How to Save Money: The Care of Money- Plain Facts about Every Kind of ...

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Preface

rp HE writer of this book feels that It is advls- -■• able, although it may not be necessary, to announce positively that he is not connected, either directly or indirectly, with any form of investment, or with any bank or brokerage establishment, or with any institution having anything to do with the sale of stocks, bonds, or securities of any kind. He has no axe to grind at the reader's expense, no scheme to further, and no investment to recommend.

He is telling the truth, the whole truth, within the field of his light. He attempts to get at rock-bottom and to reach the sub-cellar of financial fact. He is aware that on aU questions, and especially those of investment, opinions differ, and that most honest men cross swords when they attempt to appraise, value, and recommend.

What one reliable man considers a good form of investment, may not appeal to the judgment of another equally honest and cautious. He who has been successful in investing along a certain line will naturally favor that form of investment, while another, who thinks that he has been bitten, condemns a good thing, even though his injury may

Preface

not have been caused by the unreliability of the investment itself.

No one is completely fair, and every one is somewhat biassed. Personal experience, natural or acquired conceit, pig^headedness or stubbornness, count mightily in framing opinion and in forming judgment.

All kinds of investments have some intrinsic value, save those which are highly fraudulent, but some give the maximum of security, while others have the minimum of it. Some are sound and solid, while others are purely speculative.

The saver and investor should bear always in mind this great fundamental point, — that the maximum of interest is usually accompanied with the minimum of security, and that the minimum of interest is likely to be close to the maximum of safety.

Good security seldom gives large profits.

The writer has strenuously avoided the exercise of mere personal opinion, and has made every effort to keep far away from individual bias. He has used every known precaution, and he hopes that he has succeeded.

To the little he knows, he has added the much

of what he knows about what others know, and

' what he has written does not in any case represent

his own unsupported opinion. He has dealt in

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Preface

majorities, and has been a strict adherent to the great law of averages, that everything that he has said may have the strength of the composite. The book is not intended for large investors, or for professional money-changers, or for speculators. It is addressed, primarily, to men and women of every age who are financially able to save moderately and systematically, and who wish to learn, therefore, of every form of investment, that they may place their money with the maximum of safety.

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Contents

CHAPTER PAGE

I IThe Materiaustic • • • . 13 n The Provident and Improvident 19

in Living Beyond Our Means • 29

Chapter I The Materialistic

THE critical readers of this book, — and I hope there will be many of them, — may honestly feel that I have leaned altogether too heavily toward the purely materialistic at a sacrifice of the mental and spiritual and that which counts more in the up-lifting and betterment of humanity*

Money, together with those things for which money stands, is largely located within the physical or materialistic field; for money, by itself, is certainly of neither ethical, mental, nor spiritual composition, «nd is, as much as anything else, representative of the material.

I do not apologize, however, for the policy of this book. The material plays by no means a secondary part on the stage of everyday life. If Grod f oimd it necessary in creating the mental and spiritual man to build material headquarters for the housing of the mind and the soul, we have no right to ignore either of the departments of Divine construction.

It is imnecessary to make a comparison between the higher things and the lower things in which the higher things are kept. One without the other would not present, in this world, a completed whole. Therefore, as both are foimd together, one may be considered as essential to human life as the other.

This world, preeminently material in its construction, should be considered and appreciated. It is, for the time being, the physical dwellingplace of the spiritual man. The Almighty placed us here for a purpose, and would not have given us physical land, and food, and other things as material, if they were not to be used by us and made to serve their ordained purposes.

There will be neither money nor business in millennial days, for all things worth having will then be used, not abused. But for the present, and probably for many generations to come, money will play a prominent part, and the making and saving of money will be necessary for present existence and future protection.

To ignore money and money-saving, because they may be purely materialistic,, so long as they are necessary to human existence, is foolish and criminally wrong.

It is impossible properly to develop and maintain the better part of man without careful housing. Food, a roof, and fire will be essential

The Materialistic

so long as we must eat and keep dry and warm. And these things, which' some think are man's natural heritage, at the present time are procurable only by the expenditure of money.

Despise money if you will, and certainly it deserves to be despised, for, in itself, it is the cause of nearly every crime; but do not forsake money which is obtained honestly and may be profitably used. Unless we return to Nature, as, perhaps. Nature intended, we will have to get money or starve to death.

