Old-Fashioned Money Wisdom

Lesson 1

Barnum: the showman who went broke and came back

P. T. Barnum made his name with his American Museum in New York, and his 1880 book The Art of Money Getting knows both making money and losing it. The fastest road to ruin in his book is not a failed show. It is a signature. His chapter Don't Indorse Without Security tells of a retired man who endorses a 5,000 dollar note for a thriving friend worth 20,000 dollars. The friend pays, profits, and returns again and again, until signing feels like a matter of course. Then the friend speculates outside his own business, loses, borrows a fresh note to cover the old one, loses again, and at last both men are wiped out.

Barnum's verdict cuts both ways: the endorser should add, I have also ruined him, because easy signatures tempted his friend away from the business he understood. His rule is absolute: never endorse or stand security for anyone, father or brother included, beyond what you can afford to lose, without taking good security. The comeback side sits in two more chapters. In Persevere he honours men who met serious financial difficulties and bridged them over by simple perseverance and honest dealing. In Preserve Your Integrity he argues that a man known to be strictly honest, however poor, has the purses of all the community at his disposal, because everyone trusts his promise. Reputation, for Barnum, is the capital that survives a wreck.

Lesson 2

Spend less than you earn

Barnum opens with the whole secret in one line: the road to wealth, quoting Dr. Franklin, is as plain as the road to the mill, and it consists simply in expending less than we earn. He borrows Dickens's Mr. Micawber to make it sting: an income of twenty pounds a year with spending of twenty pounds and sixpence means misery, while spending a little less means happiness. True economy, Barnum insists, is not meanness, not saving cheese parings and candle ends while splurging elsewhere. That, quoting Franklin again, is saving at the spigot and wasting at the bung-hole: penny wise and pound foolish.

His recipe still works. When a good income leaves no surplus at year's end, form a few sheets of paper into a book and post every expense daily in two columns, necessaries or comforts in one, luxuries in the other. Barnum predicts the luxury column will run double, treble, often ten times the first. His warning tale is a friend whose wife wanted one elegant sofa. Chairs had to match, then tables, carpets, and sideboards, then a new house to hold them, until that sofa had cost thirty thousand dollars and saddled him with eleven thousand a year in upkeep. One purchase drafts a parade behind it, so regulate your outgo by your income and lay up something for a rainy day.

Lesson 3

Avoid debt

Barnum's chapter Avoid Debt is his bluntest. Debt, he says, robs a man of his self-respect, and paying for what you have already eaten, worn out, or used up is working for a dead horse. A young man trusted for a new suit feels the clothes were a gift, until the sixty days run out and the creditor, who has the best memory in the world, must be paid, or lied to, or paid off with fresh debt elsewhere. Then comes the note at interest, and interest works against you while you sleep. Money, he warns, is an excellent servant but a terrible master.

He allows two narrow exceptions, and both carry his test. He repeats the old Quaker's advice to his farmer son: never get trusted, but if you do, let it be for manure, because that will help you pay it back. Tolerable borrowing buys something that produces the means of repayment. He also reports Mr. Beecher's view that a modest debt for land could steady a young man, while insisting debt for food, drink, and wear is to be avoided. His summary is John Randolph's cry in Congress: pay as you go. One honest translation for today: Barnum wrote before credit cards, but his trusted suit is exactly a card balance, and his manure test still separates a tool that earns from a treat that only bills.

Lesson 4

Choose the right work and persevere

Barnum's first golden rule is Don't Mistake Your Vocation. A father, he says, carelessly assigns his sons: Billy a clergyman, John a lawyer, Tom a doctor, Dick a farmer, and Sammy a watchmaker, because watchmaking looks genteel, with no thought for each boy's bent. Put a dozen boys together and two or three will be whittling at locks and machinery, born mechanics, while the rest have different gifts. Barnum counts himself among the rest: he confesses he could not whittle a cider tap that would not leak, and that watchmaking would have meant working uphill for life. Unless a man enters the vocation suited to his peculiar genius, he concludes, he cannot succeed.

Once in the right path, the next rules are Persevere and Whatever You Do, Do It With All Your Might. He quotes Davy Crockett: be sure you are right, then go ahead. He repeats Solomon's warning that the slack hand makes poor while the diligent hand makes rich, and warns against relaxing just short of the prize. Worth doing at all, his proverb says, means worth doing well. Add Don't Get Above Your Business: Mr. Astor, as Barnum reports him, found the first thousand dollars harder to accumulate than all the millions after it. Begin small, know every detail yourself, and remember his answer to the graduate who asked if the law was full: the basement is much crowded, but there is plenty of room upstairs.

