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Wednesday, July 19, 2006

Personal Finance - Franklin Style

I've been reading the Autobiography of Benjamin Franklin and came across some paragraphs that were very relevant to personal finance (No surprise there!). Anyway I thought that I'd put them in a post together with few observations for your edification. (I love reading older books - my vocabulary skyrockets for a few hours!).

Paragraph 95

Franklin is discussing one of his employers whom he greatly admired.

I must record one trait of this good man's character. He had formerly been in business at Bristol, but failed in debt to a number of people, compounded and went to America. There, by a close application to business as a merchant, he acquiredr'd a plentiful fortune in a few years. Returning to England in the ship with me, he invited his old creditors to an entertainment, at which he thank'd them for the easy composition they had favored him with, and, when they expected nothing but the treat, every man at the first remove found under his plate an order on a banker for the full amount of the unpaid remainder with interest.

Para. 132

In his youth, Franklin had been trusted to receive payment of acquaintance's debt and ended up using some of the money himself. Here he discusses finally repaying it (approx 5 - 10 years later).

Mr. Vernon, about this time, put me in mind of the debt ow'd him, but did not press me. I wrote him an ingenuous letter of acknowledgment crav'd his forbearance a little longer, which he allow'd me, and as soon as I was able, I paid the principal with interest, and many thanks; so that erratum was in some degree corrected.

I think that these paragraphs are very heartening for those of us struggling to pay off our own debts. If I owed any of my friends and family money, I would definitely look forward ability to treat them to a nice dinner and suprise them with repayment. It would be something to be proud of!

Para.s 142 amd 143

I began now gradually to pay off the debt I was under for the printing-house. In order to secure my credit and character as a tradesman, I took care not only to be in reality industrious and frugal, but to avoid all appearances to the contrary. I drest plainly; I was seen at no places of idle diversion. I never went out a fishing or shooting; a book, indeed, sometimes debauch'd me from my work, but that was seldom, snug, and gave no scandal; and, to show that I was not above my business, I sometimes brought home the purchas'd at the stores thro' the streets on a wheelbarrow. Thus being esteem'd an industrious, thriving young man, and paying duly for what I bought, the merchants who imported stationery solicited my custom; others proposed supplying me with books, and I went on swimmingly. In the mean time, Keimer's credit and business declining daily, he was at last forc'd to sell his printing-house to satisfy his creditors. He went to Barbadoes, and there lived some years in very poor circumstances.
His apprentice, David Harry, whom I had instructed while I work'd with him, set up in his place at Philadelphia, having bought his materials. I was at first apprehensive of a powerful rival in Harry, as his friends were very able, and had a good deal of interest. I therefore propos'd a partnership to him, which he, fortunately for me, rejected with scorn. He was very proud, dress'd like a gentleman, liv'd expensively, took much diversion and pleasure abroad, ran in debt, and neglected his business; upon which, all business left him; and, finding nothing to do, he followed Keimer to Barbadoes, taking the printing-house with him. There this apprentice employ'd his former master as a journeyman; they quarrel'd often; Harry went continually behindhand, and at length was forc'd to sell his types and return to his country work in Pensilvania. The person that bought them employ'd Keimer to use them, but in a few years he died.

These two paragraphs vividly contrast frugality and industry with rampant consumerism. It is interesting to see this same pattern today, around 250 years later.


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