A vessel, freighted with the necessities of life and many of those things which appeal to our higher nature, was stranded on an imknown island. A storm had made her unseaworthy, but her hull held together long enough for her cargo to be brought ashore. Everything was saved, including cases of beautiful paintings and other works of art, and books that live and talk. The captain was a man of education,, but he never could have handled his vessel, if he had not kept his feet on deck while he looked into the clouds. The disaster was no fault of his. Did he order the works of art to be first landed? Certainly not. They came last, and before them, lumber, and stoves, and food. Under his direction houses were built, with roofs that did not leak. Stoves were set up, beds made, and the strongest building of all contained the food supplies. A well was dug, everything necessary for the physical body was arranged for. Then, and not until then, the works of art were taken and placed upon the walls, to add a touch of beauty to the bareness of the materiaL The house, with a roof that did not leak, came first. The physical man was attended to before any effort was made to please the eye or aesthetic taste. The better things were ignored until there was a material place to keep them in.

I told this story in a lecture once, and a man with a long coat, a high collar, and a white necktie arose from the audience. He took highly respectable exceptions to what I had said, for this kind of man is never strenuous in thought or action. He claimed that he would rather have the landscape than the land. He enlarged upon the ethical and reduced the material. When he had finished, I remarked that the man who loved the landscape more than the land found it necessary to stand on somebody else's land that he might see everybody's landscape, and this sort of a man is dishonest, because he is willing to view the free and beautiful things of life at the expense of the hard-working man who bought the land for the visionist to stand upon.

I wanted to use the language of the street, and say that this landscape man was a ^^ dead-beat,"

The Materialistic

who was willing to "beat** his way to a free landscape.

So long as we live largely by the expenditure of money, either we earn that money ourselves, or we are paupers. Many a man, who keeps his eyes turned continuously toward the sky, has no respect for the workers who are laboring to keep him on earth. It is dishonest not to support ourselves and provide for the future, unless we are physically and mentally unable to do so.

I am not asking any man to accumulate large sums of money, for few high-grade men ever do. But I am attempting to show that money-earning and money-saving are positively essential under present conditions, and that the refusal to earn money or to save money, when it can be done, is criminally dishonest, as dishonest as it is to steal your neighbor's house or your neighbor's bank.

If you are able to earn your living, and are able to save money, and do not, you are a voluntary pauper, unworthy of the respect of man.

When you refuse to do these things, you simply and deliberately say to the world that you are willing to live by the sweat of others' brows and by the work of others' hands.

Look into the sky, if you will, love and reverence art, think more of the purity of real beauty than you do of the purely material, but first build a house with a roof that does not leak* If you do not, the rain will wash over your canvases, and the sun will warp your higher thoughts.

The material cannot be built upon the spiritual, but the spiritual lives and thrives upon the materiaL

Never forget the need of a house with a roof that does not leak*

The Provident and Improvident CHAPTER II

BOTH the spendthrift and the miser are plain, simple, and ordinary fools of the most conventional sort. There is not even the flicker of a spark of originality, progress, or of anything else which stands for anything worth while, in their everyday folly. They do not deserve, and they never receive, the respect of anybody, not even of their own kind.

The spendthrift, in the whirl of the world, never meets a friend ; and the miser, in his seclusion, is too unsocial even to see the reflection of himself.

The spendthrift over-pays for everything which he receives. It is Impossible for him to obtain equitable return for the money he distributes. He sows, but never harvests. He works harder In the field of his folly than do the toilers of the soil.

The miser is a storehouse with a hundred entrances and without an exit. He Is a receiver, not a contributor. He and the spendthrift are menaces to society, and a court of sensible equity and common justice, if It could be established, would sentence both of them to hard and active labor — to doing something which would be a contribution to general humanity.

It has been said (but, of course, the statement cannot be substantiated by statistical fact) that more than half of the great middle class of people, especially Americans, are improvident, that they spend all that they earn, that half of them attempt to put out more than they take in, and that they live close to their incomes, or ahead of them, flush to-day and cramped to-morrow.

Whether or not the proportion given is as large, I will not attempt to say, but that it is of considerable dimension would appear to be self-evident.

