Benjamin Franklin coined the expression “A penny saved is a penny earned”. It’s a good start.
To help you prosper even more, in honor of Independence Day, Consider what other founders in the United States of America had to say about personal finance. As you will see, many of their ideas endure today in Kiplinger’s advice to our readers. We hope that their original calls to action inspire you to find your way to your own financial independence.
Reporting by Sarah Smith, Meilan Solly, Brendan Pedersen and Mckenzie Richmond
“All the perplexity, confusion and distress in America does not arise from flaws in the Constitution, nor from lack of honor or virtue, as much as from total ignorance of the nature of money, credit and circulation. ” – Extract from a letter to Thomas Jefferson in 1787
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“Never spend your money until you’ve earned it.” – Extract from a letter written by Jefferson to his granddaughter describing 12 “Canons of Conduct in Life”, 1811
Jefferson’s words of wisdom, which he shared in letters to his children and grandchildren, still apply more than two centuries later. Not living within your means leads to debt and financial insecurity, as Jefferson himself has proven. (More information on Jefferson in a few slides..)
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“Remember money is of a prolific generative nature. Money can beget money and its offspring can beget more, and so on. Five shillings turned is six: Turned again , it’s seven and three pence; and so on until it becomes a hundred pounds. The more there is, the more it produces each spin, so that the profits increase faster and faster. “- Extract from “Advice to a young trader, written by an old man” (1748)
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“It is a singular advantage of taxes on articles of consumption that by their nature they contain a guarantee against excesses. They prescribe their own limit, which cannot be exceeded without going against the intended goal, ie an extension of income. – Extract from the Federalist Papers, “Federalist No. 21”
Hamilton knew consumers would pay extra for their indulgences. Imagine if he was alive today to see modern day “sin” taxes covering everything from electronic cigarettes to champagne.
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“Learning does not come about by chance, it must be ardently sought and diligently nurtured.” – Letter to John Quincy Adams, 1780
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George Washington was a man of few words, but his actions – and the old Library of Congress files – speak for themselves. Washington was picky about tracking its money. When he was appointed Commander-in-Chief of the Continental Army in 1775, he did not accept a salary. Instead, he accepted reimbursement for his expenses after the war.
Congress readily accepted his request, and naturally began to register just about everything. From brooms and sheep to paying his soldiers, Washington was a meticulous archivist. Although some of its founders died in debt, Washington made history as one of the richest men of its time.
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“In this world, nothing is certain except death and taxes.” – Extract from a letter of 1789 to the French scientist Jean-Baptiste Leroy
Ouch, two inevitable horrors – death and taxes. What could be worse? Taxes on death, otherwise known as inheritance taxes, which can be levied by both the federal government and your state, depending on the size of your estate.
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In the opening song of the Broadway musical HamiltonJohn Laurens, a famous War of Independence soldier, exclaims about Alexander Hamilton: “The ten dollar founding father without a father went a lot further by working a lot harder, by being a lot smarter, by being autonomous. At fourteen, they placed him at the head of a commercial charter.
There is a lyrical truth in Laurens’ words. Hamilton was born to his single mother in the West Indies and was orphaned as a child. At the age of 14, he started working as a clerk in a local import- company, Beekman and Cruger. When the owner was at sea, he was appointed head of the company for five months before moving to New Jersey.
His work ethic and early management experiences set him on the path to greatness.
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“I read, I study, I examine, I listen, I think, and from all of this I try to form an idea in which I put as much common sense as possible.” – Extract from a letter to his father, 1776
The French aristocrat and military officer is probably not the first person that comes to mind as a “founding father,” but Lafayette played a central role in achieving American independence. A trusted Washington confidant, he provided an essential channel of French support to the settlers. Lafayette was hailed as a “hero of two worlds” when he returned home from across the Atlantic. Throughout his life he showed interest in carefully studying any situation and determining all possible outcomes to arrive at the best possible decision, whether it be a military strategy in 1777 or an investment in 2018.
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“I find the money somehow goes really fast. But I think I can think it was spent with satisfaction and for my own honor. – From the letter to his uncle, 1761
John Hancock may be remembered for his iconic signing today, but he also knew a thing or two about money. He inherited an extremely successful business enterprise from his uncle, making him one of the wealthiest men in the American colonies. In 2007, Forbes magazine estimated his net worth (in today’s dollars) to be around $ 19.3. billion. Yet he still understood how quickly a fortune could disappear without careful budgeting and planning.
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“But I know nothing more important to instill in the minds of young people than the wisdom, honor and blissful comforts of living according to their income, of calculating in time how much less pain will cost them the simplest way of life. which prevents them from going into debt, only after a few years of splendor above their income, from having their property confiscated for debt while they have a growing family to support and provide for their needs. ”- Extract from a letter to his daughter Martha Jefferson Randolph in 1808
Jefferson knew what he was talking about. He didn’t just inherit his stepfather’s debts; he was also living well beyond his means. At his death, it is estimated that he still owed about $ 107,000, or about $ 2.6 million in today’s dollars.
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“Wealth is not his who owns it, but his who benefits from it.” – From Franklin’s book, Poor Richard’s Almanack, 1736
What’s the point of working hard if you don’t appreciate what you’ve earned? Franklin published Poor Richard’s Almanack under a pseudonym as a book of instruction and advice for commoners. The book included life tips, as well as recipes, a calendar, and other tools.
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