The key ideas

The Art of Money Getting

P. T. Barnum, 1880

A new sofa led to building a whole new house. Why does a rising income sometimes bring ruin closer? The showman Barnum explains his rules for making money through stories of merchants, advertising and other people's debts.

Who it is for

For anyone who wants to understand how earning, spending and reputation work in a business of your own

Getting rich does not always mean success.

The sofa that needed a new house

A friend of Barnum's began to grow rich, and his wife wanted an elegant new sofa. Next to the old furniture it looked out of place. So they bought chairs to match, then sideboards, carpets and tables. Soon the house itself seemed too small and old fashioned for such things, so they built a new one. The owner worked out that one sofa had cost him thirty thousand dollars.

But the real trouble came after. The new house called for servants, carriages and parties, and now the family spent eleven thousand dollars a year and could barely make ends meet. Ten years earlier, the owner said, they had lived on as many hundreds, and lived more comfortably, because they had fewer cares. Only rare good luck saved him from bankruptcy. Barnum draws the lesson: prosperity tests a man more severely than want.

Phineas Taylor Barnum, the famous American showman, gathered his rules in The Art of Money Getting, published in 1880. Making money in America, he believes, is easy. Keeping it is the hardest thing in the world. His first rule: spend less than you earn. He recalls Mr. Micawber from the novel by Dickens. On an income of twenty pounds, spend sixpence more and you are the most miserable of men. Spend sixpence less and you are the happiest.

This is advice from a man of the 19th century, and the sums are the sums of his day. But the mistakes in his stories are easy to recognize even now. It is good that you are starting with the question of where the money goes: many people only ask it once the money is gone.

Saving a candle and losing an evening

Barnum remembers farmhouses in the days before kerosene. A guest was served a fine supper, but reading in the evening was impossible: only one candle was lit. The lady of the house lit a second one only on special occasions, once or twice a year. She saved a few dollars, though the knowledge that extra light would have brought was worth more than a ton of candles.

Worse still, feeling very thrifty, she would decide she could afford twenty or thirty dollars on ribbons and frills. Barnum sees the same imbalance in businessmen. They save old envelopes and scraps of paper, then waste time, give expensive dinners and keep carriages. Punch magazine compared such people to a man who bought a herring for a penny for his dinner and then hired a coach and four to carry it home.

Hence his formula: economy is not meanness. Penny pinching in one place often becomes a license to waste in another. True economy, for Barnum, means always keeping your income above your spending: wearing old clothes a little longer, going without new gloves, eating more simply if you have to. Then there is always something left over, and a penny here and a dollar there, put out at interest, slowly grow.

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About the author

Phineas Taylor Barnum was an American businessman and a promoter of public shows. In this book he gathered his rules of business and explained them through his own experience and stories with a moral.

All books by this author: P. T. Barnum

Terms from the book

  • Franklin
  • Puritans
  • Beecher
  • Dickens
  • Henry
  • Lind
  • speculation
  • promissory note
  • Philosopher's Stone
  • Creditor
  • demand
  • Cuvier
  • Micawber: Wilkins Micawber, a character in Charles Dickens's novel David Copperfield, a man forever in debt who keeps waiting for “something to turn up”.
  • Punch: Punch, a British humor magazine published from 1841.
  • Quaker: A member of the Protestant Society of Friends, known for a strictly plain way of life.
  • Randolph: John Randolph of Roanoke, an American congressman from Virginia in the early 19th century, known for his biting speeches.
  • Crockett: Davy Crockett, the 19th century American frontiersman and congressman who died defending the Alamo.
  • poorhouse: A shelter for poor people who cannot support themselves.
  • Muhammad: The Prophet Muhammad, the founder of Islam, who lived in Arabia in the 6th and 7th centuries.
  • Rothschild: Mayer Amschel Rothschild, an 18th century Frankfurt banker who founded the Rothschild banking dynasty.
  • Astor: John Jacob Astor, an American fur trader and real estate investor, one of the richest people in the United States in the early 19th century.
  • Vanderbilt: Cornelius Vanderbilt, a 19th century American shipping and railroad magnate.
  • Samson: The strongman of the Bible who lost his strength when his hair was cut.
  • surety: A promise to answer to a creditor for someone else's debt; the exact terms are set by the contract and the law.
  • auction: A sale where people bid against each other for the item on offer.
  • Genin: John Nicholas Genin, a New York hatter; in the book his purchase of a concert ticket serves as an example of advertising.
  • sheriff: In the United States, an elected county official who, among other duties, sells off debtors' property by court order.

All terms

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