A Wealth Building Tip From One of History's Greatest Tycoons
One of the great things about building wealth is that the principles involved are timeless. Markets change. Trends come and go. Yet the bedrock insights of wealth creation are just as valuable today as they were a century ago.
Few men have ever achieved more in life than Andrew Carnegie. Born into relative poverty in Scotland, Carnegie's family went into debt to book passage to America. The 13-year-old immigrant took his first job as a "bobbin boy," replacing spools of thread in a cotton mill. In the pre-child labor law early 19th century, he worked 70 hours a week.
His pay for those 70 hours of grueling, repetitive work? A little more than $1. Carnegie didn't mind. His next job paid $2.50 a week. Then $4 a week.
Yet within 15 years he was a millionaire. This at a time when $1 million was a truly staggering sum.
Carnegie was a tireless worker and a natural capitalist. He went on to become one of the world's greatest businessmen. He invested in the emerging business of railroads. He built massive industrial companies. His sale of Carnegie Steel to J.P. Morgan in 1901 generated $13 billion in today's dollars.
After creating extraordinary wealth, Carnegie was equally determined to give almost all of it away.
Like in everything else, he succeeded wildly.
What can we learn from Carnegie?
Carnegie was a rags-to-riches story on the grandest possible scale. In a few decades he went from penniless to America's wealthiest tycoon. As such, he believed he could lead the way for others.
His prescription for a good life was simple. Spend the first third acquiring as much education as possible. Spend the next third acquiring as much wealth as possible. Spend the final third giving away as much wealth as possible.
Carnegie was immensely wealthy. Yet he viewed money with a fair amount of skepticism. He believed money was only useful when it enabled the pursuit of nobler things. Helping others succeed, or enlightening their minds, for example.
He also had definite ideas about the best way to flourish financially. Carnegie often met with a group of fellow businessmen. They dubbed it the "Master Mind Group." Their animating principle was simple. By closely associating with other exceptional thinkers, we can exponentially increase our own power.
Surround yourself with other talented people, and your own talents will be amplified.
How Carnegie's insight applies to you
Carnegie's Master Mind principle makes sense on an intuitive level. It's also borne out simply by looking at history. Geniuses arrive in clusters. Think of ancient Athens. Just one city across one relatively brief period of time. And yet it produced Socrates. Aeschylus. Plato. Aristophanes. Herodotus -- and many others. Or 15th century Florence. A city of less than 75,000, it produced Michelangelo, Leonardo da Vinci, Bottecelli and Donatello, among others.
Like Carnegie's Master Mind principle, these geniuses saw their creative power blossom via exposure to the work of others. They built on each other's ideas. This creative and intellectual cross-pollination led to some of the world's enduring works of genius.
Carnegie's insight was that business works the same way. We tend to emulate those we are close with. If we're exposed to successful, wealthy people, we benefit. We internalize their ideas. We have access to valuable counsel. Practically speaking, we can form personal connections and networks and leverage them.
Andrew Carnegie was a business savant. Yet even a self-made tycoon doesn't emerge in a vacuum. Carnegie surrounded himself with the most talented people he could find. He derived tremendous benefit from this arrangement.
Are you doing the same? Most of us don't have access to the world's foremost thinkers. Yet that doesn't mean we can't expand our social and professional networks.
For better or worse, our associations tend to define us. Do you want to give yourself the best odds of achieving financial security? Then follow Carnegie's lead and make those associations work for you.