In honor of Independence Day, let’s hear what the founders of the United States of America had to say about personal finance.
George Washington – on tracking expenses
George Washington was a man of few words, but his actions, and old Library records, speak for themselves. Washington was great at tracking his money. When he was appointed commander-in-chief of the Continental Army in 1775, he did not accept a salary. Instead, he agreed to reimbursement of his expenses after the war. Congress agreed to his request and George recorded the expenses. From brooms to mutton to payment to his soldiers, Washington was a meticulous record keeper. Although some of his founding fellows died in debt, Washington went down in history as one of the wealthiest men of his time.
Alexander Hamilton – on building your career early in life
In the opening song of the Broadway musical Hamilton, John Laurens, a famous Revolutionary War soldier, exclaims of Alexander Hamilton, “The ten-dollar founding father without a father got a lot farther by working a lot harder, by being a lot smarter, by being a self-starter. By fourteen, they placed him in charge of a trading charter.”
There is truth to Laurens’ words. Hamilton was born to a single mother in the West Indies and was orphaned as a child. At the age of 14, he began working as a clerk at a local import-export firm. When the owner was at sea, he was placed in charge of the firm for five months. His work ethic and early managerial experience put him on a career path to success.
Thomas Jefferson – on living within your means
“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.” –Thomas Jefferson from a letter to Martha Jefferson Randolph in 1808
Jefferson knew all too well about debt. He not only inherited debt from his father-in-law; he also lived way beyond his means. When he died, it’s estimated he still owed about $107,000–estimated to be $2.64 million in today’s dollars.
Benjamin Franklin – on the magic of compounding
“Remember that 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.” –Benjamin Frankin from “Advice to a Young Tradesman, Written by an Old One” (1748)
Benjamin Franklin is also known for coining the phrase, “A penny saved is a penny earned.”
John Hancock – on having and not having money
“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.” – John Hancock from letter to his uncle, 1761
John Hancock might be remembered for his iconic signature today, but he also knew a lot about money. He inherited a hugely successful mercantile business from his uncle, making him one of the wealthiest men in the American Colonies. In 2007, Forbes magazine estimated his net worth today was around $19.3 billion. Yet, he still understood how quickly a fortune could disappear without wise budgeting and planning.
John Adams – on the importance of a financial education
“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.” – John Adams from a letter to Thomas Jefferson in 1787
Many of the ideas of our founding fathers live on today. Taking their advice can inspire us to be financially independent.