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Andrew Carnegie is widely known for his steel company and establishing over 2500 libraries, but what is less known is that he was one of the greatest investors in US history
Here's the story of how he went from $1.20 per week to becoming the richest man in the world.
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Here's the story of how he went from $1.20 per week to becoming the richest man in the world.
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1) He started school at the age of 8 and dropped out after only 4 years. At 12 years old his family moved to the US and he settled in Pittsburgh
Shortly after arriving in Pittsburgh, he began to work as a bobbin boy at a textile mill, changing spools of thread for $1.20 per week
Shortly after arriving in Pittsburgh, he began to work as a bobbin boy at a textile mill, changing spools of thread for $1.20 per week
2) A year later, he began to work as a messenger boy in a telegraph office, earning $2.50 per week.
Shortly thereafter, he was promoted to the position of telegraph operator and began making $20 per month.
Shortly thereafter, he was promoted to the position of telegraph operator and began making $20 per month.
3) At 18, he got his big break & took a job at Pennsylvania Railroad to become the personal telegrapher and assistant to Thomas Scott, superintendent of the Pennsylvania Railroad’s western division.
Scott became his mentor and he learned the ins and outs of the railroad industry
Scott became his mentor and he learned the ins and outs of the railroad industry
4) At 20 his father passed away & he had to become the primary earner in the family.
The next year, Carnegie was presented with an opportunity that changed his life. Thomas Scott persuaded Carnegie to buy ten shares of Adams Express Company for $500.
The next year, Carnegie was presented with an opportunity that changed his life. Thomas Scott persuaded Carnegie to buy ten shares of Adams Express Company for $500.
5) Carnegie didn’t have the money, but his mother took out a mortgage on their home for $500 and loaned it to him.
In his autobiography, Carnegie recalled receiving his first monthly dividend check for $10:
In his autobiography, Carnegie recalled receiving his first monthly dividend check for $10:
6) “I shall remember that check for as long as I live…It gave me the first penny of revenue from capital—something that I had not worked for with the sweat of my brow. ‘Eureka!’ I cried. Here’s the goose that lays the golden eggs.”
7) Shortly thereafter, Carnegie took out a loan from a local bank and invested $217.50 in the Woodruff Sleeping Car Company.
After two years, he began receiving a return of about $5000 annually, more than three times his salary from the railroad.
After two years, he began receiving a return of about $5000 annually, more than three times his salary from the railroad.
8) Using money from his investment in the Woodruff Sleeping Car Company, Carnegie invested $11,000 in an oil company in Titusville, Pennsylvania
He received a return of $17,800 after only one year and over $1 million altogether from the investment. Carnegie was now a wealthy man
He received a return of $17,800 after only one year and over $1 million altogether from the investment. Carnegie was now a wealthy man
9) In 1863, at 28, his income was $42k. About half of his earnings came from his investment in oil, and only $2400 from his salary at the railroad
Additional investments in the Piper & Schiffler Company, the Adams Express Co, & the Central Transportation Co contributed over $13k
Additional investments in the Piper & Schiffler Company, the Adams Express Co, & the Central Transportation Co contributed over $13k
10) Carnegie retired from the railroad at only thirty years old. He would never again work a salaried position at a company he did not own.
At this point, he was keenly aware that the railroad business was booming and there was a high demand to construct large bridges.
At this point, he was keenly aware that the railroad business was booming and there was a high demand to construct large bridges.
11) He proposed building bridges with iron, rather than wood, to make the bridges more durable.
Carnegie needed to invest $80,000 into the business and Thomas Scott, his former boss and mentor at the Pennsylvania Railroad, loaned Carnegie half of the money
Carnegie needed to invest $80,000 into the business and Thomas Scott, his former boss and mentor at the Pennsylvania Railroad, loaned Carnegie half of the money
12) Using his connections in the railroad business, Carnegie built the Keystone into the premier bridge maker in the country.
At 32, he established the Keystone Telegraph Company with associates from the railroad industry.
At 32, he established the Keystone Telegraph Company with associates from the railroad industry.
13) The company received permission from the Pennsylvania Railroad to place wire across the railroad’s poles, which stretched across Pennsylvania.
Within a few years, Keystone merged with the Pacific and Atlantic Telegraph Company and Keystone’s investors tripled their return.
Within a few years, Keystone merged with the Pacific and Atlantic Telegraph Company and Keystone’s investors tripled their return.
14) In 1872, at the age of thirty-six, Carnegie visited Henry Bessemer’s steel plants in England.
While in England, Carnegie realized the potential of steel and returned to America determined to expand his steel business.
While in England, Carnegie realized the potential of steel and returned to America determined to expand his steel business.
15) In 1875, Carnegie opened his first steel plant, the Edgar Thomson Works.
The plant was named after the president of the Pennsylvania Railroad and, not surprisingly given the flattering gesture, the first order was for steel rails for the Pennsylvania Railroad.
The plant was named after the president of the Pennsylvania Railroad and, not surprisingly given the flattering gesture, the first order was for steel rails for the Pennsylvania Railroad.
16) In 1899, Carnegie merged several of his steel companies into Carnegie Steel
Two years later, in 1901, JP Morgan bought out the 65-year-old Carnegie for $480 million. The purchase allowed Morgan to create US Steel and made Carnegie the richest man in the world.
Two years later, in 1901, JP Morgan bought out the 65-year-old Carnegie for $480 million. The purchase allowed Morgan to create US Steel and made Carnegie the richest man in the world.