Practically every physician will admit that he loses from twenty-five to forty per cent of his bills, especially from the middle class of people, and that the lower grade of patients are likely to be of more financial profit to him than are those who fly regularly for shelter under the protecting wing of conventional respectability.

The retail grocer, and others who cater to family trade, and the credit-giving tailor, especially, are obliged to use the utmost caution if they would avoid continuous loss.

The establishment of commercial agencies, credit associations, and trade-protecting orders of every kind, furnish prima facie evidence that a heavy proportion of the people at large are both dishonest and improvident.

The reader may feel that I am pessimistic, and that I am looking upon the dark side of things. The pages of this book are intended to be printed mirrors of fact, reflecting actualities, true statements of conditions that are, not conditions as we would like to have them. I would suggest that the doubter interview the retail merchant, and others, including the house-renters and the sellers of those things which appeal to the alleged better class of society. He may then feel that I have leaned rather toward the optimistic than to the pessimistic view.

Why do people live beyond their means, especially those with incomes sufficient to provide all of the necessities and most of the comforts of life? There is not, and cannot be, any good reason. At best, there is but a feeble excuse, — the exemplification of that false, and yet common, idea possessed even by those who have some brains of fair quality, that, because the world is popularly supposed to judge by appearances, and to reckon us by the outward show we make of ourselves, and to honor the superficial side of life, we are justified in appearing to be what we are not at an expense which we have no right to allow ourselves to assume.

This false conception of things, coupled with the bad judgment accompanying it, is largely responsible for the present deplorable condition of society, although, of course, the real source lies in the lack of personal honor, a quality which is far from becoming universal.

As a matter of fact this reason, or excuse, for living up to our incomes, or beyond them, is without tangible or locatable foundation, for the spendthrift, or the extravagant man, is an allaround loser and a criminal before the bar of humanity ; and, further, he receives no real recognition from those before whom he makes his display, no, not even from his kind.

The sinner, whether his wrong-doing be extravagance, or something not quite so bad, or worse, ^ is a product of vulgarity and corruption, a backbiter, a gossiper, and a busy-body, who, from some normal or abnormal reason, has not what may be considered sense enough to observe in others the very sin he, himself, commits. Therefore, the spendthrift, or his extravagant associate, fails to obtain what he desires, — a position in society, a recognition of what he wants people to think he is. The only benefit that accrues to him, if it may be so called, is that he enjoys artificially some of the luxuries which his sensible neighbor is not willing to have unless he can afford them. He does not, as a spendthrift, or as a representative of extravagant living, obtain a single true friend, and he never receives any real admiration*

The friend who loves us because he is allowed to help us spend our money, or benefits by the expenditure of that money, or who admires us because we have money, does not represent, in fact, even the shadow of the semblance of the stuff friendship is made of. Friends cannot be purchased by money, and dealers in friendship refuse to be money-changers.

A show of extravagance never did anybody any good, and never will. True friendship occurs only in a reciprocating way, and depends wholly upon genuine character. The extravagant man receives absolutely nothing, except the ignoble satisfaction which the exercise of over-expenditure gives to one who will not, or does not, think.

The improvident man is usually a chronic borrower. He lives upon- what he earns, and upon what he can get without earning it. He may or may not intend to make good. If he can, without an effort, he Is likely to do so. If he cannot, he thinks little about it. The little he has left of his conscience is kept In cold storage and melts in the sunlight.

A large proportion of Improvident people refuse to save when they have the opportunity.

They live beyond their means. They would not sacrifice any part of the present for the protection of the future, and yet they expect the provident to help them when disaster comes.

Let me illustrate by a concrete example: Two young men of equal ability, but not of equal character, start to travel the great highway of life. For a dozen years their incomes are the same, and there should be no material difference in their expenses. One allows himself to enjoy the luxuries of life, and at the end of the period he is dollarless. The other has been provident, but not niean. He has lived below his income, and has accumulated some money. The improvident man, who has lived better and enjoyed the luxuries of life, expects the provident man, who has made sacrifices, to share his savings with him. In other words, the spendthrift who has spent his money, — eaten it and drunk it, — asks the man who has saved to give part of his savings to him. He has eaten the whole of his pie, and demands a part of the other fellow's pie. This condition is too prevalent to be a novelty.

It is self-evident that we cannot have money and spend it at the same time. The ever-ready spender does not accumulate, while the systematic saver protects himself against the future.

