American money: What Washington teaches us about personal finance


Paul Conley

Paul Conley

Blog author Paul Conley

Paul Conley is a writer, a Dad and a communications consultant living in New York City. You can learn more about him at

Published January 29, 2018|5 min read

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The mythos surrounding the first president of the U. S. is a formidable thing. As impressionable kids we were shown a particular version of Washington — a pillar of virtue who could not tell a lie about chopping down a cherry tree. We’re taught to revere the man who led the Colonial Army to victory and took the helm of a new nation. George Washington, we're told, was a figure worthy of respect and emulation.

But as is often the case with historical figures, there is much we believe that is not true.

A beacon of what not to do with your money

The real Washington — both flawed and brilliant — wasn’t exactly a personal finance exemplar.

In fact, as a man prone to living beyond his means, and with much of his wealth tied up in illiquid holdings, Washington was often short of cash. Famously he had to borrow money from a friend to make the trip to New York City for his Inauguration. He also feel into considerable debt to London merchant Robert Cary, who sold Washington an endless supply of luxury goods and fancy clothes on credit.

That debt, which would come to about $150,000 in today’s money, grew at 5% a year and hung over the new president for roughly a decade. He was only able to pay it after received yet another inheritance from his wife Martha Custis’s side of the family when his stepdaughter, Patsy Custis, died in 1773.

Martha Custis was the widow of a well-to-do planter and one of the wealthiest women in Virginia. When they married, her wealth passed to Washington — a well he returned to again and again. There’s perhaps a lesson here in pooling resources, but, as far as financial planning goes, relying on your spouse’s money to cover your missteps is hardly prudent.

And yet there is still much to learn from the great men of history. So let’s look at three lessons — many of them less than heroic — the real Washington teaches us about personal finance.

1. Shake off your mistakes

Everyone knows it’s unwise to dwell on your mistakes. That’s true of careers missteps, money mistakes, bad relationships ... just about every sort of mishap. But what if your mistakes were huge? What if you, single-handedly, managed to stumble so badly it led to a massacre of innocents and the start of a world war?

As screwups go, there may be no greater example than the hapless Washington in his first military campaign. Eager for glory, yet lacking in experience or training, he led a band of militiamen and Native American allies in a campaign to surround a group of French men who were traveling near Virginia during a time of heightened tensions.

Washington lost control of his men and allies, who murdered the French. One of the victims was a diplomat. The French rallied forces and attacked Washington at a small stockade called Fort Necessity. Washington again lost control of his men, who chose to get drunk rather than mount a defense.

Washington was forced to surrender. And in one last epic fail, he signed a document written in French, even though he couldn’t read the language. That document included a confession to the murder of the diplomat. Armed with that confession, the French had the justification to launch the Seven Years (or French-Indian) War.

If it were you who messed up so badly, you’d likely reconsider your interest in the military. But Washington was stubborn and convinced of his fate. He continued to plug away at militia life, accomplishing little and was eventually denied his years-long quest for a commission in the British Army.

And yet, as the American Revolution dawned, Washington presented himself as the only one of the founding fathers capable of leading a military campaign against the world’s mightiest foe. And, well, the rest is history.

2. Invest in real estate

At the time of his death, Washington was worth around $780,000. What makes that figure impressive is it represented almost one-fifth of 1% — 0.19% — of the new nation’s entire $411 million gross domestic product. Translated into today’s world, that would come to more than $25 billion.

Nearly all of Washington’s wealth came from land. As a young man, Washington became a self-taught surveyor, a valuable trade in an era where vast tracts of land were uncharted. As he surveyed the land for clients, he entered into speculation, collecting properties whenever possible. It was a habit he continued throughout his life. Washington was forever investing in land he had first seen as a young surveyor or a young militia officer in the Ohio Valley.

3. Be a 'practical reader'

Washington was an uneducated man. His formal education ended at the age of 11 when his father died. Washington’s mother wanted her son close to home, and she refused young George’s requests that he travel to England for advanced schooling.

His lack of a formal, classical education was a great source of personal embarrassment, according to Dr. Adrienne Harrison, author of “A Powerful Mind: The Self-Education of George Washington.”

Washington went to great lengths to hide his perceived shortcoming, often avoiding conversations or interactions where his lack of education might be uncovered.

More tellingly, Washington set out to teach himself, but only on topics that would prove useful. According to Harrison, our first President had no interest in the Classics, Enlightenment Philosophy or any of the other “serious” topics that consumed the other founding fathers.

Washington, according to Harrison, was a “practical reader.” He collected an enormous number of books, manuals and pamphlets that taught him ways to succeed. His library was filled with works on surveying, military maneuvers and the management of governments and armies.

Washington, it seems, would urge us to put considerable effort into studying those things that improve our finances and careers, while paying little attention to knowledge for the sake of knowledge.

The personal-finance lessons we can learn from Washington are ones of perseverance and practicality. They are about ambition, and stubbornness, and a lack of interest in things that cannot be measured. They are, in the end, the lessons we would expect from a land surveyor who built both a fortune and a nation.

This article is the second in a series on what America's founding fathers can teach us about managing money. You can find more American money ideas, courtesy of Ben Franklin, right here.

Image: Tony Baggett