideally fiduciary adviser with no stake in your decision — not whoever is selling.
- Hearing Law 5 as “never take risk.” It targets impossible returns and tricksters, not ordinary, understood investment risk.
- Refinement: Write the five as a checklist and literally run each real decision past it before committing money.