How Ben Franklin took a good idea of compound interest and made it a great idea, resulting in the Franklin Trusts. (Photo: Bigstock)

Of all our nation’s Founding Fathers, perhaps none was more a rascal than Ben Franklin.

That goes without saying because, unlike his fellow rebel elite, Franklin stands alone as the scientist of the group. As we all know, from Galileo to Feynman, scientists make the greatest pranksters. Indeed, if Groucho Marx hadn’t been born to a vaudevillian family, he, too, might have challenged Einstein at the Pantheon of early twentieth century scientists.

Franklin would become the first notable American to wear the cloak of the rogue scientist. His science is without question, most famously in the episode involving a kite, a key, and a random stroke of lightning. He combined both his scientific method of thinking with his playful mischief-maker attitude when he stunned the Paris court by debunking the popular Franz Mesmer’s mysterious cure.

Asked by King Louis the Sixteenth and Marie Antoinette to serve on a committee to test Mesmer’s mind-altering methods. Franklin quickly concluded Mesmer’s techniques had nothing to do with the claims of the patients. It was all in the patients’ minds.

To prove this, Franklin blindfolded the patients and asked Mesmer to perform his magic. Fearing the inevitable, Mesmer sent an assistant. The blindfolded patients still believed they could feel the “mesmerization” (yes, this is where we get the word), even though wasn’t being applied.

Ben Franklin wasn’t just good at dishing it out, he was equally adept at taking it. When French Mathematician Charles-Joseph Mathon de la Cour decided to spoof Franklin’s Poor Richard’s Almanack with the parody Fortunate Richard, Franklin was up to the task.

De la Cour wanted to make fun of Franklin’s famous optimism. He kiddingly suggested “Fortunate Richard” leave a small sum in his will with instructions not to distribute it for 500 years. After those five centuries, it would have grown considerably, the largesse enough to pay for the most extravagant of desires.

Franklin wasn’t insulted. In fact, he thanked de la Cour and proceeded to draft such a codicil in his own will, the only difference being the duration of the trust – Franklin’s was to last only 200 years.

Yet, despite the appearance of playfulness in his response, Franklin treated the matter with cold scientific calculus. In doing so, he showed us an important lesson (see “What Ben Franklin Might Tell a 401k Fiduciary to Say at an Enrollment Meeting,”, August 15, 2017).

In Franklin’s mind, the 200-year trusts he established, each for the cities of Boston and Philadelphia, presented an experiment. In a way, he was testing the popular English proverb from a century before “A penny spar’d is twice got” (George Herbert’s Outlandish Proverbs, circa 1633).

Rather than spend those pennies, his will saved them. Furthermore, he didn’t expect them to merely double in value, but to grow exponentially as the interest accrued for two centuries.

Actually, after the first century, two-thirds of the trust was to be distributed, with the remainder left to grow. In either case, that amounts to a substantial amount of money. Maybe that’s why the September 1899 Pall Mall Magazine published the first known attribution of the adage “A penny saved is a penny earned” to Benjamin Franklin. It must have been clear by then, with the first massive distributions from the Franklin Trusts, that ol’ Ben was more than mesmerized by the thought of compound interest, he was, quite simply, right about its power.

There are many methods used to show the importance of saving for retirement as early as possible. Who knew the best real-life example and the best lesson would come from one of our Founding Fathers?