Everybody knows that when it comes to investing, the words and principles of Benjamin Graham are golden. But Benjamin Franklin also had a lot to teach us about investing, beyond his “A penny saved is a penny earned” axiom.
Franklin started with nothing. One famous anecdote has him arriving in Philadelphia as a boy of seventeen with only two loaves of bread and a few coins. Yet he ended up as one of young America’s first self-made millionaires.
Most of the Founding Fathers’ wealth was in land and slaves. Many died in debt, despite their paper assets. High expenses and low cash flow saw to that.
How did Franklin become rich? He started as a printer’s apprentice, which was nowhere near as glamorous as the ones on Donald Trump’s TV show. He scrimped and saved enough to start his own printing shop, printing newspapers, almanacs, and even money for the government. Then he invested in other aspiring printers, funding them to start newspapers in different cities in exchange for a share of the profits. He scaled up his business and created a media empire.
As an ambitious twenty-year-old, Franklin sketched out a plan for his life. It consisted of four simple steps:
- Frugality - to pay off his debts and raise a stake. Franklin even became a vegetarian to save money.
- Truthfulness - and don’t promise more than can be delivered.
- Industry - “avoid any foolish project of growing suddenly rich; for industry and patience are the surest means of plenty.”
- Diplomacy - speak ill of no one (even if it’s true), and speak only good of everyone.
Sound advice for his time and ours.