Benjamin Franklin’s most famous quote isn’t even Benjamin Franklin’s actual quote.
I was on Google+ last night and came across this entry. It’s from our good old friend Benjamin Franklin’s Google+ page. Because, you know, he has a Google+ page. Anyway, Benjamin Franklin obviously misquotes himself. He says here “A penny saved is a penny earned.” But that’s not what he said! What he actually said was
What does that even mean? It means that people today only give him half credit for what he actually said. He said if you save a penny, it’s worth two pennies. It’s in the book! Check it out on Amazon.
When I came across this quote last year, I realized that it was the perfect synergy for Homes in Order. My research told me that by making extra payments on the mortgage early, if the typical homeowner paid $1, they would actually save $5 in interest. On my original mortgage on my own house, I had an 80/20, and the 20% mortgage had a crazy expensive interest rate of over 12%. But the math back then said that it was cheaper than getting mortgage insurance. Anyway, on that mortgage, if I’d paid $1 extra, I would have saved $36.66 on the first payment. I didn’t understand it back then, and I just waited 2 years until the prepayment penalty expired and I refinanced to a lower rate.
So, the back story of Homes in Order is that I went through a bunch of iterations. “$1 = 5 Bucks,” “YOUR Stimulus Package,” and “Einstein Money.” “Homeowner GPS.” None of them worked, however. So, about 6 months ago, I ran across Benjamin Franklin’s quote.
A penny saved is a penny earned. (Benjamin Franklin)
But his original quote was even more profound, and it was exactly what I had discovered in my research for Homes in Order. It is the motivation for me on how to save money. The best reason to save money is so that you can have more money later.
When I read that, it really did hit me to the core. That was exactly what I had been trying to say for 5 years of developing this project. In previous iterations, I’d say “I can guarantee that you will instantly turn $1 into 5 Bucks” or “Unbelievable! Trust me, it woks!” But the essence of Homes in Order is really more simple and pure than that. If you save money, you’ll earn money. It teaches you how to save money, and it teaches you how paying off the mortgage early saves a ton of compound interest. The faster you get out of debt, the more you will benefit.
Saving is good.
Thanks, Mister Benjamin Franklin, for putting into words so simply what I have spent years trying to communicate.
Oh, BTW Ben, you actually misquote yourself on Google+! But glad you’re taking advantage of the technology!