Interesting in many cases behavior that was considered wise in the 1700’s is just as wise still today. There is a little book called The Way to Wealthwhich was written by Benjamin Franklin. It was originally published in 1758 as a preface to Franklin’s Poor Richard’s Almanac. The setting is an auction that is about to begin. As the people are waiting the fictional Father Abraham addresses the gathering on how to have success in business. In doing so he quotes liberally from sayings of Poor Richard’s Almanac. It’s a very short book. The copy I read was only 30 pages. It could easily be read in 15 minutes, but you could spend weeks reflecting on the wisdom within.
Essentially there are four elements to Father Abraham’s address. First, he speaks of Industry. By Industry he refers to working hard, being diligent and avoiding laziness. The essence of his message is that time is the most precious of all commodities. If we are lazy and waste time we can never make it up. If we make good use of our time, we will be rewarded. He notes that “He that riseth late, must trot all day, and shall scarce overtake his business at night; while Laziness travels so slowly, that Poverty soon overtakes him.” Another quote I liked was “At the working man’s house, hunger looks in but does not enter.”
The second point of Father Abraham’s address was Care. I believe this is one of the primary things that drive people to financial desperation even today. It is not that they can’t manage their finances. It’s simply not paying attention. Not taking the time to have a plan. Father Abraham’s point was that you cannot entrust the oversight of your business to others. He says “The eye of the master will do more work than both his hands”, and also “Want of care does more damage than want of knowledge.” Again, I don’t think people get in trouble often times because they don’t know that continually spending more than you earn will get you into trouble, however they simply aren’t paying attention well enough to see their situation for what it is.
Third Father Abraham promotes Frugality. He says if you want to be wealthy think of saving as well as earning. It does no good to be industrious and earn great sums of money if you spend everything you earn. He also notes to be careful of small expenses as well as large. He quotes, “A small leak will sink a great ship.” Often it isn’t the $1,000 dollar HD TV that sinks our budget. It is more likely the daily $4.00 Starbucks. There is nothing wrong with an occasional treat. But sometimes those small daily expenses can add up to large sums over the course of a year. There is much wisdom in this section. He notes “Always taking out of the pot and never putting in, one soon comes to the bottom.” In recent years the average savings rate of the American public has been a negative number. In other words people are continually spending more than they bring in, i.e. taking more out of the pot than they put in. You can’t do that on a continual basis. Another quote that could make for an entire post is “When you have bought a fine thing, you must buy ten more, that your appearance may be all of a piece; but poor Dick says ‘It is easier to suppress the first desire, than to satisfy all that follow it’. It’s amazing how desires are rarely easily satisfied. My pastor once told how a well-meaning person had once given him and his wife a “free” bed. But then of course they have to buy new sheets and a new bedspread to fit the new bed. And of course the old curtains didn’t match the new bed spread. Etc. He said when it was all done that “free” bed cost him a lot of money. Father Abraham continued with “It is as truly folly for the poor to ape the rich, as for a frog to swell, in order to equal the ox.” Many young couples fall into this trap. They get married and immediately expect to have everything that their parents have. The end result is a mortgage they can’t afford, car payments that eat up all of their margin, and a bunch of credit card payments that leave them on the verge of bankruptcy. What they don’t understand is their parents worked for years to get the things they have, but in our microwave culture we don’t want to wait. If we aren’t trying to out-do what our parents worked decades for then we are trying to keep up with the Jones. Neighbor just bought a new SUV. Suddenly my 5-year-old car doesn’t look so good sitting in my driveway. Got to go buy a bigger SUV. Neighbor just bought a 42 inch TV. I’ll show him I’ll get a 50 inch one. And on and on it goes. It is a recipe for financial disaster, yet so many fall into it’s trap.
Lastly, Father Abraham appealed to Knowledge. He noted that those who cannot be counseled cannot be helped. While there are many things that we might freely seek advice on, whether because of pride or embarrassment perhaps, people often do not want to talk about their finances. However, managing your finances is a learned behavior just as much as learning to drive a car or learning to cook. There is no shame in seeking out a wise mentor that you respect. Find someone who has done a good job managing their money and learn all you can. Learn all you can from everywhere you can. Read a book on finances.
The bottom line is if you work hard, pay attention, live a reasonable lifestyle, and seek out counsel wherever possible from those you admire, in the end you will find success.