Founding Fathers & Finance
With July 4th right around the corner, it is only appropriate to celebrate the individuals that made our independence possible and with that, their wisdom when it came to money. Sometimes we take for granted the monetary system, laws, and foundation upon which our country, and our wealth, was built. Let's look at the knowledge they imparted and how it still holds true today:
1. become financially literate
John Adams stated "All the perplexities, confusion and distress in America arise not from the defects of the Constitution, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation." – From a letter to Thomas Jefferson in 1787.
Wow, this is still incredibly true today! Adams knew that without proper financial education of the individual that they would blame the government. It is not the government's job to teach you money! It is up to you, and only you to understand your money. If you master it, the world is your oyster. If you do not take the time to learn about money, you will continuously be a slave to it. Our monetary system is the best in the world. Take advantage of your library and online resources to educate yourself about your funds and ultimately live financially free.
2. Live within your means
Thomas Jefferson stated "But I know nothing more important to inculcate into the minds of young people than the wisdom, the honor, and the blessed comfort of living within their income, to calculate in good time how much less pain will cost them the plainest stile of living which keeps them out of debt, than after a few years of splendor above their income, to have their property taken away for debt when they have a family growing up to maintain and provide for." – From a letter to Martha Jefferson Randolph in 180.
Take Jefferson's advice; he was left penniless and broke at the end of his life. Jefferson was a known "overspender" who, due to his overspending, did not have any money to speak of when he passed away. He learned the hard way that true joy in life does not come from overspending but living comfortably within your means.
3. understand compounding
Benjamin Franklin stated “Money is of a prolific generating Nature. Money can beget Money, and its Offspring can beget more, and so on. Five Shillings turn’d, is Six: Turn’d again, ’tis Seven and Three Pence; and so on ’til it becomes an Hundred Pound. The more there is of it, the more it produces every Turning, so that the Profits rise quicker and quicker.”
Franklin was by far the wisest when it came to money. He knew that investing your money sows more money in your life. The above quote was his best attempt at explaining compounding. When you invest your money, it makes more money, essentially creating a force so strong that you can't help but run into wealth on its journey.
4. Stay Frugal
John Hancock stated “I find money some way or other goes very fast. But I think I can reflect it has been spent with satisfaction and to my own honour.” – From letter to his uncle, 1761
John Hancock knew that with great wealth comes great responsibility. He was a wealthy man but knew that could quickly go away without attention and careful planning. He stayed on top of his money, and that wisdom allowed an institution after his namesake to still be running today.
And lastly, an old faithful from Benjamin Franklin, "In this world nothing can be said to be certain, except death and taxes." – From a 1789 letter to French scientist Jean-Baptiste Leroy. On that note, Happy (almost) 4th of July! 😂🇺🇸