Updated on 07.02.10

Nine Thoughts on Personal Finance from America’s Founding Fathers

Trent Hamm

Let’s celebrate the signing of the Declaration of Independence by celebrating some of America’s founding father’s thoughts on personal finance.

An investment in knowledge always pays the best interest.
– Benjamin Franklin

One thing that I feel is never wasted is money and time spent on purposeful education. If you’re genuinely engaged in learning about a topic and growing as a person, the time and money spent learning and growing is among the most valuable you can spend. It increases your body of knowledge, allows you to understand and solve problems of a new variety, and gives you new skills to share with the world (and with potential employers).

There are two educations. One should teach us how to make a living and the other how to live.
– John Adams

At the same time, if you do nothing but learning and do not share it, you’re missing out on the flip side of life. Learning is a lifelong journey, but it’s one taken hand in hand with making our way in the world with the tools we have right now.

We must make our election between economy and liberty or profusion and servitude.
– Thomas Jefferson

In other words, we have a choice between financial independence and financial dependence. If we spend less, we are in control of our own money. We don’t owe others. We have the freedom to change our employment if we so wish. If we spend outside of our means, we are no longer in control of our money. We owe others and we don’t have the freedom to change our employment other than to chase the dollar regardless of how oppressive or soul-sucking the work is. What do you choose?

We cannot make events. Our business is wisely to improve them.
– Samuel Adams

Life happens. Good events happen. Bad events happen. We can’t foresee most of them. The people who achieve their dreams are the ones that hop on board with the good events (and have the resources to do so) and are also able to roll through the bad events. How do you do that? You do that by not spending everything you earn and keeping some of those earnings for yourself, to deal with the bad and take advantage of the good.

That which we obtain too easily, we esteem too lightly.
– Thomas Paine

Often, the most valuable things in our lives are the things that seem like they’re constantly there. Our homes. Our families. Our closest friends. That’s where the real value is. What’s genuinely more important to you: your best friend or whatever material item you dream about owning?

Associate yourself with men of good quality if you esteem your own reputation. It is better be alone than in bad company.
– George Washington

You are impacted over and over again by the people you associate with. Their opinions and attitudes and reputations rub off on you. If you want to fail, surround yourself with negative people with a history of failure. If you want to succeed, surround yourself with people committed to succeeding.

Commercial shackles are generally unjust, oppressive, and impolitic.
– James Madison

Debt is a very painful game to play. The word “shackles” is actually pretty descrpitive, as is the word “oppressive.” You’re stuck when you’re in debt. You can’t make the choices you might want to make in your life – switching jobs, being a stay at home parent, starting your own business. Debt eats those opportunities – and for what?

In the general course of human nature, A power over a man’s subsistence amounts to a power over his will.
– Alexander Hamilton

If you allow yourself to be in a position where you don’t have any money in reserve for yourself, you’re completely at the mercy of the people who pay you. You will jump when they say jump. You’ll work neverending hours and subject yourself to countless unenjoyable events. Why? You’ve given your employers all of the power.

The greatest ability in business is to get along with others and to influence their actions.
– John Hancock

The ability to communicate with others, state your positions, and convince others to go along with you is one that will serve you well for success no matter what path in life you choose.

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  1. NMPatricia says:

    Great post. “That which we obtain too easily, we esteem too lightly.” This also applies to saving money to buy well rather than cheap. I think there is a great more satisfaction in buying quality for which I have saved rather than buying easily and cheaply. Or the hunt through Craig’s List or Freecycle to get something at a reduced price saving me money. I value those items so much more.

    I know that you commented on this quote in terms of intangible things, and of course you are right. But I thought of the above.

  2. Kathryn says:

    Commercial shackles are generally unjust, oppressive, and impolitic.
    – James Madison

    I would say that this is referring to much more than personal debt. We’ve allowed our country to be run by commercial interests & reduced our freedoms as a result. I don’t disagree with your statement about debt, but i think this quote goes far beyond that.

