Financial lessons from the Founding Fathers

By David Wismer

As the Fourth of July approaches and our country marks its Semiquincentennial (the 250th anniversary of the Declaration of Independence), it’s a good time to look back at what some of the Founding Fathers said about money, wealth, and finances.

At a time of great political division, it’s important to note that the founders did not claim to have created a perfect nation—but rather “a more perfect Union.”

Even with the historical shortcomings at its founding, the United States remains one of the world’s most enduring self-governing republics—and arguably the most successful.  

A recent Newsweek editorial piece commented on the reaction of visitors to the U.S. during the ongoing World Cup matches:

“Americans are routinely told that our nation is hopelessly divided, irredeemably flawed, and perhaps even in terminal decline. …

“But something remarkable is happening during the 2026 World Cup. … Fans from all across the world have arrived in America—and they are absolutely loving it. We too often take our way of life for granted, but many soccer tourists now here cannot stop marveling at what they see.

“America, like every country, has problems. The risk of prolonged decline is very real. Patriotism also does not require pretending that everything is perfect.

“But it does require perspective—and, above all, gratitude.”

The Founding Fathers and finance

According to many sources, seven of the most important Founding Fathers were instrumental both at the time of the Declaration of Independence and in later roles for the new nation: George Washington, Thomas Jefferson, Benjamin Franklin, John Adams, James Madison, Alexander Hamilton, and John Jay.

The historian Richard B. Morris identified key founders based on what he called the “triple tests” of leadership, longevity, and statesmanship. Some add others to the list of most important founders, including Robert Morris, Thomas Paine, John Hancock, and James Wilson.

The founders often came from widely divergent backgrounds and held conflicting views on many key topics, from American foreign policy to the role of banking, public versus private finance, abolition, and the relative importance of a domestic agrarian versus international mercantile economy.

The late Cornell historian Walter LaFeber, known for a half-century of interpreting American history and foreign relations, did not write a definitive book on the Founding Fathers. However, he addressed their ideological differences in his broader scholarship on the U.S. Constitution and foreign policy, arguing that clashes between figures like Alexander Hamilton and Thomas Jefferson established the fundamental, enduring tension between American capitalism and republican democracy.

The History Channel has an interesting perspective on the Founding Fathers, noting that they pledged to risk “our lives, our fortunes and our sacred honor.” While the risk to life was clear for many founders, the Declaration of Independence and subsequent war and nation-building also had negative financial consequences for several leading figures, including Washington, Jefferson, Adams, and Morris. Even Hamilton, the financial architect of the new nation, wasn’t immune.

Some practical monetary advice

The Founding Fathers believed that personal enterprise, financial independence, and broad-based property ownership were essential to protecting individual liberty. While many were wealthy, they generally championed frugality, warned against the dangers of personal debt, and noted the power of compounding wealth.

Many quotations and sayings about money have been attributed to the founders. Here are a few that reflect themes often associated with their writings and public lives.

George Washington:

“To contract new debts is not the way to pay old ones. … We must consult our means rather than our wishes.”

“System in all things is the soul of business. To deliberate maturely & execute promptly is the way to conduct it to advantage. With me, it has always been a maxim. …”

Alexander Hamilton:

“Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions.”

“Industry is increased, commodities are multiplied, agriculture and manufacturers flourish: and herein consists the true wealth and prosperity of a state.”

Thomas Jefferson:

“Never spend your money before you have it.”

“I know nothing more important to inculcate into the minds of young people than the wisdom, the honor, and the blessed comfort of living within their income.”

Benjamin Franklin is recognized as the only founder to sign all four key documents establishing the U.S. His prolific insights on money, wealth, and debt were popularized through his “Poor Richard’s Almanack” and the essay “The Way to Wealth”:

“Remember that time is money. … Lost time is never found again.”

“A penny saved is a penny earned.”

“Think what you do when you run in debt; you give to another power over your liberty.”

“Wealth is not his that has it, but his that enjoys it.”

“Money makes money. And the money that money makes, makes money.” (Colloquial version)

The power of compounding

Franklin famously put his words on compounding to a real-life test, according to several sources.

Upon his death in 1790, Franklin left 1,000 pounds each to the cities of Boston and Philadelphia “with strict instructions: the money was to be lent to young tradesmen for exactly 100 years.”

“Franklin calculated that after a century of compound growth, each fund would multiply substantially. … After 100 years, each city could spend part of the money on public works, but the remainder must continue growing for another 100 years. Franklin predicted that these funds would be worth millions after 200 years of compounding.”

His experiment proved highly successful, with each city’s fund growing into the multiple millions while also supporting public projects and helping to create The Franklin Institute of Philadelphia.

The power of compounding can affect many areas of investors’ financial lives, from simple CDs to college funds, real estate, and—perhaps most importantly—in their eventual investment outcomes.

It also lies at the heart of Flexible Plan Investments’ (FPI’s) risk-managed approach to long-term portfolio growth, where there can be a significant compounding advantage in seeking to mitigate deep portfolio losses through full market cycles.

Veteran strategist and trend follower Greg Morris put it well in an article for Proactive Advisor Magazine: “If you can avoid large negative months (or quarters, or years), your returns can compound at a higher rate over time since large negative numbers destroy compounding—it’s just math.”

As we look forward to July Fourth and the 250th anniversary, FPI wishes everyone a safe and enjoyable holiday—as well as continued success on their journeys toward financial independence now and in the future.