Recently, after spending a couple of weeks in Spain and lauding all of its positives, I had a friend ask me an interesting question. He asked if I thought differently about the USA after travelling and returning home. My response was that while I have had the good fortune to spend time in over 25 countries in my life, I think the USA is the greatest country in the world.
I don’t consider myself some jingo unchained nationalist but I would also be remiss if I did not understand how much I benefit from the economic and political legacy of the USA as a citizen. While currently there may be the greatest political divide in the USA that I have experienced in my lifetime, I remain inspired by the American ideals of freedom, equality, democracy, and a government for the people. The founding fathers were rebels and independents. This certainly jives well with my pursuit of a life outside the maze. I thought that I would celebrate this fourth of July by looking at financial independence with the words of those that wrote the declaration of independence and looking at happiness in life with some of the words of those who declared the pursuit of happiness an unalienable right.
The Founding Fathers on Frugality and Saving
The founding fathers were uniformly against debt and spending outside of one’s means. Somewhere between inventing bifocals and flying kites during electrical storms, Benjamin Franklin was quoted as writing,
“a penny saved is a penny earned.”
Benjamin Franklin
Most of the founding fathers understood the power of being conservative with money and avoiding debt both government and personal.
“Never spend your money before you have earned it.”
Thomas Jefferson
In our hyper-materialistic USA of today, it can be hard to determine which spend will actually have a meaningful impact on our lives for the better versus what is simply a passing fancy. George Washington advises that,
“We must consult our means rather than our wishes.”
George Washington
In other words, how bad do you really need it and is it within your means? I would argue that buying crap that we don’t need is not an American ideal and that frugality, self reliance, and independence are. In the past I’ve written about frugality as an enjoyable virtue as opposed to a sacrifice. To me frugality does not necessarily mean spending the least amount possible. Rather it means spending substantially below one’s means for greater independence and flexibility.
Long before he was rapping on broadway, Alexander Hamilton seemed to take a similar tone in writing that the
“…simple frugality of the Golden age was this and how different from the present luxury and profuseness that prevails…” “Luxury, in the opinion of all wise men has been the bane and ruin of States and Nations.”
Alexander Hamilton
Way to bust that freestyle Hamilton and I agree.
The Founding Fathers on Investing
The key ingredients to financial independence for most are simple. Make as much as you can, save aggressively, then invest conservatively with broad diversification and enjoy the magic of compound interest. This is largely my own story as well. But what do the guys who are literally on the money say about how to make money?
“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 Franklin
Anyone else notice that Franklin seems to be targeting a 20% return on his investments in this quote above. Haha, Not bad Franklin.
Many don’t know that George Washington was extraordinarily wealthy with a net worth of over a half billion of today’s dollars (that’s a lot of himselfs er Washingtons that is). He was also meticulous with his finances and understood that making sound investments with a smaller yield made for a happier life than taking big risky swings,
“worry is the interest paid by those who borrow trouble”
George Washington
It’s true that the stock market didn’t exist in the mid 1700s and many of the founding fathers were born into wealth and/or were large land owners. Investing at that time may have been a much more reputation based endeavor in a very murky market where deals were made in person wearing your powdered wig and frock coat. The good news is that investing and markets are much more open and transparent today and knowledge and contacts are only a few clicks away. Here’s one place to start.
The Founding Fathers on Financial Independence and Happiness
Hard work, self reliance, opportunity, and freedom were early American virtues. The founding fathers were called by a higher purpose to work than simply making money. As mentioned, most of them already had that. What they wanted was to build something better and create a government to inspire a new nation. This very act of community centered creation based on freedom may have been the pursuit of happiness that the founding fathers referred to. For me, financial independence is support that allows me to dedicate my working time to endeavors that I find meaningful rather than laboring out of necessity to support my family. I think in this regard the founding fathers would support working toward financial independence as quickly as possible. Thomas Jefferson said it well,
“Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.”
Thomas Jefferson
He also said that
“If you want something you’ve never had, you must be willing to do something you’ve never done.”
Thomas Jefferson
In other words, don’t be a tool. It’s hard to be virtuous if you don’t have your independence. Do whatever it takes to claim it and follow your own ambition.
What Would the Founding Fathers Really Think?
My hope is that this post has been entertaining and thought provoking. It should also be taken with a grain of salt or 20. I clearly acknowledge that It is tough to say what one person living in the 1700s would think about popular concerns 300 years later let alone what a group of people would collectively arrive at. If you google the phrase “what would the founding fathers think of____,” google auto-completes the statement with popular searches which are abortion, gun control, religion, etc. The founding fathers have almost god like status but each was only human. What would they think of social media, Tinder, or Amazon Prime? Who knows. Washington died rich and Jefferson died in debt. Should we trust the founding fathers on money? Many founding fathers held slaves while writing about equality. My point here is that people are complicated, they are influenced by their time, and often flawed. However, at the end of the day the founding fathers built an almost prophetic blueprint of a great nation.
Today, I am celebrating the founding fathers and our independence day. I am asking what independence means with respect to living a financially independent life outside the maze in the pursuit of happiness. I am also hopeful that some of the words of the founding fathers get you thinking about your own life and next steps. Where am I at versus where I would like to be? We talk a lot about money as a currency but less about time, the currency that only flows away from us. Hence there is no better time than now to build more freedom and independence into our lives.
“Dost thou love life? Then do not squander time, for that is the stuff life is made of.”
Benjamin Franklin
What do you think? Thoughts about founding fathers or American values as they relate to Financial Independence or happiness? Join the conversation in the comments below and happy birthday USA
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6 comments
Apparently, a lot of what Benjamin Franklin so famously said was a bit of a rip-off of other well-known sayings. But still history recorded him as a pithy, sagacious wit, so he must’ve done something right.
I think all of these quotes are food for thought indeed. I’d forgotten that Jefferson died in debt. Interesting…
Yeah, I have heard similar things about loads of quotes attributed to Shakespeare and Einstein for example that sound good but with no real evidence that they were actually said by the person. I guess if you get the ball rolling in life, the legend grows over time after you are gone
i’m happy to live here in the land of opportunity.
i was listening to an investing podcast and one dude distilled his approach like this: i live my life conservatively, with no debt, and that allows me to take more risk in my stock investing. the bigger the cushion the less you have to worry about one investment going down the tubes.
That’s an interesting perspective Freddy and I like the idea of living modestly to give more flexibility with acceptable risk. I suppose it all depends on what one defines as “risky.” If taking more risk simply means weathering market cycles while pretty well diversified or withstanding a few dogs in the portfolio then that makes sense to me. If it means an entire portfolio only in speculative energy stocks for example I’d worry about someone unnecessarily risking FI for possible returns that aren’t actually necessary to live modestly.
i’ll clarify risk for us in our household. it means buying more along the lines of growth stocks (that sometimes stop growing or go the other way) as opposed to “safe” long time dividend payer types like chlorox or proctor and gamble. we’re willing to bet on growth with the big cushion between our needs and income. we don’t play in the speculation sandbox.
Yeah I too am more concerned with overall return than dividend alone. Thanks for clarifying and adding the context Freddy