    Our politicians are largely bought & sold by big corporate interest & the concerns of the elected leaders are, at best, divided between trying to please constituents & corporate interests.

    I love this country, but we are losing many of our freedoms rapidly.

  3. I bet their rolling over in their graves with the amount of debt our country has now.

  4. M E 2 says:

    I agree more along the lines of poster #1.

    I don’t think Thomas Paine’s quote had anything to do with family and/or friends.

    It was all about the material things in life.

    The harder you save/work to own something the more you will cherish it, take care of it, etc.

    Let’s face it, GENERALLY, if one gets something for nothing, we tend to take said item(s) for granted because it/they was/were free. IF we had paid for it/them ourself, we’d take better care.

    That’s what Thomas Paine was saying.

  5. Carl says:

    I wish there was a group who would lobby for the people. You know, buy them cars and “pay them off” to support the people not the corporations. If every american sent in 5 bucks, we could compete with big business. You know, buy us some poloticians like the BP’s of the world.

  6. Guy says:

    This is an excellent post – I’ve adopted a personal mantra that debt is the same as slavery. I wish that others in my family would feel the same way.

  7. George says:

    How sad that there are only two comments before mine on a wonderful wise post, yet 32 comments on a post about a broccoli meal which is ephemeral.

  8. Julia says:

    George, this one is just getting started.
    Anyway,thanks for posting this Trent.
    Aonther fantastic post. Keep up the good work.

  9. Alan says:

    Great post for the fourth of July weekend! As a history buff, I always love to hear from our founding fathers. They truly were an amazing, brave and wise group.

    I did have to chuckle at the irony of Thomas Jefferson’s quote and Trent’s explanation of it. Thomas Jefferson was one of the brightest of the founding fathers, but also one of the most conflicted (i.e. espousing principles of freedom for all while holding slaves). His quote in this post is another example–poor Mr. Jefferson is renowned for being “in debt to his eyeballs.”

    It does not negate the wisdom of his saying–perhaps it has more force coming from personal experience.

  10. Todd says:

    @George–I hope it’s because many of us were busy with activities on the 4th and haven’t read it yet. I agree that this was an excellent post.

  11. Kevin says:

    An interesting idea for a post, certainly.

    I fear, however, that you’re spinning these quotes in a simplistic manner to suit your own purposes and ideas, ignoring – or failing to appreciate – their original context and meaning.

    The James Madison quote has nothing whatsoever to do with debt; Madison was arguing that the U.S. impose a tariff on imports, despite the fact that he in general was philosophically opposed to such actions (“commercial shackles”).

    The Paine quote is misinterpreted as well, which is baffling, since it suits your ethos. Paine was suggesting that we more fully appreciate those things which are attained as the result of hard work and struggle. The full quote: “The harder the conflict, the more glorious the triumph. What we obtain too cheaply, we esteem too lightly; ’tis dearness only that gives everything its value.” This is a far cry from “things that seem like they’re constantly there.”

  12. LMR says:

    I like the John Adams quote, “There are two educations. One should teach us how to make a living and the other how to live.” I think the two actually support each other very well. A college education can help you learn about other cultures and ways of thinking and improve your critical thinking skills, which can also help you in your personal life as well as on your job. Learning how to live better can also help you make a better living. For example, having good social skills can help you get a promotion. So I think they go hand-in-hand.

  13. George says:

    35 comments on broccoli meal and we’ve made 8 comments total here, 3 of which involve me mentioning how few comments this topic received.

  14. Jeremy says:

    Wow, good stuff. I’m going to have to come back to this post a few times to really absorb the depth of these quotes. This is timely for me as I have recently gotten a renewed interest in learning more about the lives and biographies of our founding fathers

    Their take on LIFE has really interested me, especially how their definition of “life, liberty and the persuit of happiness” is so different than what we view it today (by trying to buy our way to happiness, therefore becoming trapped by materialism instead of being liberated to enjoy life)

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