And in my many years of studying the financial wisdom of America's founding fathers, I've been particularly intrigued by the wealth philosophy of Benjamin Franklin. What is truly surprising to me — and I don't think it should be — is how he did it, relying on principles that have proven remarkably durable for over 285 years. Today, I'd like to share the keystone of Franklin's financial philosophy that took him from a runaway apprentice to one of the richest citizens of early America.
Compound Interest — The Remarkable "Golden" Key to Wealth
Benjamin Franklin was wise in recognizing something most of us still find hard to understand: the incredible power of compound interest combined with patience. While most wealth-building advice targets fast returns, Franklin understood the long view.
Franklin wrote in his Poor Richard's Almanack. "Money makes money. And the money that money makes, makes money. This basic premise was one of the foundations of his strategy to become wealthy."
What's especially impressive about this approach is that Franklin didn't merely preach this philosophy — he put it to the test in one of the more fascinating financial experiments in American history.
Franklin's 200-Year Bet
In 1785, at 79 years old and in the twilight of his life, Franklin made a momentous choice. He left two trust funds of £1,000 each (roughly $125,000 in today's dollars), one for the city of Boston and one for Philadelphia. His instructions were simple but revolutionary: the money was to be lent to young apprentices, and most of the returns were to be reinvested into the fund for 200 years.
Remember, this was an investment Franklin designed to last two centuries. This was not just financial planning — it was a vision of finances on a scale few have attempted.
At the end of 100 years, according to his calculations, each fund would have grown to approximately £131,000, and each city might withdraw a portion for public works. Millions more would continue to grow for the next century.
The outcome? When the trusts reached their maturity many years later, Franklin's initial investment had grown to an extraordinary fortune. His experiment had proven his theory true.
The Three Principles of Franklin's Wealth
As I've studied Franklin's methodology, I've distilled three principles at the core of his financial success:
- Start Early and Be Consistent
Franklin is often quoted as saying, "Remember that time is money." He began setting aside small amounts in his 20s, long before he was wealthy. The amount wasn't as important as the regular habit and early start.
I know this principle is true in my own life. In my 20s, I treated investing casually because the sums were small. But twenty years later, many of those early investments have outperformed some of my larger, later contributions because they had more time to compound.
2. Adopt "Productive Frugality"
Franklin didn't just save money — he practiced what I call "productive frugality." This meant avoiding unnecessary spending but investing in things that would generate returns.
"Avoid little expenses; a small leak will sink a great ship," he warned. Yet he gladly spent on tools, books, or connections that helped his printing business or broadened his knowledge.
The difference between Franklin and many of today's frugality advocates is subtle but important: he wasn't cheap just for the sake of saving — he was strategic about where every penny went.
3. The Power of Patience and Long-Term Thinking More important to Franklin was the understanding that great wealth requires great patience. While his peers chased short-term profits through land speculation or trading ventures, Franklin steadily built a lasting fortune over decades.
"He that can have patience can have what he will," he wrote — a philosophy that guided his investments throughout his life.
How Franklin's Lessons Can Make You Wealthy and Successful Today
The question I'm often asked is whether Franklin's system still works in today's lightning-fast, instant-gratification, gig-economy world. My answer is simple yes — perhaps now more than ever.
Consider this: If you invest $500 monthly in the market at an average annual return of 8%, starting at age 25, you'll have about $1.5 million by age 65. Start at 35 instead, and you'll have about $650,000 — less than half — even though you missed only 10 years of contributions.
The math behind Franklin's wealth formula hasn't changed. What has changed is our cultural patience for letting it work.
The Compound Interest of Knowledge
What fascinates me most about Franklin is that he applied this compounding principle to acquiring knowledge as well. He wasn't just a money investor — he was an investor in himself through constant reading, experimenting, and networking.
Franklin was an insatiable reader, participated in discussion groups, and corresponded with thinkers as far away as Europe. Each new insight built on previous learning, creating a compound effect that made him not only rich but one of the most influential intellects of his time.
A Franklin Investment Secret Often Ignored: Diversification
While compound interest takes center stage when people discuss Franklin's wealth principles, there's another concept that gets less attention: diversification.
Franklin never relied on a single income source. He was a printer, publisher, inventor, real estate investor, and postmaster. Each venture brought immediate income and long-term growth potential.
This spread of investments protected him from the booms and busts of the colonial economy and provided multiple paths to wealth — a strategy just as relevant today.
Franklin's Pragmatism and Legacy
What strikes me most about Franklin's approach isn't just that it works — but that it had purpose. He sought wealth not for its own sake but as a tool to support his true passions: civic engagement, scientific discovery, and community improvement.
The 200-year trust funds weren't meant to enrich his descendants but to benefit apprentices and communities for centuries after his death. This makes wealth-building more than just self-interest.
Conclusion: Franklin's Lessons for All Time
After studying Franklin's advice for years, I've concluded its power lies in its alignment with core mathematical and psychological truths. Compound interest is a mathematical certainty. Patience and persistence create sustainable success.
These aren't get-rich-quick schemes or market-timing tricks that rise and fall with the times. They are enduring ideas that have generated wealth across cultures and centuries.
The 285-year-old wisdom that kept Franklin wealthy is as effective today as it will continue to be in the future. The real question isn't whether his approach still works — it's whether we have the discipline and vision to follow it in an age that demands instant gratification.
As Franklin himself might say if he were alive today: The way to wealth hasn't changed — only our willingness to walk the path steadily.
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