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The curious wisdom of Scrooge McDuck

As a child I wanted to be Scrooge McDuck when I grew up. As an adult I question the wisdom of Scrooge holding all his wealth inside his Money Bin.

My hero, Scrooge McDuck

My favourite Disney character has always been Scrooge McDuck.
Scrooge McDuck
In the comics Scrooge is a cantankerous old man (bird?), who is the richest person in the world. Each story follows along as Scrooge experiences an exciting adventure, at the conclusion of which he will invariably have made a profit while staying true to his own moral code.

Scrooge McDuck swimming in money.
Scrooge McDuck swimming in money
The iconic image associated with those stories is Scrooge McDuck swimming through his fortune, which Forbes estimated to be worth “USD$65.4 billion” in 2013. This was housed in a skyscraper sized money box called McDuck’s Money Bin.

Carl Barks, the creator of Scrooge McDuck, made a valuable contribution to the financial education of children. Barks gave Scrooge the motto “work smarter, not harder”, and often wove insightful lessons about money into this stories.

work smarter, not harder
Carl Barks
Carl Barks
In “Scrooge McDuck and Money” McDuck’s nephews are taught about money, credit, inflation, budgeting, taxes, and profitability. True to character Scrooge then charges them for the lesson, informing them “the good things in life are never free”!

As a child I wished that I could be like Scrooge McDuck when I grew up. The idea of diving into a pile of money appealed to me… right up until my younger brother hit me in the face with a bag full of coins after I stole the last chocolate biscuit from the packet. Coins really hurt!

Heroes can fall off their pedestal

As an adult I question the wisdom of Scrooge holding all his wealth as cash inside his Money Bin.

Cash is a terrible store of value. Over time inflation erodes the purchasing power of cash, resulting in the value of what the cash can buy reducing over time.

Allocating a large proportion of a person’s wealth to a single location is a risky endeavour. A single unfortunate event could see that wealth greatly reduced, lost entirely, stolen, or tied up in bankruptcy proceedings.

The aspect of Scrooge’s investment philosophy that I questioned the most however was how short term his thinking appears to be. Would you prefer to have a lake of money or a stream of money?

Would you prefer to have a lake of money or a stream of money?
A lake (or a money box) is a one off store of wealth. Spend it and it is gone. This is the trap that many inheritance beneficiaries, lottery winners, professional sports people, and commodity rich nation states fall into.

A stream is a recurring flow of income. Spend some today, and before long it will be replenished. This is how successful businesses view the world, and is why the likes of Google and Berkshire Hathaway are really money generation machines.

So what?

McDuck’s Money Bin is a surprising choice for a character so gifted at acquiring wealth. Perhaps he just enjoys the thrill of the chase?

This may explain why Carl Barks’ name doesn’t appear on many lists detailing the wise minds of financial education: Bogle, Buffett, Clason, Graham, Lynch, and Kiyosaki. But it should.

Scrooge McDuck and Money

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