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How to Invest with Inspiration from Ben Franklin

Updated on July 29, 2012

Statue of Ben Franklin

You know you're pretty great if you get a statue of yourself places someplace where people can admire you.
You know you're pretty great if you get a statue of yourself places someplace where people can admire you. | Source

A Penny Saved is a Penny Earned

You have to be a really old guy to be the first one to say "a penny saved is a penny earned". Now adays, the saying would be "a billion saved is a billion earned", so you know Ben Franklin lived a really long time ago. In fact, he died in 1790 but his wit and wisdom have lived on to this day. As well as the greatest concept he made popular, the marvels of compound interest. Yes, saving your money and making it work for you by gathering interest, re-investing and watching your nest egg grow over the years. Thus, when you are really old, you can talk about how much you saved and what you're going to blow it on when you're 80 years old.

So, if you're planning on investing for the long term, you could do a lot worse than taking your inspiration from old Ben Franklin.

Death and Taxes

Franklin also said, "But in this world nothing can be said to be certain, except death and taxes". He was so right, because he is dead and he paid his taxes, leaving a considerable estate behind with instructions on how it should be invested. Giving money to cities like Boston and Philadelphia, donations instead of taxes but a subtle difference, to be sure. In his will, he left instructions for these cities to leave his gift of funds untouched for 100 years, except to invest it compounding at 5% (obviously he never contemplated interest rates as low as they are now, so this is something that doesn't happen in a 100 years - doesn't that speak to you about how unusual our economic house is at this particular point in time?). Obviously, leaving your personal nest egg alone for 100 years doesn't really do much for you, as you will be dead. So, take the idea to heart but cut down on the time frame, unless you are a city.

His other thought about government was right on the money, "there is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government". Of course, he could have easily added that, once defrauded, the expectation is that a bailout would follow directly afterwards. In your investments, do not expect the government to be a partner in saving you if you take a risk and lose. You'll just be deep out-of-pocket and still owe taxes for the money you lost.

The wisdom of Franklin

Healthy, Wealthy and Wise

"Early to bed and early to rise, makes a man healthy, wealthy and wise". Of course this is great advice from Benjamin, as nobody who sleeps all day makes a gazillion bucks. In fact, you have to get off your ass and learn a few things before you will become rich. Even marrying into money requires you to get out of bed from time to time. As for the healthy part, it is proven now that inactivity (including watching TV) reduces your life drastically. So, if you want to make money, get out of bed every day. Good things happen when you're awake. Trust me. Dreams are not reality, no matter how much you do it. You forget most of them as soon as you wake up anyway, except for the really scary ones.

It is standard advice to invest in what you know, rather than take a flyer on free advice from friends, family or a Google search. To invest on your own research, again you have to wake up and get out of bed and experience life around you: what people are buying, what they need to live and where they like to go when they have free time. Basic stuff like that. Look around you, because there are ideas everywhere.

"An investment in knowledge always pays the best interest" is another catchy phrase from the Franklinator. I really like that one.

Making excuses for why the hell you're not rich

"He that is good for making excuses is seldom good for anything else", is the sad fact of life. There is nothing beyond that; you are either in the game or you're not. Sure there are a ton of reasons why you're not where you thought you'd be right now, but the greatest excuses do not change the reality of your position in life. You have to move on, not take comfort in all the reasons why you're behind in you grand plan to master your particular universe of happiness.

So, "Never leave that till tomorrow which you can do today!". Don't you just hate this Ben Franklin dude? He's so right on with the advice you totally don't want to hear. There isn't much more to say, except get out of bed, get started right now, don't make any damn excuses, think long term, use compounding interest to get rich and don't wait for the government to help you. 

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