Maybe there’s a good reason the Founding Fathers still have their faces on our money. It seems they put a lot of thought into both freedom and finances. Through their letters, books, and other writing, they revealed a variety of perspectives on money, how to manage it, and what it is really good for. And history also knows that, when it came to personal wealth management, some of them fared much better than others. Here’s a quick look at just three of the Founding Fathers and the inheritance they left us in wisdom.
Pinching Pennies (or at least keeping them)
Benjamin Franklin knew how to coin a phrase (pun intended). His most famous line was probably “A penny saved is a penny earned.” Thomas Jefferson was in the same camp. Kudos to him for sharing his financial advice not just with his children, but also with his grandchildren. In a letter to one of his daughters, Thomas Jefferson once stressed the importance of living within one’s means. And one letter to his granddaughter left us this gem: “Never spend your money before you have earned it.” He should have made a copy of that letter for himself, though, to help him practice what he preached. He died in debt, to the tune of over $2 million in today’s dollars. He probably should have also listened to John Hancock’s financial advice a bit more. (You’ll learn why in a minute.) By the way, he was spared seeing the invention of credit cards—and their obvious temptations—by passing 122 years before they were invented.
The Power of Compounding
We’ll turn to Benjamin Franklin again to reinforce one of our mantras that wealth benefits greatly when patience allows compounding to do its work. “Remember that Money is of a prolific generating Nature,” he wrote. “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."
Family Wealth (and lots of it)
It’s fair to say that George Washington considered wealth to be a family affair, considering money management to be essential to parenting: “A natural parent has only two things principally to consider, the improvement of his son, and the finances to do with it.” By the way, Washington also kept a detailed ledger to track everything he purchased or money he owed. Even if he bought tea, or butter, or sugar, for example, he entered it into his ledger for posterity. And, to his credit, Washington refused to accept a salary as commander-in-chief. Even without that pay, his peak net worth in today’s dollars would be $594 million.
If our school history books focused a bit more on finance, they might include one more factoid about John Hancock in addition to his intentionally large signature. In 2022 dollars, Hancock’s net worth was also oversized: over $9 million.
Last, but not least, here’s a message from Benjamin Franklin for those who have succeeded in building great wealth, are smart enough to have it managed wisely, but who still see their wealth as, well, just a lot of money. Of course, Franklin phrased it differently in his popular book, Poor Richard’s Almanack: “Wealth is not his that has it, but his that enjoys it.”
The Takeaway
We believe that family wealth is more than just money. In one respect, it’s freedom. It can be the freedom to live just about anywhere, visit just about anywhere, and eat and drink just about anything—hopefully with family and friends. Of course, these aren’t necessarily the freedoms these Founding Fathers had in mind while signing the Declaration of Independence. But they are some of the freedoms the wealthy might think about as they’re planning their financial future.
Disclosure: This communication is for informational purposes only and should not necessarily be regarded as legal, tax, or customized financial advice or comment or as an official statement of the firm, or any agents thereof. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections, without notice J.L. Bainbridge & Co., Inc. is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at jlbainbridge.com and https://adviserinfo.sec.gov/firm/summary/108058.
