What does Luke 18:26 mean?

A young man with enormous riches asks Jesus how he can inherit eternal life. As the crowd listens, Jesus shows that earthly goodness is not enough. Moral actions can never add up to balance out sin. Worse, the man's wealth is a significant spiritual barrier. When Jesus tells the man to give up his fortune, the man walks away, discouraged. Jesus tells the crowd it is difficult for the wealthy to enter God's kingdom (Luke 18:18–25; Mark 10:22). This is not a denouncement of money, but a warning that earthly things can distract us from heavenly truths.

The crowd is in a cultural conundrum. They live under the Mosaic law which lays out exactly what they should do to please God. The Mosaic law also says that if they obey, God will bless them (Leviticus 26:3–13). They have mistakenly transferred this general, national-level blessing to individuals. The assumption of their culture is that when someone is wealthy, it means that person has pleased God and He has blessed them.

In addition, this young man is truly "good" according to the standards of the world. He diligently follows all the commandments which outline how he should treat other people. It is when Jesus tells him to give away his wealth and follow Him that he realizes he can never be "good enough." He can't bring himself to do it. The problem is not the money, itself, but that he ultimately prioritizes it over following God. This creates the dilemma for those who watch the exchange: If a demonstrably good man cannot enter the kingdom of God, who can?

The whole point of the gospel is in Jesus' next words: "What is impossible with man is possible with God" (Luke 18:27). Only God is truly good (Luke 18:19). Only God can grant the mercy of forgiveness for our sins: all the ways we fail to meet His perfect standard of "good."