There would appear to be no reason why the provident man should share his hard-earned savings with the improvident man, who could and would have been in the same position in which the provident man is, if he had exercised the same care and made the same sacrifices.

The sinner cannot escape punishment, and withholding deserved penalties, unless there be sufficient counteracting repentance, is neither fair nor equitable.

The improvident man deserves to suffer. Let him suffer. He has earned a penalty* Let him have it. Better that he suffer ten times over than that the careful man make an undue sacrifice for the benefit of one who threw away what he had.

I know that I am making strong statements, and that some of my readers may misunderstand me, and, perhaps, I am giving them some opportunity to feel that I do not look upon charity as the greatest virtue of all virtues. Let me, right here, assure these readers that I think I have an appreciation of charity, and of what charity stands for. Without charity, and the love it represents, this world would be a desert without oasis, and across it would flow no stream of living water. Charity is the very warp and woof of all there is worth having. But charity, distributed promiscuously, and given as a reward for crime,'

is really an abetter of crime, and does harm where it intended to do good.

There are times when we should help the improvident man, on account of the innocent members of his family, who may be free from fault. To aid him as a part of the suffering family is often justifiable, but to help him, alone, when his present condition is due to his voluntary acts, is not charity at all, and is, at best, of no stronger stuff than the distilled essence of diluted and sentimental philanthropy.

The man who is financially embarrassed because of extravagance, and because he would not save when he could save, does not deserve financial assistance when the inevitable crash comes, and any attempt on the part of the provident man to relieve him financially, unless such relief benefits an innocent family, is not only foolish, but often criminally wrong.

Do not misunderstand me. I am not referring to the man who is suffering because of the inevitable, — from conditions which were beyond his control, — but to the spendthrift, the voluntarily improvident, he who has lived up to his income, or beyond it, when he had more than sufficient to take care of him, and who is now suffering from his own voluntary misdeeds. Such a man deserves no financial help until he has redeemed himself by the sweat of his brow and the strain of his muscle* He is not an object of charity or of philanthropy, and he who loves to help others had better turn the tide of his goodness into other channels, that he may aid the millions of those who are thrown overboard, and who did not sink voluntarily.

There are enough good men, temporarily or permanently in disaster, to furnish all the material philanthropists need for the exercise of their generosity.

To help the deserving is right. To aid the undeserving is wrong ; yes, doubly wrong, because the undeserving deserves no help, and the helping of the undeserving robs the deserving of his due.

Giving more than opportunity to those who are too lazy to grasp it, is to encourage carelessness, extravagance, and sin.

Those who do their best are worthy of all praise and aid, but those who will not do their best should suffer the self-imposed penalty. You have no right to do for another What he did not do for himself, when he comes to you and wants you to do for him what he could have done for himself and would not do.

I have no pity ior the man who won't. I have every sympathy for the man who will.

He who tries to do his best Is a success, no matter what the result may be ; but he who does not try to do his best has no right to expect the man who did his best to share with him the product of his labor, judgment, and sacrifice.

Help those who help themselves, or who try to help themselves, and refuse to aid those who with closed eyes have walked in the tight, and who with open ears have refused to hear the warning thunders of danger.

Chapter III

1D0 not think that I am far away from the truth when I say that experience and observation make me believe that about seventy-five per cent of city dwellers and that about twenty per cent of the inhabitants of country towns spend all that they earn, and that at least one-half of them have lived or are living beyond their means.

Instead of conditions changing for the better, they appear to be going the other way. Probably more people are to-day living beyond their means than there were yesterday, and there seems to be little inclination on their part to practise any sort of economy. Not only do they spend all they earn, but they anticipate their incomes or salaries, incurring indebtedness in advance of possibility of payment.

It is obvious 'that a family of small income, and with legitimate necessary expenses, cannot always do much better than break even, though it practise the most stringent economy; but it is a fact that the majority of people spend all that they make, or live beyond their incomes.

The necessities of life, and most of those things

Hoxo to Save Money

which are considered comforts, are not excessively expensive. Most of us can live comfortably on very much less money than is supposed to be necessary for right living. Foundation expenses are small, over-head excesses are large, and most of the latter contribute very little to anything worth while.

Getting behind is usually due to extravagance or to an imwillingness to do without the unnecessary.

