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Did the Founding Fathers have lousy credit?

They were patriots for sure, but some were not exactly financial standouts. Here's what we can learn from some of the signers of the Declaration of Independence.

By Credit.com Jul 3, 2013 10:47AM

This post comes from Kali Geldis at partner site Credit.com.


MSN Money partnerThey may have written the most fundamental document for our nation, but some of the Founding Fathers weren't that great with basic personal finance.

Image: US currency (© Steve Allen/Brand X/Corbis)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, who researched the Founding Fathers for a book he wrote. 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.

He was also a large proponent of taking responsibility for your debts. As a tobacco farmer, Jefferson habitually used 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 a dip in the market.

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 the 2011 federal budget was $76 billion, though the budget is 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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165Comments
Jul 3, 2013 9:17PM
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MSN just can't help taking a cheap shot at the founders of this nation.

Now tell us how responsible 0bama is with OUR money,.....
Jul 3, 2013 8:51PM
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I sincerely doubt that our founding fathers could have envisioned the intrusions on one's privacy that we now see committed every single day by the credit bureaus.
Jul 3, 2013 10:40PM
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seriously? hard hitting journalism here. NO WONER the IRS, NSA, wire tapping, fast n furious and numerous other scandals have gone unchecked. By the way Holder AGAIN lied yesterday answering "no sir" to the question, do you have a file on millions of Americans and then later saying he was "erroneous" in his answer......  See any articles on that? Nope. Just Paula Dean, Trayvon Martin, the founders credit scores, and various Hollywood tidbits. The media humps the administrations legs because WE don't pay attention and hold them accountable for Soviet Union style journalism. Wait till its TOO late, and our rights are gone, country is completely upside down we are in a depression, and have third world medical care..... then MAYBE some of you will wonder what happened. As a Veteran and descendent of a signer (William Fey) I'm appalled How many great men died since 1775 for YOU whom don't even have the respect to pay a little attention the this disaster in the works, voting not on principle, but on race, media sensation, and insanely impossible promises of which NONE have come true. The result? Elected a SECOND time, but this time with the help of the IRS and 52 counties across the country that reported OVER 100% turnout (impossible for you stupid people) which has yet to be, and wont be investigated.... why? Because YOU don't give a damn, YET. .
Jul 3, 2013 7:50PM
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Under Us privacy act of 1974 it states NO third party shall have your information with out your written aproval,And to all all three credit agency are third party so under us law they are illegal.
Jul 3, 2013 9:20PM
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wonderful idea to try and make our founding fathers look bad! is this supposed to make us fell better about Obama?

 

Jul 3, 2013 9:18PM
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How many mortgages could be paid off with 7 billion dollars?  How many tornado, hurricane, flood and wildfire losses could be replaced?  How many nursing homes could stay open? How many medical bills could be paid?  How many years could SS stay in the black?  How many young people could get a college education?  How many Americans could be happy again?  The Egyptian president was thrown out in a day by the military?  How many days would it take to throw out the Washington Taliban?  I used to look forward to July 4.  It was a day to celebrate.  This year, I will not celebrate July 4.  The tthought of a line of money stretching 26 times around the earth going to Africa instead of the Americans in need has taken celebration away from me. I hurt for our people!

Jul 3, 2013 7:49PM
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That's it MSLSD go ahead and drag out some  dirt on our founders the day before we celebrate independence day. Nicely done! But it is expected from you sons of bitches!!!!
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All of the founders risk their lives, and fortunes to initiate the foundations of our nation: what living President hasn't been on the dole (ex) peanut parity man Carter  (ex) Bushitas & Clintonites non profits none ever audited at Trillions...  (ex) all have given away the USA... and to the Communist Chinese like Long Beach, Panama Canal, patents, missile plants, on and on... TREASON WITHIN..smell the stinge and those who get their jobs by repeating the same type of verbage never risk their fat safe desk behinds...
Jul 3, 2013 8:50PM
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Our Founding Father's didn't have huge jet planes. They didn't have telephones and instant messaging.  They didn't have cell phones and satellite radios. They didn't have television cameras all over the world. They didn't have "ask your doctor" ads to addict the country. I imagine our founding fathers had debt, but I also imagine they controlled their debt. Our founding fathers didn't have the Washington Taliban to destroy the country.  Africa was just promised 7 billion dollars in "aid" while Americans are denied FEMA assistance for tornado, hurricand, flood and wildfire losses.  Our founding fathers would not have allowed that. Our founding fathers had a reason to celebrate independence day.  I will NOT celebrate July 4.  The taliban has taken away the celebration for me.
Jul 3, 2013 7:36PM
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Alexander Hamilton's  own son said that his father was so incorruptible about money he wouldn't pick it up if it were laying at his feet. 
Jul 3, 2013 10:04PM
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the founding Father's did not have to contend with Obama care
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The troops who fought, bled and died were paid with Continenals, The United States of America itself was broke and destitute at the end of the War of Independence and could not pay the troops
Jul 3, 2013 7:52PM
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This is an incredibly stupid article and we are all now that much dumber for reading it
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Is there anything the PROPAGANDISTAS won't attack...

Why don't all of you just MOVE...our nation would be much better off than to have the Liberal professorass bought and paid for...by gov...to do nothing more than attack the foundations of our natiions while you draw a pay, benefits, are-retire-on-theJ-O-B; and have tenure,,guaranteed to stagnate a dead everything then l0th year sabaticallito...to fully attack...as if you have had to work soooo hard...Paradox of scum being rewarded...unjustifiably insane...making our nation of which you are fed, safe and secure ...the object of your inner hatred spewed upword, outword, and everyword. Suck on a piece of >>>>>>>>>>>>

Jul 3, 2013 8:07PM
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Slow day in the office? (Please don't tell me you've been researching this for eons of time!)  because. . . DOES IT REALLY MATTER???
Jul 3, 2013 8:49PM
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I doubt Jefferson was popular with the banks given his opposition to the country having a Central Bank existing outside the control of the Federal Government. Washington made a lot of his money from Whiskey, he ran some large stills at the time. I believe that is why he used the military in the whiskey rebellion, kind of cornered the whiskey market or eliminated a lot of competition.

 

I'm not saying that was good or bad, Hey, it's just business!

Jul 4, 2013 1:23AM
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Wow!  Reading the comments has been rather enlightening.   Seems most people don't want to know anything about the founding fathers and would rather continue with their grade school ideas of the 'Great men".   Sort of god-like-worship going on here.  

The founders of this country were not perfect.  They were men...real men.....not actors in Greek Mythology.   I find the fact that they had real warts much more realistic then the nonsense we continue to attribute to them. 

 No wonder this country is so divided on political issues...half the country does not even want to know its own history, let alone the facts of what is happening now. 
Jul 3, 2013 7:29PM
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Obviously it was over regulation, social programs and high taxation that ruined these men, not the un-predictability of capitalism or bad decision making. If we could just get rid of the big three we would have utopia again, ya think.
Jul 3, 2013 8:12PM
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Washington Expenses also included Mt Vernon.  He offered to servi just for expenses as President.  But Congress knew thay could afford that.
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