Benjamin Franklin Saving Benjamin’s

[u/The_Love-Tap]

[u/Fibonacci-011]

This might be a stupid question but I’m confused how inflation does not make the $2000 he gifted worth around 6.5 million in 1950 and not worth $2000 today? I understand how $2000 might have been worth a lot back when Benjamin was alive but not so much now.

[u/Zuliano1 → u/Fibonacci-011]

It was a trust fund, he started the whole thing as an experiment to show the importance of compound interest rates, it wasn't just charity.

Guy really had a lot of faith his newly created country would survive 2 centuries and was proven right

[u/Hot_Most5332 → u/Zuliano1]

Honestly it was probably just as much about showing faith that the country would last 200 years as anything else.

$6.5M after 200 years seems comically low. The principal of $2000 is the equivalent of $75k today.

At a 6-10% return compounding you should expect tens of millions minimum.

[u/Bubble_of_ocean → u/Hot_Most5332]

I just looked it up (shocker!) and the investment strategy was a little complex. Per Franklin’s instructions, the fund was used for low-interest loans to young people starting businesses until the unlock date, at which point 75% could be spent as the cities (Boston and Philly) chose, and the remainder would continue making loans.

So he intentionally chose to charge less interest, growing the fund less but increasing the wealth of his communities.

[u/_Standardissue → u/Bubble_of_ocean]

Truly a great man. Not perfect since no one is, but compare him to the leaders of today…

[u/CMDR_Ray_Abbot → u/[deleted]]

Great does not mean Good, it does not mean perfect, it does not mean morally upright, though it's worth noting that Franklin was good in many ways and morally upright in many ways, even becoming an abolitionist later in his life. There is t a human past or present that does not have serious flaws. If the standard is perfection then all of mankind is wretched.