Financial Advice from a Founding Father

In celebration of Independence Day, I’ve gathered some personal finance advice from Benjamin Franklin, one of our Founding Fathers. Franklin was witty, wise, and eminently practical. He was a master of thrift and frugality. Nearly three hundred years later, his advice is still worth heeding.

  • “A penny saved is a penny earned.”
  • “Buy what thou hast no need of and ere long thou shalt sell thy necessities.”
  • “Beware of little expenses. A small leak will sink a great ship.”
  • “Fools make feasts and wise men eat them.”
  • “In this world nothing is certain but death and taxes.”
  • “He that goes a-borrowing goes a-sorrowing.”
  • “By failing to prepare, you are preparing to fail.”
  • “Fond pride of dress is, sure, a very curse;
    Ere fancy you consult, consult your purse.”
  • “‘Tis easier to surpress the first desire than to satisfy all that follow it.”
  • “The second vice is lying, the first is debt.”
  • “Lying rides upon debt’s back.”
  • “Creditors have better memories than debtors.”
  • “The borrower is slave to the lender and the debtor to the creditor.”
  • “Rather go to bed supperless than rise in debt.”
  • “Women and wine, game and deceit,
    Make the wealth small and the wants great.”
  • “Many estates are spent int he getting,
    Since women for tea forsook spinning and knitting,
    And men for punch forsook hewing and splitting.”
  • “A fat kitchen makes a lean will.”
  • “Learning is to the studious and riches to the careful.”
  • “Have you somewhat to do tomorrow? Do it today.”
  • “Diligence is the mother of good luck.”
  • “Industry pays debts, while despair increases them.”
  • “There are no pains without gains.”
  • “Industry need not wish.”
  • “Having been poor is no shame, but being ashamed of it, is.”
  • “Early to bed and early to rise, makes a man healthy, wealthy and wise.”
  • “Sloth makes all things difficult, but industry all things easy.”
  • “But doest thou love life? Then do not squander time, for that’s the stuff life is made of.”
  • “He that can have patience can have what he will.”
  • “He that is of the opinion money will do everything may well be suspected of doing everything for money.”
  • “For having lived long, I have experienced many instances of being obliged, by better information or fuller consideration, to change opinions, even on important subjects, which I once thought right but found to be otherwise.”
  • “Any society that would give up a little liberty to gain a little security will deserve neither and lose both.”

If you’re interested in more of what Franklin has to say about thrift, please read his thoughts on “The Way to Wealth”, which are too extensive to reprint here.

Necessary Hints to Those That Would Be Rich

(by Benjamin Franklin, from Poor Richard’s Almanack (1737))

The use of money is all the advantage there is in having money. For six pounds a year you may have the use of one hundred pounds, provided you are a man of known prudence and honesty.

He that spends a groat a day idly spends idly above six pounds a year, which is the price for the use of one hundred pounds.

He that wastes idly a groat’s worth of his time per day, one day with another, wastes the privilege of using one hundred pounds each day.

He that idly loses five shillings’ worth of time loses five shillings, and might as prudently throw five shillings into the sea.

He that loses five shillings not only loses that sum, but all the advantage that might be made by turning it in dealing, which by the time that a young man becomes old will amount to a considerable sum of money.

Again: he that sells upon credit asks a price for what he sells equivalent to the principal and interest of his money for the time he is to be kept out of it; therefore, he that buys upon credit pays interest for what he buys, and he that pays ready money might let that money out to use; so that he that possesses anything he has bought pays interest for the use of it.

Yet in buying goods it is best to pay ready money, because he that sells upon credit expects to lose five per cent, by bad debts; therefore he charges on all he sells upon credit an advance that shall make up that deficiency.

Those who pay for what they buy upon credit pay their share of this advance. He that pays ready money escapes, or may escape, that charge.

“A penny saved is two pence dear;
A pin a day’s a groat a year.”

Ben Franklin’s Advice to a Young Tradesman

TO MY FRIEND, A. B.: — As you have desired of me, I write the following hints, which have been of service to me, and may, if observed, be so to you.

Remember that time is money. He that can earn ten shillings a day by his labour and goes abroad or sits idle one-half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides.

Remember that credit is money. If a man lets his money lie in my hands after it is due, he gives me the interest, or so much as I can make of it during that time. This amounts to a considerable sum where a man has good and large credit and makes good use of it.

Remember that money is of the prolific, generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turned is six; turned again it is seven and threepence, and so on till it becomes a hundred pounds. The more there is of it the more it produces every turning, so that the profits rise quicker and quicker. He that kills a breeding sow destroys all her offspring to the thousandth generation. He that murders a crown destroys all that might have produced even scores of pounds.

Remember that six pounds a year is but a groat a day. For this little sum (which may be daily wasted either in time or expense unperceived) a man off credit may, on his own security, have the constant possession and use of a hundred pounds. So much in stock briskly turned by an industrious man produces great advantage.

Remember this saying, “The good paymaster is lord of another man’s purse.” He that is known to pay punctually and exactly to the time he promises may at any time and on any occasion raise all the money his friends can spare. This is sometimes of great use. After industry and frugality, nothing contributes more to the raising of a young man in the world than punctuality and justice in all his dealings; therefore never keep borrowed money an hour beyond the time you promised, lest a disappointment shut up your friend’s purse for ever.

The most trifling actions that affect a man’s credit are to be regarded. The sound of your hammer at five in the morning or nine at night heard by a creditor makes him easy six months longer, but if he sees you at a billard-table or hears your voice at a tavern, when you should be at work, he sends for his money the next day; demands it, before he can receive it, in a lump.

It shows, besides, that you are mindful of what you owe; it makes you appear a careful as well as an honest man, and that still increases your credit.

Beware of thinking all your own that you possess and of living accordingly. It is a mistake that many people who have credit fall into. To prevent this, keep an exact account for some time, both of your expenses and your income. If you take the pains at first to mention particulars, it will have this good effect: you will discover how wonderfully small, trifling expenses mount up to large sums, and will discern what might have been and may for the future be saved without occasioning any great inconvenience.

In short, the way to wealth, if you desire it, is as plain as the way to market. It depends chiefly on two words, industry and frugality; that is, waste neither time nor money, but make the best use of both. Without industry and frugality nothing will do, and with them everything. He that gets all he can honestly and saves all he gets (necessary expenses excepted), will certainly become rich, if that Being who governs the world, to whom all should look for a blessing on their honest endeavours, doth not, in his wise providence, otherwise determine.

(Benjamin Franklin)

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