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Andrew Carnegie’s Formula of Success

Andrew Carnegie's Formula of Success

Introduction

Andrew Carnegie is one of the millionaires who are worth talking and writing about. He is a man who proved that fortune is not only to be spent recklessly, but also explained how to spend it with thought and purpose. He has repeatedly said that “the business, any business, honest and dishonest, will be always regarded as the enemy of the economy, especially agriculture” (Carnegie, 2011). Carnegie was also a man who contributed to the American education system almost more than all the declarations, guilds, and government committees altogether.

Carnegie as the most accomplished millionaire of the last century is rather an exception to the general list of rich people who had great starting opportunities, income, parent business, and thieving propensities. He is one of the few examples of an ordinary young man from a working class family who managed to turn the American Dream into reality and make millions starting from one and a half dollars a week. He became an embodiment of the American dream: a Scottish immigrant who made a fortune in America.

Early Years

Andrew Carnegie was born in the family of William Carnegie, a textile factory worker, and shoemaker’s daughter, Margaret Morrison. The family lived in a relative prosperity before the start of the 40s. In the XIX century, when as a result of the industrial revolution father’s business went into decline, the mother had to provide for the family by manufacturing shoes. At the cost of enormous efforts, Margaret gave primary education to her children – Andrew and Thomas.

In 1845, after selling their property in Scotland, the family immigrated to the United States and settled in Allegheny, Pennsylvania, where their relatives lived. There, a future steel magnate found his first job as an assistant stoker with a salary of $ 1.2 per week. But soon, the factory owner, having noticed beautiful handwriting of the teenager, transferred him into the clerk. In the spare time, Andrew attended telegraph courses that son helped him to join the small office at the Ohio Telegraph. In 1853 the talented telegrapher took the post of a head of the department in the Pennsylvania Railroad with an annual salary of $2000. During his work at Pennsylvania Railroad, Carnegie became friends with Tom Scott, the owner of the company, which later transformed into a business partnership (Carnegie, 2011).

It is considered that the most important representatives of the American Dream are the industrialists, including Andrew Carnegie. He earned his start-up capital with the help of shares provided by several American companies. The millionaire quickly realized that in the environment ruled by major joint-stock companies big money can be made out of thin air. After examining the structure and geography of American industry, Carnegie made a number of high-risk moves. These moves demanded the pledge of the property, which was earned by several generations of his family. Despite Carnegie’s claims that the results of the operation were astounding, the sum was actually around $30.000. After repeating the pattern several times, Carnegie was able to purchase shares of a successful and rapidly growing company Adams Express, which specialized in railway construction and cargo transportation. Ultimately, the risk was more than justified. His capital was rapidly growing and just in a few more years Carnegie had more than $2 million. He could have stopped after buying large shares of dozen banks, railway and construction companies, but he knew that there are a lot more opportunities ahead (Carnegie, 2011).

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Business Strategies and Luck

Carnegie had almost phenomenal flair for easy money. And the easy money for him meant an ability to effortlessly pull it out of the pockets of other millionaires. In addition to his main activities, he owned a steel group Carnegie Steels, which included the infamous Homestead Steel Works, Carnegie’s head goes in the “piracy.” Anticipating the mood of American businessmen, he began to cheaply buy out things which they then would buy for millions from him. Land and forest areas, water bodies, wastelands, wetlands, farms, unexplored fields – nothing escaped from the hands of an experienced strategist. Of course, there were also obvious blunders. So, for more than thirty years, Carnegie could not find buyers in the desert areas in the South with a total area of ​​20.000 hectares. In the end, he gave all this “wealth” to the state. However, in most cases, the businessman’s efforts did not die in vain. The most successful examples of such transactions are the sale of three oil fields in Texas to John D. Rockefeller’s Standard Oil and the sale of a huge chunk of land to Pennsylvania Railroad for the construction. Andrew Carnegie waged a tough fight with their competitors. For example, to obtain a contract for the construction of a bridge over the Mississippi, he was personally present at the meeting of the board of directors and urged them to transfer the responsibilities to him (Carnegie, 2011).

Philanthropy

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Andrew Carnegie showed interest in philanthropy at a fairly old age when he was already one of the richest men in the world. He explained that the benefactor must be, above all, wealthy with all the spiritual qualities playing a supporting role. “Human life should be divided into two stages. The first – when a person takes, and the second – when he gives” – this is a formulated thesis of Carnegie which he lived by throughout his life (Carnegie, 2011).

The main field of investment for a generous millionaire was education. According to the American statistics, one in ten Americans who received primary and secondary education before 1990 (from this moment the rapid development of private educational institutions began), got their degree at a school built for Andrew Carnegie’s money. The network of public libraries which Carnegie snared virtually the entire country from the west to the east, by the end of his life consisted of more than 2.000 rooms and book archives.

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