Lesson 5

Acres of Diamonds: opportunity in your own backyard

Russell Conwell's lecture opens with a story told him by an Arab guide on the Tigris. Ali Hafed, a Persian farmer near the River Indus, owned orchards, grain fields, and gardens, had money at interest, and was wealthy and contented. A visiting priest called a diamond a congealed drop of sunlight and told him one thumb sized stone could purchase the county, and a mine could place his children on thrones. Ali Hafed went to bed poor that night, having lost nothing, but discontented. He sold his farm, left his family with a neighbour, and wandered the Mountains of the Moon, Palestine, and Europe until, penniless and in rags, he drowned himself in the tide at Barcelona.

The second chapter stings. The man who bought the farm led his camel to drink at the garden brook and saw a flash in the white sands: a black stone with an eye of light, set on his mantel and forgotten. The priest visited, saw the flash, and cried that it was a diamond. Digging there, they found more gems: the diamond mine of Golconda, Conwell says, source of the Kohinoor and the Orloff. Had Ali Hafed dug in his own cellar, wheat fields, or garden, he would have had acres of diamonds. Conwell worked the lesson locally, first asking each town's postmaster, barber, hotel keeper, and factory hands what the town lacked. His homely parable is his father's store, where customers kept asking for jack knives the shop never stocked.

Lesson 6

Money as a tool for doing good

Conwell, a Christian minister, shocked hearers by saying plainly that you ought to get rich, and that getting rich honestly is a duty. His argument is practical: money is power, and you can do more good with it than without it. Money printed your Bible, he says, money builds your churches, money sends your missionaries, and money pays your preachers. When a Temple University theology student corrected him with the saying that money is the root of all evil, Conwell made him fetch a Bible and read it himself, emphasis in the right place: the love of money is the root of all evil. The miser who idolises the coin is condemned. The tool is not.

Barnum ends on the same ground. Preserve Your Integrity, he writes, because it is more precious than diamonds or rubies, and money properly used blesses our race, funding the academies, colleges, and churches we owe in great measure to money getters. His chapter Be Charitable adds the working rule: the best charity helps those who are willing to help themselves, and never gives a prayer instead of a potato to the hungry. Conwell lived his version. He founded Temple University in Philadelphia, his lecture, he notes, had carried 1,674 young men through college, and his church was built with second floor doors opening into empty air, expecting university buildings beside it. They came, and those doors now open into Temple University.

Lesson 7

Your personal money rules on one page

Finish as Barnum and Conwell would insist: write your own rules, on one page, in your own words. Head it My Money Rules, date it today, and write one or two short rules under each heading. Earn: my right work is this, and I will do it with all my might. Keep: I will spend less than I earn, and keep a two column book, necessaries against luxuries, for one month each year. Borrow: I will pay as I go, borrow only for what helps me repay, and sign for no one without security. Grow: I will look for acres of diamonds in my own street and work before quitting or moving, and persevere when I am sure I am right. Tell: I will let people know honestly what I offer, and be polite and kind to everyone who deals with me. Give: I will use money for good I can name, helping people who are helping themselves.

Two honest translations belong at the foot of the page. Barnum notes that a newspaper reader ignores a first advertisement, reads the third, and buys by the seventh: his rule is steady, truthful repetition until people know you: today, a consistent honest presence wherever customers look. His world of store trust and signed notes is now cards, apps, and one tap loans, and the dead horse feels the same. Sign it, review it yearly on that date, and change a rule only in writing, never in a moment of wanting something.

Sources

The Books Behind This Course

This course is taught from classic texts that are free for anyone to read. Every method in the lessons traces back to one of these books.

• The Art of Money Getting by P. T. Barnum (1880), Project Gutenberg
• Acres of Diamonds by Russell H. Conwell (1890), Project Gutenberg

Graduation

Your rules are written. Now live them

You came for old fashioned advice and you are leaving with something better: a page of rules in your own words, built from Barnum's hard won chapters and Conwell's backyard full of diamonds. Spend less than you earn, owe nothing you can avoid, do the right work with all your might, and let your money do good while you have it. Review the page every year, and let experience, honestly recorded, revise it. Congratulations on finishing.

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