Carpe Fatum, examiner of life.
He is famous today for an innumerable amount of achievements. Every time I go over his list, I think about the little I did today and feel shame.
Franklin helped craft the American constitution, single-handedly obtained the support of France for America, invented the lightning rod, bifocals, a type of stove, discovered the Gulf Stream current and vehemently fought for the freedom and liberty for the newly formed United States of America. He also wrote an exceedingly famous magazine.
From 1732 to 1758, Franklin cultivated a large following for his magazine–or almanac–printed under the pseudonym “Poor Richard”.
In his pamphlet, Franklin wrote down math problems, weather forecasts, poetry, astronomical information and sometimes demographics. Of all the interesting things contained in the almanac, the most popular content written by Poor Richard were his aphorisms1, maxims and proverbs.
It makes sense; they’re amazing:
“Lost time is never found again.”
“Love your Enemies, for they tell you your faults.”
“If you would not be forgotten, as soon as you are dead and rotten, either write things worth reading, or do things worth writing.”
And my personal favourite:
“There cannot be good living where there is not good drinking.”
The almanac became so famous that it was even read in France, despite the barrier of distance and language. One certain french reader was a mathematician named Charles-Joseph Mathon de la Cour (this translates to ‘of the court.’ If this name does not immediately indicate aristocratic pretension, I don’t know what does). He wrote a parody of Poor Richard, called Fortuné Ricard.
De la Cour mocked the enthusiasm of Franklin’s monetary advice as Franklin was a huge advocate of compound interest, explaining that any person could use it to their advantage. To the aristocratic minds of the time, it would have been absolutely obscene to imagine that any man could attain wealth by his own means.
In the aristocrat’s parody, Fortuné Ricard leaves 5 lots of 100 French livres2 in his will, stating that they must each be held in a compound investment fund for 100, 200, 300, 400, and 500 years. He predicted that this would result in billions or trillions of livres, which were then to be spent on public works projects.
Rather than being insulted by this seemingly foolish estimation, Benjamin Franklin was inspired by the parody.
In his will, he left two lots of 1000 pounds (worth around 4500 USD today) to his two favourite cities: Boston and Philadelphia. The stipulations of his bequest was that the money must be compounded for 100 years before the cities could withdraw funds. Franklin estimated that this would amount to 131,000 pounds, and that 100,000 pounds were to be spent on public works projects and invested in young people finishing their apprenticeships. As for the remaining 30,000, it was to be left in the compound fund for another 100 years before it could be withdrawn again. Franklin estimated its worth to be 4 million pounds.
Franklin was wrong.
When the cities withdrew their funds in 1991, the combined bequest was 6.5 million dollars (5.15 million pounds). And that’s after adjusting for inflation!
The Scribe’s Thoughts:
The contributions made by Franklin towards the betterment of mankind are immense. His profound truths are just as appropriate today as they were nearly three centuries ago. As he has demonstrated, a seemingly quaint but steady investment is far more valuable than we could possibly conceive. How does that saying go again? Something about slow and steady…?
The power of compound interest is only growing more and more relevant in today’s economy, and it is integral to one’s success not only as a business-person, but as a member of society.