True, no sharp line can be drawn between the cost of comfort and the cost of extravagance, for^ what may appear to be an extravagance for one person may be a seeming necessity for another. But one who cares, and who honestly desires to succeed, will not find it difficult to discriminate, and will invariably recognize the diflference between the necessary and the unnecessary.

Fully one-half of the financial failures are due to pure and simple extravagance in the home and to expenditure of money for personal pleasures entirely removed from necessity. Many a man, who manages his business with anxious care, handles his personal expenses in the most extravagant and foolish way.

Not only are home and personal expenses the cause of half of the business failures, but they are in many cases the prime source of home troubles, leading to the breaking up of the home and covering nearly every form of family impleasantness.

While money appears to be more a part of business than of home life, the foundation of economy, or of extravagance, or of sensible or senseless expenditure, is laid in the home. Here one first begins to save money or to do the reverse.

The economical-home man or woman is usually economical in business.

Home extravagance, particularly that of clothes, has its basis in a desire to make what the world foolishly calls a good appearance, — to decorate the outside without regard to the condition or the necessity. In fact, I think that to this almost insane desire to make a so-called good appearance is due most ^f our extravagance in dress, in furnishings, in decorations, and in the purchase of things more for show than for utility and comfort. Indeed, the display of extravagance is always superficial. We wish to appear well before our friends and neighbors, who we think would judge us superficially. As a matter of fact any undue attempt on our part to dress or live beyond our means works in a direction opposite to our intentions. We are not judged as superficially as we think we are. Most of us, particularly if we are of the middle class, are pretty fairly well sized-up by our friends and acquaintances. They either know what our income Is, or can . come pretty close to It. If we over-dress ourselves, they despise us, even thou^ they may be as guilty as we are*

If we cannot afford to keep horses or automobiles, and we do so, we lose the respect x>f horse-keepers and automobilists, even though they may have less right than we have to drive horses or nm motor-cars.

The shoddy man has no respect for his kind. If he is shoddy, he recognizes the quality In all those who are shoddy.

It Is impossible to understand that peculiar trait in human nature, which encourages one to "show off,'* so to speak, among those who know that one is " showing off.*' It would seem that nothing is to be gained by pretending to be what we. are not to those who know that we are not what we pretend to be. For example, let us suppose that Mr. John Smith is Mr. John Jones's employer, and that Mrs. Smith invites Mrs. Jones to tea. Mrs. Smith knows the size of the Jones income; therefore, she is in a position to judge whether or not her guest is dressed properly and within her means. It is quite probable that the wife of the employee will wear better and more expensive clothes than those worn by the employer's wife. Instead of Mrs. Smith being impressed by Mrs. Jones's clothing, she despises the woman for living beyond the family income, and carries her disgust to her husband, to the detriment of Mr. John Jones.

May I forget honesty for a moment that I may more closely analyze pretence, which is the top, bottom, sides, and centre of the cause for living beyond our means? Let me consider pretence, for the time being, as a commodity with intrinsic value. If it be a commodity, and if it have intrinsic value, then it is valuable only in so far as it is not recognized as pretence, but is considered as representative of fact.

If one cares nothing for truth and honesty, then he may use pretence to some advantage, provided always that he can mask it effectively, and can force it to appear what it is not. This, however, is impossible for any one to accomplish.

The pretender is always the loser, in the long run surely, in the short rim usually. The coldblooded world will weigh him correctly, sooner or later.

There is absolutely nothing to be gained by living beyond one's means: First, because it prevents one from protecting oneself in case of emergency; Secondly, because it is a precarious habit and sets a bad example; Thirdly, because it necessitates economy in some directions, which

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may be dangerous to health and comfort; Fourthly, because, instead of giving the' credit ^ and producing the impression desired, it always results in the opposite; Fifthly, because it is the forerunner of almost certain failure ; Sixthly, it is positively dishonest; Seventhly, because its action always injures and never accomplishes anything.

We pre what we are, and we are taken usually for what we are, except for a transient period or by people whose respect is worth less than nothing. We have what others think we have, and any attempt on our part to produce the impression of possessing more than we really have, can give only a boomerang result.

Living beyond one's means is n6t only wrong, but extremely foolish. Even the most extravagant and foolish have not a particle of respect for their own kind, and in their hearts they admire those who have sense enough to live within their incomes.