Benjamin Franklin is not only an American patriot, but his writings are also influential in the personal finance space. His annual journal called the Poor Richard’s Almanack contains gems on how to manage money and how to build your wealth. He summarized it in his essay in 1758 called The Way to Wealth. Here, I will highlight some of the items in his essay that resonated with me and helped me in my financial journey.

“Friends,” said he, “the taxes are indeed very heavy, and, if those laid on by the government were the only ones we had to pay, we might more easily discharge them; but we have many others, and much more grievous to some of us.

We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly; and from these taxes the commissioners cannot ease or deliver us, by allowing an abatement.

Here he describes two types of taxes: one that comes from external forces (e.g. the government or a ruling entity), and the other comes from within. The essay explains that the taxes that come from within are much more expensive than the ones we only know come tax season.

What are these taxes? Products of our idleness, pride, and folly. These are brought about by missed opportunities, by bad investments, and destructive financial decisions.

Diligence is the mother of good luck, and God gives all things to industry. Then plough deep while sluggards sleep, and you shall have corn to sell and to keep.

Work while it is called to-day, for you know not how much you may be hindered to-morrow. 

One, to-day is worth two to-morrows, as Poor Richard says; and further, Never leave that till to-morrow, which you can do to-day.

If you were a servant, would you not be, ashamed that a good master should catch you idle? Are you then your own master? Be ashamed to catch yourself idle, when there is so much to be done for yourself, your family, your country, and your king. 

This is the concept of doing what you don’t want to do. Essentially the more you feel like you want to procrastinate on something, the more you will need to fight back that behavior and do the action instead.

People often say they want to be their own boss, the captain of their own souls, or masters of their fate. But if you were the master, would you be proud or ashamed of yourself when you look back at the work you have done today?

Away then with your expensive follies, and you will not then have so much cause to complain of bard times, heavy taxes, and chargeable families; for

Women and wine, game and deceit,
Make the wealth small and the want great

In the article on steps to building wealth, one of the steps is to increase surplus, which can be done by reducing expenses. Focusing first on our most expensive “follies” would have significant impact on our financial situation. Examples of these are vices (women and wine), gambling (game), and unproductive entertainment (deceit). Not only do these things reduce our wealth, but they are often addictive and makes people want more and more of them.

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, as Poor Richard says and again, . . . .

Closely related to the preceding point, not only do we need to watch out for frivolous expenses, but also on those small enough that we often do not think about them. I think it makes them more dangerous in the long run as we do not notice them as much in our daily or monthly statements. However, these small things do add up to large amounts, and if not reigned in, will sink a great ship.

But what madness must it be to run in debt for these superfluities? We are offered by the terms of this sale, six months’ credit; and that, perhaps, has induced some of us to attend it, because we cannot spare the ready money, and hope now to be fine without it.

But, ah! think what you do when, I you run I in debt you give to another power over your liberty. If you cannot pay at the time, you will be ashamed to see your creditor; you will be in fear when you speak to him; you will make poor, pitiful, sneaking excuses, and, by degrees, come to lose your veracity, and sink into base, downright lying; for The second vice is lying, the first is running in debt, as Poor Richard says; . . . .

What is worse than frivolous expenses? When it is acquired using debt! A classic example of this is buying our wants using our credit card (often under their installment program). Not only are you required to pay back the loan (or face legal consequences) but you also need to pay interest.

This doctrine, my friends, is reason and wisdom; but, after all, do not depend too much upon your own industry, and frugality, and prudence, though excellent things; for they may all be blasted, without the blessing of Heaven;

and, therefore, ask that blessing humbly, and be not uncharitable to those that at present seem to want it, but comfort and help them

Remember, Job suffered, and was afterwards prosperous.

Perhaps the most important concept of all is not to depend too much on material wealth and our ability to earn. From a Christian standpoint, we believe that all good things come from God, and all of our provisions are gifts from above.

From a Stoic perspective, we also need to be aware that nothing is really ours. Everything that we have, what we enjoy, are just loans from Fate; they can easily be given to us and easily taken away from us. Fate does not owe us anything.

With this mindset, it then makes sense not to be attached too much with what we have in the present, and it should allow us to give freely to others just as God (or Fate) has freely given to us.

Photo by Vladimir Solomyani on Unsplash

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