This is an economic discussion of the sources, uses, abuses, and dangers of wealth.

Different forms of stock and bond investments are considered with their relative degree of endurance.

Hard work, honesty, good judgment, initiative, and other qualities are, of course, essential in the accumulation of wealth. Money may be secured without these essential characteristics, but men who do not have them either lose or spend their money after securing it. They seldom die rich. Statistics on failures illustrate this point most conclusively.

The getting of money is comparatively simple, but the accumulation of money is a very difficult thing. A great many business men make money in their own industry, but lose much in outside ventures and in what they consider investments. It is the accumulation of money, which includes the saving and the safe investing thereof, as well as the earning, which is to be considered in this little book.

The following table shows the percentage of failures for four typical years, classified according to their principal causes. The table speaks for itself:

Number Of Failures

Failures due to -

1915

1914

1913

1912

Incompetence....

29.9%

28.0 %

28.6 %

30.2 %

Inexperience....

5.4%

5.6%

5.1%

4.6%

Lack of Capital...

27.5%

29.4%

29.2%

29.7%

Unwise credits...

2.4%

2.5%

2.6%

2.0%

Failures of others.........

1.0%

1.8%

1.9%

1.3%

Extravagance....

.6%

.9%

.8%

.7%

Neglect....

1.9%

2.2%

2.0%

2.0%

Competition...

5.7%

3.0%

2.3%

1.9%

Specific conditions...

18.9%

16.4%

15.3%

16.5%

Speculation...

.4%

.7%

1.1%

.8%

Fraud....

6.3%

9.5%

11.1%

10.3%

Total .................

100%

100%

100%

100%

Liabilities Involved

Failures due to -

1915

1914

1913

1912

Incompetence....

17.3%

13.4%

18.4%

26.8%

Inexperience...

2.4%

1.9%

2.0%

3.0%

Lack of capital...

28.4%

31.6%

24.9%

33.5%

Unwise credits...

3.9%

3.2%

16.0%

2.6%

Failures of others...

9.2%

16.7%

11.4%

4.9%

Extravagance...

.6%

.6%

.6%

•9%

Neglect...

1.0%

1.0%

.7%

1.0%

Competition....

3.3%

1.2%

.9%

1.3%

Specific conditions....

24.7%

19.8%

14.0%

13.8%

Speculation....

2.2%

3.5%

2.7%

3.4%

Fraud .....................

7.0%

7.1%

8.4%

8.8%

Total .................

100%

100%

100%

100%

Importance Of Thrift

Notwithstanding hard work, honesty, good judgment, and initiative, the habit of thrift is the basis of invested capital. Few people realize the great importance of thrift. Not only is it essential in the accumulation of money, but it largely determines whether a man is to be an employer or a wage worker. Let me illustrate what is meant by this statement:

A man who is naturally thrifty gradually accumulates money and is able to "take a chance" and go into business for himself when the opportunity opens. It may be to have a small store or to operate a great industry, but in either case he is his own boss, and an employer of men. If the statement is true that 5% of the people of this country are employers and 95% are working for others, this probably likewise means that only 5% have the habit of thrift. The man who instinctively saves, by spending less than he earns, however small his earnings may be, has the habit of thrift. Opportunities to go into business for oneself come to everyone sometime. Whether or not they can be accepted, depends on whether one has a little money laid aside which he can put into the enterprise and whether he has enough to stake the family while the enterprise is getting on its feet.

The man who is constantly spending all he earns must always work for others. As the man who is instinctively thrifty automatically becomes an employer of others, so he who is instinctively not thrifty automatically remains a wage worker. When the opportunity comes for him to enter business for himself, he has no capital to invest, he has no savings laid aside to support his family during the unproductive period of the enterprise, and so he must let the opportunity slip by. Yes, the habit of thrift is the first step toward enjoying enduring investments. Furthermore, the habit of thrift is a "good" habit.

Basis Of Most Fortunes

Systematic saving is the basis of most large fortunes. By laying aside a small amount of money each week or each month and investing it in amounts of $100, $500, $1,000, every man may build up a comfortable fortune. For example, $10 a week, put by regularly and invested every ten weeks, so as to return 6 per cent. interest, will amount to $20,000 in a little over twenty years.

The following table vividly shows how small sums mount up into large ones in this way:

No.of years

$5 a week

$10 a week

$25 a week

3

3%

Interest

816.92

1,633.84

4,077.62

4%

"

827.26

1,656.51

4,138.62

6%

"

BONDS

842.81

1,691.96

4,230.57

5

3%

Interest

1,403.51

2,825.83

7,005.58

4%

"

1,432.50

2,87539

7,183.86

6%

"

BONDS

1,493.69

2,998.74

7,498.36

8

3%

Interest

2,351.58

4,723.94

11,737.71

4%

"

2,435.17

4,894.66

12,228.81

6%

"

BONDS

2,626.91

5,271.05

13,182.44

10

3%

Interest

3,032.34

6,086.55

15,135.71

4%

3,190.22

6,380.47

15,940.95

6%

BONDS

3,505.30

7,025.91

17,572.96

15

3%

Interest

4,922.66

9,870.67

24,571.15

4%

"

5,378.75

10,757.50

26,615.80

6%

"

BONDS

6,208.20

12,440.13

31,112.45

20

3%

Interest

7,116.46

14,262.37

35,521.38

4%

"

8,009.30

16,018.60

39,628.37

6%

"

BONDS

9,839.12

19,717.06

49,309.87

Are Good Habits Always Good?

Psychologists tell us, however, that it is very difficult to make an absolute dividing line between good habits and bad habits. What is food for one is poison for another and vice versa. Furthermore, what is a good habit at one time of life may be a bad habit at another time of life.

This especially applies to the habit of thrift. The habit of thrift is necessary for the upbuilding of an individual, industry, or nation, but like other good habits, it can be overdone. When the habit controls the man instead of the man the habit, it is a dangerous condition. The successful person is he or she who has a true perspective of life and who gives the proper amount of time, thought, and energy to the various factors in life proportional to their importance. He who overdevelops any one of the features making up life does wrong and suffers thereby. Does not this especially apply to those who have over-developed the habit of thrift?

Every young person should be thrifty. No young person should depend on inherited wealth. Every one should earn his own living and accumulate his own wealth and not in any way depend on parents or friends. On the other hand, one should not be controlled by the desire for money. Unfortunately this is not the case with many. The average man who has accumulated money through thrift is so controlled by the habit of thrift, that when he reaches the point where additional money is simply a care, he is helpless. He cannot throw off that habit of thrift and accumulation. It has bound him and riveted him to the earth. He is like a prisoner, held in the clutches of this habit of thrift and accumulation. What was a good habit for him as a boy and a young man, often becomes a curse. Although he dies wealthy according to Dun and Bradstreet, yet he dies poor in the sight of God and his friends.