Recession Survival, Ben Franklin Style (1)
I recently returned from a weekend of leisure in Philadelphia. After reading Benjamin Franklin’s autobiography, I was inspired to visit his hometown and retrace the footsteps of one of our country’s greatest founding fathers. As I walked along Market Street from Independence Hall to the site of Franklin’s former home, I caught a glimpse of some discouraging headlines at a newspaper stand. Gas prices are soaring. Inflation is rising. The dollar is weakening. I began to wonder how Benjamin Franklin would perceive our modern world and its problems. If we could transport this bald-headed sage through time, what advice would he dispense to us today?
Benjamin Franklin knew how to overcome economic hurdles. As the youngest son of the youngest son for five generations, he was forced to become a self-made man. Throughout his lifetime, Benjamin Franklin had to overcome a lack of formal education, a war, debilitating ailments, libelous business competition, the death of a child and the threat of being hanged. Despite these obstacles, he was able to become (and more importantly, remain) a wealthy man who would shape the aspirations of many business moguls to follow, including Andrew Carnegie.
As a prodigious writer, Benjamin Franklin was kind enough to leave the world with a large corpus of work. The subjects of his writings were diverse, covering everything from the properties of electricity to the benefits of dating older women. Somewhere in between, he managed to share a great deal of financial advice. Although his words of wisdom are appropriate for any economic climate, Franklin’s commentary is made all the more relevant by today’s difficult financial times.
Benjamin Franklin has long been revered as the father of frugality. Although he likely never wrote these exact words, the phrase, “A penny saved is a penny earned” is the quote most commonly attributed to him. But Franklin’s belief in avoiding unnecessary expenses went deeper than coining catchy phrases. As a teen living in England, he forwent beer for water and meat for vegetables in an attempt to save money. By threatening to move to a new London apartment, he was able to convince his landlord to reduce his rent by over fifty percent. Through his actions and words, Franklin advocated a life of frugality to his friends, family and the readers of his many newspapers.
If Benjamin Franklin were alive today, it is unlikely that he would spend his money on an expensive car, jewelry or even cable TV. In “Poor Richard’s Almanack”, he advised people to “beware of little expenses.” He continued, “A small leak will sink a great ship.” The difference between basic cable and extended cable may only be $20 per month, but $240 per annum invested in the stock market could one day grow to a non-trivial sum. Franklin realized that making small sacrifices can drastically reduce expenses without noticeably deteriorating the quality of one’s life.
Even when he began to amass a large amount of wealth, Benjamin Franklin continued to live well below his means. Realizing that times were about to become difficult for the colonies, he warned his wife that “when people’s incomes are lessened, if they cannot proportionally lessen their [expenses] they must come to poverty.” He continued this theme in his self help book entitled “The Way to Wealth” when he said, “Gain may be temporary and uncertain, but ever while you live, expense is constant and certain.”
Reducing expenses and living below one’s means would be just the first step that Benjamin Franklin would advise for Americans today. In a time of recession, he would assuredly promote the idea of investing in yourself through education and other forms of self improvement. As a young teenager living in Boston, Franklin was able to overcome his lack of formal education by studying the works of authors, philosophers and scientists. His natural gifts, combined with self-gained knowledge, provided him with the ability to improve his lot in life.
Realizing the importance of never growing stale, Franklin continued his education throughout his entire eighty-six years. His study of poetry and prose gave him the skills to become an excellent writer, which in turn enabled his printing company to prosper. His knowledge of religion and politics provided him with the skills required to become America’s most successful foreign ambassador. His scientific inquests brought him the fame he needed to garner respect from the people and the influence of kings. In short, knowledge was Benjamin Franklin’s great enabler.
If Franklin were operating a business in our world today, he would use the current economic slowdown as a time to educate himself and his workforce. As he put it, “Genius without education is like silver in the mine.” At face value, this analogy might seem no better than one claiming, “Genius without education is like fish uncaught in the sea” or “Genius without education is like a seed left unfertilized.” However, it is no accident that Franklin chose to compare education with a valued precious metal. He, more than most people of his day, realized that knowledge begets wealth and power. The value of the dollar may go up and down, and the price of oil may fluctuate daily, but Benjamin Franklin knew that knowledge is everlasting. He expressed this idea most eloquently when he said, “If a man empties his purse into his head, no one can take it from him.”
Through the combination of a frugal lifestyle and constant self-education, Benjamin Franklin drew a roadmap for living which has proven itself useful for over two hundred years. His philosophies have helped businesses and individuals excel during good times and bad. As the U.S. economy slows, emulating Franklin’s traits can surely do no harm, and would likely do good for many.