Was Benjamin Franklin The Original Financial Guru?

September 28, 2024 DINARRECAPS8

Here are 4 bits of money advice from the Founding Father

Lou Carlozo Sun, September 22, 2024 Moneywise

Staring out from the $100 bill, looking more like a wise old uncle than Founding Father, Benjamin Franklin seems an easy guy to like. And if anyone belongs on U.S. currency it's this colonial polymath who dished financial wisdom as fit for today as when he signed the Declaration of Independence at age 70.

Let’s start, though, by getting this myth out of the way: Franklin never exactly said, “A penny saved is a penny earned.” The line he wrote in his 1737 edition of “Poor Richard's Almanack” was this: “A penny saved is two pence clear.”

Regardless, a penny saved in 1737 would be worth 79 cents today, per the Official Data Foundation. And by offering sound advice like the above, it’s no stretch to call Franklin one of America’s original financial gurus.

Among the many things he said about personal finance, these four are drawn from “The Way to Wealth,” a collection of adages and advice published in 1758 that were imparted in previous “Almanack” writings.

No pain, no gain

“There are no gains without pains,” he wrote.

And you thought some buff weightlifter made this up. Franklin was vocal about the dangers of sloth (including excess sleep) and urged people to pursue wealth through industriousness. He cites a gripe as common then as now among people who struggle with money: high taxes. But wishing for outside factors to change, he argued, is never as effective as taking charge through diligence.

“He that lives upon hope will die fasting,” Franklin wrote, while the industrious “shall never starve … at the working man's house hunger looks in, but dares not enter.”

Consider Franklin’s counsel as an invitation to find and maintain income streams beyond your day job. Maybe start a side hustle out of your home and grow it from there.

Be frugal

“We must add frugality, if we would make our industry more certainly successful,” Franklin wrote. "You may think , perhaps, that a little tea or a little punch now and then, diet a little more costly, clothes a little finer, and a little entertainment now and then, can be no great matter, but remember, many a little makes a mickle. Beware of little expenses. A small leak will sink a great ship."

The most recent figures from the U.S. Bureau of Labor Statistics show that, in 2022, Americans spent 10.9% more on apparel and services, including 18.8% more on footwear, than the previous year.

While that’s not the same as splurging on a sea cruise, ask yourself whether slowly filling your closet points to a spending problem — that proverbial capsizing ship. Or, as Franklin lamented, “When you have bought one fine thing, you must buy 10 more.”