Money Lessons From the Founding Fathers

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By Kali Geldis

They may have written the most fundamental document for our nation, but some of the founding fathers weren't that great with basic personal finance.

We talked to the experts about what the founding fathers' financial flubs and successes can teach you about minding your money.

Thomas Jefferson

Jefferson's famous financial flaw was his large debt load.

Susan Kern, visiting associate professor at the College of William & Mary and the author of "The Jeffersons at Shadwell," says Thomas Jefferson was the victim of a lavish lifestyle and a declining business.

The third President of the United States was never one to pinch pennies, Kern says.

"His financial records are this amazing trove of details and a tool for historians that give us a very exact notation of things - where he was buying, what he was buying - but one wonders if he ever stopped to total the bottom line," she says.

Jefferson would reportedly spend $800 a day (in today's dollars) on groceries while he was in the White House, according to Ted Connolly, a bankruptcy lawyer for Looney & Grossman LLP who researched the founding fathers for a book he authored. A large portion of that was on wine. Not all of Jefferson's debts were of his own doing, though. After his father-in-law passed away in 1774, Jefferson inherited all of his debt - and 135 slaves - in the midst of a volatile Virginia tobacco industry, Kern says.

Money Lessons From the Founding Fathers

Like his fifth cousin Teddy, FDR got most of his money through family holdings. Worth $60 million (in today's dollars) at his peak, he had residences in New York, Maine and Georgia. Then again, he didn't own his famous New York estate until after his mother died in 1941.

Hoover made his money as a mining company executive: After putting 17 years into the business, he ended up with a $75 million fortune -- and extensive holdings in various mining companies.

Few presidents came from more modest origins than LBJ,  but his investments in broadcasting, cattle and private aviation left him with a net worth that topped $98 million.

Madison's 5,000-acre farm was worth a lot, but much of his money derived from his positions as secretary of state and president. And while his fortune at one point reached $101 million, he ended up losing much of it as his farm became less profitable.

JFK had little personal money, but the value of the Kennedy family fortune has been estimated at as much as $1 billion. As one of the nine Kennedy children, JFK's portion would have made him the fifth richest U.S. president in history -- had he lived to inherit it.

Andrew Jackson made his money the old fashioned way: He married into it. Between his 1,500-acre estate and his extensive slave holdings, his fortune topped out at an estimated $119 million.

Teddy Roosevelt inherited an estimated $125 million trust fund, then lost much of it on a failed land venture. Still, his earnings from his writings and his 235-acre estate on Long Island left him in good shape.

Thomas Jefferson was also land-rich: Among other holdings, he owned 5,000 acres at Monticello. But his fortune -- which topped out at an estimated $212 million -- had plummeted by the time he died, and his family had to sell much of his property to pay off his debts.

The Father of his Country was also its richest president: Estimates of his wealth range as high as $525 million. Among other things, he owned 8,000 acres of prime real estate on the banks of the Potomac River -- as well as 300 slaves.

(Wealth is relatively easy to measure: Who's poorest -- that's a tougher thing to gauge. The following presidents are in the bottom tier. But we won't try to rank them in order.) 

It's well known that before he went into politics,  Truman was a haberdasher, but his men's clothing store nearly went bankrupt. His 18 years in Washington didn't net him a lot of money either, but he saved carefully and was able to live comfortably after he left office. He and his wife, Bess, were the two first recipients of Medicare.

"Silent" Cal Coolidge was not known for his flamboyance. After his presidency, he made a solid living as a newspaper columnist and memoirist, but most of his money was tied up in his home in Northampton, Mass.

Education isn't a particularly lucrative occupation, and Wilson's tenure at Princeton didn't leave him a wealthy man -- even though he was for a time the president of the university. Neither, for that matter, did his stints in the New Jersey governor's mansion and the White House.

Although Chester Arthur made a reasonable amount of money as a lawyer and politician, he died with less than $1 million in net worth, putting him among the less affluent ex-presidents.

A log cabin president like Lincoln, James Garfield spent much of his life in public service. In his case, it didn't pay very well: When he was assassinated in 1881, he was more or less penniless.

One of the most colorful men to occupy the White House, Grant lost his fortune when his son's business partner, Ferdinand Ward, defrauded his investors -- among them, the former president.

Andrew Johnson started out as a tailor before rising to become a mayor, a Tennessee state legislator, a governor, a senator and a president. Along the way, he made a small fortune, but lost half of it when his bank failed.

Abraham Lincoln was famously honest, which helps explain why he took on the debts of a deadbeat business partner. The decision left him deeply in debt -- a situation that was later somewhat rectified by his successful legal career.

James Buchanan, Abraham Lincoln's predecessor, was also born in a log cabin. Unlike earlier presidents, he only benefited modestly from his years in public service: Estimates of his personal fortune place it at less than $1 million.

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He was also a large proponent of taking responsibility for your debts. As a tobacco farmer, Jefferson was habitually using credit to make purchases since he would not find out how much money he had made on his exports until months after he shipped the goods. This was a common practice for farmers at the time, but one that caused major problems after the Revolutionary War.

"Following the American Revolution, there was still a lot of debt outstanding to creditors in Great Britain," Kern says. "There were a fair number of Americans who did not want to pay them and Jefferson was not one of them. He wanted to pay them. He was very personally responsible for what he owed."

Benjamin Franklin

Of all the founding fathers, Benjamin Franklin was the most well-known for his frugality. Franklin published "Poor Richard's Almanack" for almost two decades and during that time had some choice quotes about money that still apply today. Here are a few:

"If you'd know the value of money, go and borrow some"
"Beware of little expenses: a small leak will sink a great ship"
"Patience in market, is worth pounds in a year"

Connolly says Franklin's humble beginnings contributed to his frugality. He was one of 17 children and he had to start his own businesses and build up his own wealth. Franklin died a wealthy man and his businesses were successful.

"He would be the Warren Buffett of our time," Connolly says. "He'd be the one making the tough decisions."

James Monroe

The fifth President of the United States was, like Jefferson, not the most financially responsible architect of freedom.

Monroe has sizable debt as he reached the end of his life due to the decline of his plantation. Like many tobacco farmers (Jefferson included), Monroe's business suffered from the lower price tobacco brought.

Connolly says that Monroe even experienced a deed-in-lieu of foreclosure over a $25,000 debt, which in today's terms would be somewhere in the area of $750,000 to $1 million.

Monroe also had to ask the federal government for what Connolly calls "a bailout" of sorts. Having racked up some debts while traveling on behalf of the government, Monroe requested that Congress reimburse him for the expenses to the tune of $30,000. Congress eventually granted him the money.

George Washington

Washington was known as one of America's wealthiest presidents, and this is due in part to his land ownership.

Connolly says both George and his wife, Martha, had large holdings of land, but the key to his wealth was his good sense for money.

"His salary as President was 2% of the U.S. budget, which was pretty big at the time," he says. For reference, Connolly says 2% of last year's federal budget was $76 billion, though the budget is obviously much larger today.

Washington was also known as a diligent note-taker. Though he didn't take a salary from the Continental Army, he did make sure he was reimbursed for every expense he incurred, including mutton and a "chariot."


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