With Presidents’ Day recently passed, let’s discuss how George Washington and Abraham Lincoln both could have benefited from a modern-day financial advisor’s advice.
Lincoln’s personal finances were a struggle throughout his life. While he was known for being honest and hardworking, he did not seem to have a natural knack for money management. Before he entered politics, he worked as a lawyer, but his legal practice was not always profitable. He also invested in a general store, which went bankrupt in 1833. But he worked hard to pay off his debts, thus earning him the reputation of being honest, which helped his political career.
Once Lincoln became president, his personal finances were less of a concern, but he did not seem particularly wealthy either. His salary as president was $25,000 a year. His wife, Mary Todd Lincoln, was known to spend extravagantly, which no doubt led to further financial strain on their household.
Lincoln’s approach to money was grounded in personal responsibility, hard work, and integrity. This set the framework for a key value in finance: Work hard and honestly, do your part, and you will be able to gain that “new birth of freedom” Lincoln was talking about in his Gettysburg Address.
George Washington approached wealth in a different way, focusing on personal wealth management, investments, and managing the finances of the fledgling United States. He used a methodical strategy in both his own finances and his presidential duties.
Washington’s primary source of wealth came from his Mount Vernon estate, which he managed carefully. However, the estate was heavily in debt due to Washington’s investments in the western territories and property maintenance costs. To secure loans and keep his finances afloat, he often used his influence and other forms of credit. He looked at his land acquisitions as an avenue to a prominent place in Virginia’s economic and political landscape.
At the time of his death, his estate was still heavily in debt. He often struggled with paying off creditors, and he faced challenges in liquidating land holdings to cover those debts. Washington took care to structure his estate’s inheritance so that his debts were mostly repaid.
As the first president, Washington was instrumental in shaping the financial system of the United States. He appointed Alexander Hamilton as the first Secretary of the Treasury, and together they set up key systems, such as the creation of a national bank, the establishment of the U.S. mint, and a stable currency. Although Washington was hands-on in stabilizing the government after the massive Revolutionary War debts, he always had one eye on retirement, as he wanted to return to Mount Vernon. In his will, he made provisions to ensure his estate was well-managed after his death, and he expressed his desire for the country to remain financially stable. Well, nice sentiment at least.
Although his financial life was complicated at times, Washington’s approach to both personal and national finances helped lay the groundwork for the country’s economic systems.
Both George Washington and Abraham Lincoln’s approaches to financial planning were shaped by their early life experiences and investments. They each had a pragmatic attitude towards wealth and a keen sense of responsibility. Even though they had advisors (accountants, land agents, and some financial experts), they would have been better served by entrusting a modern-day financial advisor who might have offered some practical advice on diversification and managing debt more strategically. Having someone with modern expertise in managing money would have helped them avoid some financial pitfalls.
However, both Washinton and Lincoln were dealing with significant personal and national responsibilities during their lifetime — especially during their presidencies — so their financial situation might have been one of those things that was simply too hard to manage amid everything else. And financial advisors were not as common or accessible as they are today.
Washington and Lincoln lived in simpler times. Now more than ever, safety in retirement is much more important, and much more complicated to accomplish. A financial advisor is like a doctor for your financial situation. He/she can develop a financial roadmap, which can provide you with the safety and income that you require in retirement.
Today, most successful individuals utilize financial advisors to help guide them into retirement. But it’s not just for the super wealthy, anyone can benefit tremendously from our help.
Marc Goldstein, our Finance Editor, is a nationally known Financial Educator and Retirement Wealth Specialist, who helps people protect and pass on their wealth.
https://www.mgoldsteinassoc.com/