Five Lessons on Money From Ben Franklin

This July 4 marked the 250th anniversary of the signing of the Declaration of Independence—a milestone big enough that it’s earned the tongue-twisting name semiquincentennial.

To mark the occasion, we thought it fitting to revisit the financial wisdom of one of the document’s own drafters and signers: Benjamin Franklin.

Franklin wore many hats, including writer, scientist, statesman, diplomat, economist and publisher of both "The Pennsylvania Gazette" and "Poor Richard's Almanac."

It was in these publications that he wrote some of his most enduring, oft-quoted and practical insights on money.

Much has changed over the past 250 years. We’re in an economic environment that now includes things like the New York Stock Exchange, a federal income tax and a central bank, none of which existed at the nation’s founding. Even so, Franklin’s advice still rings remarkably true.

The Alchemy of Budgeting

“If you know how to spend less than you get, you have the Philosopher’s Stone.”

The Philosopher’s Stone is a legendary alchemical substance said to transform ordinary metals like lead into gold. Alchemists believed that the path to transformation required patience, strong method and discipline. And according to Franklin, budgeting, which follows a similar path, is just as powerful.

Carefully tracking how your money is used, spending less than you earn and harnessing your resources to meet future goals helps you transform dollars and cents into a rich and fulfilling life.

On Watching the Little Things

“Beware of little expenses; a small leak will sink a great ship.”

It's tempting to read this as a warning to skip your morning latte at the local café, but that misses the deeper point. That advice is outdated anyway. Franklin isn’t singling out any one expense; he’s cautioning against the slow accumulation of unchecked spending that quietly erodes wealth over time. A leak sinks a ship not because it's dramatic, but because it's unnoticed. It’s the reason, for instance, that we’re mindful of using low-cost funds to help keep expense ratios from taking an outsized bite out of your investment returns over time.

The Value of Ready Money

“There are three faithful friends: an old wife, an old dog and ready money.”

Franklin knew that financial security is about having resources you can count on when things go sideways. In modern terms, “ready money” is often useful. A cash cushion can help you avoid drawing income from investments if the market is down early in your retirement, for example, helping prevent your investments from taking a permanent hit.

Liquid savings in the form of an emergency fund can help you weather unexpected expenses without reaching for a credit card. Franklin wasn’t too keen on debt in general: “The borrower is slave to the lender,” he wrote. Ready cash helps you stay in control of your finances. That’s an important form of freedom.

Making Your Own Luck

“Diligence is the mother of good luck.”

When it comes to building wealth, you don’t have to rely on luck. Buying lottery tickets or taking trips to the casino rarely provides the building blocks of a sound financial future. The same is true of making overly large bets on the next hot stock. Not only is choosing a winner exceedingly difficult, but concentrating capital in a single stock also exposes you to undue risk. When it comes to building wealth, you don’t have to rely on luck. Buying lottery tickets or taking trips to the casino rarely provides the building blocks of a sound financial future. The same is true of making overly large bets on the next hot stock. Not only is choosing a winner exceedingly difficult, but concentrating capital in a single stock also exposes you to undue risk.

What Franklin understood, and what the evidence consistently supports, is that steady, disciplined effort over time is far more reliable than trying to find the next hot investment. A long-term financial plan—one built on regular contributions, diversification and patience—is the closest thing to “good luck” that most of us will ever need.

Enough Can Be a Feast

“Who is rich? He that rejoices in his portion.”

More than once, Franklin pointed out that money alone has never made a person happy, and he was right. Financial planning isn’t about accumulating wealth for its own sake. It’s about defining what you want your life to look like and building a plan to get there. That means setting meaningful goals, understanding what “enough” looks like for you and finding satisfaction in the progress you’re making.

We’re committed to helping you pursue a rich life in every sense of the word. Consider us your co-pilot as you navigate the intersection of money and the pursuit of happiness. And as always, reach out with any questions you have.

Let’s get back to basics!

Learn more about Kimberly Hamlin

Hello! I’m Kim, a wealth advisor at Allodium Investment Consultants, located in Minneapolis, MN. I strive to provide an amazing experience for clients and help them find financial freedom so they can live their lives to the fullest. My passion is to simplify complicated financial concepts through clarifying the fundamentals. In my free time, you will find me spending time with my husband, Tyler, and son, Luke. We love underwater scuba diving, watching our son play sports, and tending to our flower garden.

The information provided is for educational purposes only and is not intended to be, and should not be construed as, investment, legal or tax advice. Allodium makes no warranties with regard to the information or results obtained by its use and disclaim any liability arising out of your use of or reliance on the information. It should not be construed as an offer, solicitation or recommendation to make an investment. The information is subject to change and, although based upon information that Allodium considers reliable, is not guaranteed as to accuracy or completeness. Past performance is not a guarantee or a predictor of future results of either the indices or any particular investment.

Do You Have These Four Key Legal Documents in Place?

No one likes to imagine a time when they might be sick or unable to make decisions for themselves. It ranks alongside cleaning out the garage or scheduling a long-overdue physical—important, but all too easy to postpone. Yet planning for these possibilities can make all the difference.

Without a clear plan in place, the state might step in and appoint a guardian to make financial and medical decisions on your behalf. Someone you didn’t choose could end up deciding where you live, how your money is managed or what medical treatments you receive. That's not a situation any of us wants to be in.

Incapacity exists on a spectrum. It could look like cognitive decline from Alzheimer’s or dementia, physical incapacity after an injury or illness, a sudden event such as a stroke or a gradual decline over time. It can also happen at any age in life, and all legally aged adults should be prepared. That includes adult kids aged 18 plus.

Because these scenarios unfold differently—and at different life stages—you’ll need four key documents to address them: a durable power of attorney, health care proxy, living will and a will or trust.

You may have one or two of these documents already, but comprehensive planning requires all four. Together, these documents create a coordinated safety net. Without one, gaps can appear. It’s a bit like living near a river and buying homeowner’s insurance but skipping flood coverage. You’re mostly protected…until you’re not.

Protecting Women's Wealth

Today, we’re focusing on women and wealth. Our goal is not to generalize, but to explore research and experience related to how women build, acquire, and manage personal wealth. What strengths often emerge? What challenges may arise? And how can each person leverage their unique talents while setting aside unhelpful stereotypes?

Financial Best Practices for All

To be clear, many financial best practices apply to anyone seeking to secure their own and their family’s financial well-being, regardless of gender or background. We believe you are best served by building a solid foundation:

• Establishing personal goals and timelines, and crafting a financial plan for achieving them.
• Building and maintaining a low-cost, globally diversified investment portfolio accordingly.
• Sticking to your plans and portfolio over time, ignoring the mid-pursuit distractions and noise of the media.
• Blending in wealth management as needed to address risks, legacy goals, and more.

We also want to be careful about making broad generalizations about any group of people, including men and women. No group is uniform, and we often find that individuals within any category can differ significantly from one another.

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You’ve probably heard it before: the earlier you start investing, the better. It’s one of the more powerful financial truths out there.

Time can be a big advantage when it comes to building wealth, because your money has more years to grow through the power of compounding.

Whether you’re earning your first paycheck, picking up a summer job, or just now getting around to thinking about your financial future, now is the time to start. You don’t need to be an expert or have a huge income to invest. You just need to take that first step.

And the earlier you start, the more options you’ll have in the future.

Let’s explore a few ways to get started, whether your goal is to save for your first big purchase, build long-term financial freedom, or save for your children's education.