In this segment of the Rule Breaker Investing podcast, David Gardner considers a truism from the 18th-century Swiss philosopher Jean-Jacques Rousseau, who understood that wealth breeds wealth, and that, more importantly, the first step in building your bankroll is the hardest.
A transcript follows the video.
This podcast was recorded on Aug. 17, 2016.
David Gardner: All right, quote No. 1 this month. This one comes from Jean-Jacques Rousseau. It comes to me from one of my Twitter followers, @jackjane12. And here's a great Rousseau quote, and I quote: "Money is the seed of money, and the first guinea is sometimes more difficult to acquire than the second million."
I'll say it again: "Money is the seed of money." Well we, as investors, certainly recognize that. That is one of the miracles, frankly, I think, of my lifetime, or our society, the world in which we’re living today -- that you can actually, if you have some money, that money, without you doing anything, particularly, you can allow that money to grow into more money on its own.
This is sometimes, when I present to kids, talking about investing, especially young kids, the concept that money can just multiply on its own, when invested properly, is really quite a special thing. I'm glad that I was born at a time on Earth where that could be possible. The lazy guy in me loves that, but also the patient person in me appreciates that, and I've seen the benefits in my own life, and the lives of all those in our Motley Fool community. Of our employees. Our many members. I hope that you know that's true in your life.
And so how awesome is it that money is the seed of money? But then Rousseau goes on: "The first guinea is sometimes more difficult to acquire than the second" -- not the second -- "than the second million." And this also is a profound insight. And I completely agree with Jean-Jacques, because that first guinea, the first dollar you have of true savings, getting out of debt, especially in our country, getting out of credit card debt -- I say that in the United States of America, and I’m assuming it’s like that in a lot of other places in the world -- that’s high-interest-rate debt.
Even in a low-interest-rate global environment, you're often paying double digits just to make up for overspending on your credit card. For some of us it's understandable. Sometimes we face emergency situations where you have to do that. But for a lot of us, it was preventable. If we made good decisions ahead of time -- worked to live below our means -- that's a capital-F Foolish approach to life, to live below your means. We have many people who have practiced that for decades. One of our most popular discussion boards on the free part of our site is called "Living Below Your Means." We have a whole culture at The Motley Fool of people who recognize the importance of saving.
But I know especially if you’ve come out of college with a lot of student debt, or graduate school, it can take years to get that first guinea. So even though Rousseau was writing from the 18th century -- a political philosopher -- well, actually, a very talented Renaissance man himself -- Rousseau had it nailed, and it's just as true today in 2016 as it was back in the 1760s, probably, when he wrote this.
It's really hard to get that first guinea, but once you've got that -- truly, I think you've accomplished the hardest thing you have to do in your financial life, and from that point on, money being the seed of money, you have an opportunity to grow it. To invest it. And one of the things I love to see is when people really get started investing, they start to get inspired as their money makes more money. And guess what that does to them? It makes them want to save more. It makes them want to be more and more fiscally responsible and better and better investors.
So like most things, once you get a taste of what the reward can be, it's really inspiring to you, and that's part of what we're trying to do at The Motley Fool is just spread that love of investing. Make it something that's as true of your spirit as it is of mine, and boy, did Rousseau nail it with his spirited line from a few centuries ago.