Money Lessons You Can Learn From 5 Timeless Quotes

Sure, you can read all the books on personal finance, attend all the seminars, listen to podcasts and dig through YouTube for tips, but the greatest minds of our era have a way of distilling complexities into single, simple thoughts. After all, it’s been said that if you can’t say it simply you simply don't understand it well enough.

With that in mind, here are five quotes that, beneath their simplicity, articulate some of the most important money lessons to achieve long-term financial health and wealth.

"The most difficult thing is the decision to act. The rest is merely tenacity." — Amelia Earhart

While Earhart may not have been talking about money per se, her quote cuts right to the core of one of the biggest hurdles to improving your finances: getting started. If you just graduated from college and are starting to pay off student loans or credit cards, you might be looking at all that debt with a little panic. Or, perhaps you’re thinking about saving for a home, a new car or your own business. The ultimate price tag can look oh so daunting. When these mountains seem too high to climb, it can discourage you from climbing them at all. But what a shame to never enjoy that view!

If you find yourself feeling frozen and doubting that you’ll ever accomplish your financial goals, remember the words of Amelia Earhart. Whether it’s paying $25 dollars extra on your student loan, making that first deposit into the house fund, or meeting with a financial advisor, that first step is monumental and could be the beginning of a rewarding journey. Here’s a little inspiration from people who decided to act, and ultimately reached the finish line.

“Do one thing every day that scares you.” — Eleanor Roosevelt

While this quote resonates beyond finance, there’s a great money lesson here from Eleanor Roosevelt. Frankly, sometimes money can be a little scary. In fact, a recent Northwestern Mutual study found that the average American’s comfort level with taking risks is a 4.9 out of 10. That’s understandable. You want to make the right choices with your money, but playing it too safe can hold you back from opportunities.

While you don’t want to take undue risk with your money, risk is often what helps grow wealth over time. Risk premium is the expected return on an investment minus the expected return on a risk-free investment — it’s what you earn for doing something that may be a little scary. There’s very little risk that you’ll lose the money in your savings account, but you won’t generate much return in exchange. Stocks have a high return potential over the long run because they are risky and there’s potential to lose money. That’s why many people invest in stocks for long-term growth.

But some days on that long-term journey can be a little scary, particularly when the market drops by a significant amount. When that happens just remember Roosevelt’s quote. That thing that scares you, may reward you in the end.

And you don’t have to limit “scaring” yourself daily to investing. Think you deserve a raise or promotion? Be fearless and ask your boss about one — here are a few tips. Get the ball rolling on that business idea you’ve been thinking about. Take time off to travel the world. It’s OK to take a few risks and be scared occasionally (or daily, depending on your tolerance)!

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for 10 years.” — Warren Buffett

Warren Buffett spells out what long-term investing is all about, offering a steep departure from another well-worn, yet fraught, investment quip: Buy low, sell high.

You see, a “buy low, sell high” mentality assumes it’s possible to time the market’s ups and downs to your advantage. And the financial press, always focused on near-term factors, can tempt people into timing the market — either waiting for a big decline to invest or selling stocks at the “top.”

But what if, as Buffett suggests, the market closed tomorrow for the next 10 years and you couldn’t touch your investments? Would you still invest in the same assets? Would you be OK not selling a thing? Theoretically, if you’re investing with the right mindset, the answer should be yes to both. That’s because stocks are tools for long-term growth; they help you achieve financial goals that are decades from today, such as retirement or your child’s college tuition.

“A nickel ain't worth a dime anymore.” — Yogi Berra

The legendary Yankees catcher made an impact both behind the plate and off the field with his sometimes zany “Yogi-isms.” But this seemingly silly quote is an astute observation, whether intentional or not, on the so-called “money illusion.”

The money illusion is an economic theory that suggests people tend to view their wealth and income in nominal terms instead of real terms — basically, we forget to account for a thing called inflation. It’s a highly debated theory, but some economists contend there’s a widespread cognitive bias that makes it hard for people to grasp that $1 today may not be worth $1 tomorrow.

For example, let’s say you get a 2.5 percent raise at work (hurray?) but the rate of inflation is 3 percent. Yes, your salary is a bigger number in nominal terms (your paycheck is a bigger number). However, in real terms you ended up with a 0.5 percent pay cut, because the prices of everything else you buy rose at a higher rate than your salary. It’s why economists, and the Federal Reserve, pay close attention to the “real” interest rate, and you should too.

Fortunately, inflation has remained very low in the United States for quite some time while wages have started rising at a slightly higher clip.

“Wealth is not his that has it, but his that enjoys it.” — Benjamin Franklin

No doubt, you want to reach those big savings goals or get all that debt off the balance sheet. But, in the process of setting aside money for all your financial goals, it’s also important to enjoy what you’ve earned. Don’t feel guilty about spending a little for a memorable family vacation while the kids are young. Treat yourself when you land that new job you’ve worked so hard to get. Paid down that credit card? Sounds like a spa day with the crew. When you’ve got a financial plan and you know you’re covering your goals, there’s no need to feel guilty about spending your money!

Building wealth is important, but as Benjamin Franklin said, don’t forget to enjoy it.