They are these: 1. A place to sleep where the body will be safe.
2. Sufficient clothing.
3. Nourishing food.
4. Toll,* paid out of his earnings for fu ture protection.
The first three are secured, in some degree, by nearly all people, for they are the funda mental protection of life itself. Of those that secure shelter, food and clothing by their own labor, an amazing number never think of the fourth, or future protection, but are willing to exchange it, on the spot, for one or many of the inessential things that may happen to strike the fancy at the moment. In this con nection it has been said that if young men would deposit pennies in the savings bank with the unfailing regularity that they pass over nickels, dimes, and quarters to the keep ers of saloons, cigar stands, and the like, they would never need fear an unprotected old age. The first step then is APPROPRIATION.
The first item to put down on paper is not only the amount of wages received annually, but the factors that are active in earning the wages.
We will return to these factors later. Out of the total annual income there must be taken at once the cost of shelter, food, and clothing. If the subtraction shows that these three items demand more than the annual income, or all of it, one of two things must happen : either more money must be earned or less money must be spent. At first either alternative seems as hard as the other. The wise thing to do then is to make a re-apportionment and bring, by strictest economy (which, by the way, means administration), the annual ex penditure below the annual income. It can be done, and, further than that, a wise per son will see that it is done.
There is now a margin in hand. May not one do with it what one wishes? Logically, no. There is still a fourth fundamental ex pense to pay for regularly; namely, future protection. One may or may not be inclined to put all surplus aside to a future fund; but he may be assured that what he deposits in the savings bank, or pays out for life insur ance, or otherwise invests, he will have; and what he puts into soda, cigars, and hard drinks, he will not have. Here is where each
one of us makes his own decision and with the decision come the consequences.
Let us look at it in this way : Assume the annual income at thirty is $800.00 Total necessary expenses po.00 Balance $ioo.00 Further, let us assume that this program will be carried on for twenty-five years.
Two results are possible, by two opposite methods.
Method No. I : Waste the money. Waste, like all other acts, has its consequences. If the money be simply spent thoughtlessly, the spender is accumulating a thoughtless system of action for twenty-five years. This will af fect not only the amount of money involved in this operation, but it will gradually creep into all his affairs. On the other hand, this money may not be simply wasted thought lessly, but it may be spent, let us say, for drink. In this instance, he has devoted twenty-five years to undermining his health and lessening his capacity from thirty to fifty five, and from fifty-five to the end of his life.
Method No. 2. Save the money. By this method, there will be credited the principal and compound interest on one hundred dol lars, set aside annually for twenty-five years. The total principal will amount to $2,500 and the accumulated interest to $1,831.20, which makes a total of $4,331.20, providing a gross principal that will yield annually, at five per cent, $216.56, and this not only during the lifetime of the investor, but forever, if he so cares to devise it.
Saving, to be a success, must necessarily be practiced for a definite purpose. The mere accumulation of money is not a worthy in spiration. The use of money, we must re member, is strictly confined to the present life. And to this life we must look for the sav ing's object.
It may be to build a home, to educate chil dren, to furnish protection in old age; what ever it is, the object should be worth while and not based on the love of money itself.