Andrew Carnegie

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Born in Dunfermline, Scotland on November 25, 1835. He immigrated to the United States with his parents in 1848 at age 13. Carnegie had no more than 2 years of formal education. Whiles in the United States, they were supported by his mother’s family and some Scottish immigrants who went there before them. Carnegie was put to work at as a bobbin boy in a Scottish owned cotton mill (Anchor Cotton Mills), working 12 hours a day for 6days in a week. He later got a job as a telegrapher in the same year at the Ohio Telegraph Company. As a telegraph messenger, he worked hard and memorized locations and faces of important men.

In 1849 when Carnegie was promoted as an operated, Colnal Hames Anderson opened his personal library of 400 volumes to Carnegie on Saturday night. In 1853, when he was about 18 years old, Thomas A Scott of the Pennsylvania Railway Company employed him as a secretary and telegraph operator.  About three years later in 1859, he became a superintendent of the Western Division and he hired his brother Tom to be his personal secretary and telegraph operator. He also hired his cousin Maria Hogan who became the first female telegraph operator in the country. This gave him the opportunity to learn more about management and cost control from the company and Scott.

During his employment with the railroad, he started to invest in companies that supplied the railroad. Soon after he made these investments these companies began paying big dividends. At the age of 26, he had enough money to travel whenever he chose. His dividend checks arrived whether he was in Pittsburgh or Scotland, working or playing. His railroad salary constituted only 5 percent of his income.

At age 30, he resigned his railroad position to go into business for himself with his former bosses at the Pennsylvania Railroad. By his early 30s, he had accumulated his first fortune in oil wells, iron manufacturing, bridge building and bond trading.

At the age of 66, he solid his steel empire for $400 million dollars. Andrew Carnegie’s share came to $226 million, nearly $120 billion in today’s dollars. He went from zero to $120 billion in 53 years, which translates into $2.3 billion a year as at 2009. This was accomplished during a time when there were no phones, no fax machines, no internet, no e-mail, no cars and no smartphones.

His work was usually confined to only a few hours in the morning. He typically would accomplish as much in these hours as most men do in a week. He left day-to-day decision-making to his partners and managed his businesses remotely via mail and telegraph.

He invested in more than 10 companies that sold their products to the railroads. One of the companies he invested into was a company that built bridges for the railroads.

When was 33, he analyzed his finances and was worth about $75 million in today’s dollars. His annual income in dividends was more than $10 million. He figured that “if he carefully managed his assets over the next two years… he would, he estimated, be able to guarantee this level of income in the future.” Although he could have retired at the age of 35, he didn’t.

At the age of 37, he began to focus all his attention and capital on the steel business which he started with a few partners and named the company “Edgar Thompson” after the nation’s most respected railroad executive.

His Business Strategies

In 1873, there was an economic panic and He used this situation to buy out many of his partners. These buyouts gave him the controlling interest in the growing steel business.

In 1880, He purchased about 11 percent of H.C Frick Coke Company when the owner needed capital to expand his holdings. This was a good deal for Carnegie because Fricks’s company supplied coke to heis steel companies. Two years later, He increased his ownship to 50 percent. B 1888, He had about 74 percent shares in the company.

Strategies

  1. He was able to foresee the demand for railroad transportation and the unlimited opportunities surrounding this demand.
  2. He put all of his eggs in one basket by investing in companies that supplied the railroads. His mission was to supply the railroads with whatever they needed and make a profit while doing so.
  3. He had calculated his “enough is enough number” and was focused on obtaining it in order to retire.
  4. He consistently increased his ownership percentages of the various businesses by buying out his partners when times where tough or they needed money. He turned adversity into opportunity.

The Andrew Carnegie Success Formula

The method by which DESIRE for riches can be transmuted into its financial equivalent, consists of six definite, practical steps, viz:

  1. Fix your mind on that exact amount of money you desire. It is not sufficient merely to say “I want plenty of money.” Be definite as to the amount.
  2. Determine exactly what you intend to give in return for the money you desire.
  3. Establish a definite date when you intend to possess the money you desire.
  4. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.
  5. Write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.

In 1853, when he was about 18 years old, Thomas A Scott of the Pennsylvania Railway Company employed him as a secretary and telegraph operator.  About three years later in 1859, he became a superintendent of the Western Division and he hired his brother Tom to be his personal secretary and telegraph operator. He also hired his cousin Maria Hogan who became the first female telegraph operator in the country. This gave him the opportunity to learn more about management and cost control from the company and Scott.

Business

Business: Mercantile and manufacturing pursuits collectively; employment requiring knowledge of accounts and financial methods; the occupation of conducting trade; or monetary transactions of any kind.

Salaried officers of any kind are not in business for a man to be in business, he must be at least part owner of the enterprise which he manages. This rules out the entire salaried class.

Every Man to His Trade/Specialty

There are people who would sail the uncertain sea of business, and devote themselves to making money, a great fortune. We need to know that this chosen path will not be easy; there will be some rocks and shoals in the treacherous sea, giving you a few hints as to the mode of sailing your ship, or rowing your shell.

There is a dividing line between business and non-business of which one is a master and depends upon profits, and the other a servant that depends upon salary. You have to begin as servant with salary, but you don’t have to end there. 

Where to Look for Opportunities

There is no line of business in which success is not attainable. It is a simple matter of honest work, ability and concentration. There is no question about there being room at the top for exceptional men in any profession. The question is rather, how can their services be secured. There is plenty of room at the top. Your problem is how to get there and the answer is simple:

Conduct your business with just a little more ability than the average man in your line.

There are always a few in business who stand near the top, but there are always an infinitely greater number at or near the bottom.

Those who fail luck judgment and had not calculated the means to the end. A young man who has the record of doing what he sets out to do will find year after year his field of operations extended, and the tasks committed to him greater and greater.

The young man who is determined to be a business man will not be thwarted, neither will he be diverted into any other channel.

Quotes

1. “You cannot push anyone up a ladder unless he is willing to climb a little himself.”

2. “As I grow older, I pay less attention to what men say. I just watch what they do.”

3. “Every act you have ever performed since the day you were born was because you wanted something. Aim for the highest and when it’s a question of God’s almighty spirit. Never say I can’t.”

4. “The secret of success lies not in doing your own work, but in recognizing the right man to do it.”

5. “Concentrate your energies, your thoughts, and your capital. The wise man puts all his eggs in one basket and watches the basket.”

6. “People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.”

7. “Immense power is acquired by assuring yourself in your secret reveries that you were born to control affairs.”

8. “Concentrate your energy, your thoughts, and your capital.”

9. “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.”

10. “I believe that the true road to preeminent success in any line is to make yourself master of that line.”

11. “The men who have succeeded are men who have chosen one line and stuck to it.”

– Andrew Carnegie, ‘Autobiography of Andrew Carnegie’, 1920.

12. “The way to become rich is to put all your eggs in one basket and then watch that basket.”

13. “Think of yourself as on the threshold of unparalleled success. A whole, clear, glorious life lies before you. Achieve! Achieve!”

14. “My heart is in the work.”

15. “Do your duty and a little more and the future will take care of itself.”

16. “The man who acquires the ability to take full possession of his own mind may take possession of anything else to which he is justly entitled.”

17. “The experienced in affairs always rate the MAN whose services can be obtained as a partner as not only the first consideration but such as to render the question of his capital scarcely worth considering, for such men soon create capital; while, without the special talent required, capital soon takes wings.” – Andrew Carnegie, ‘The Gospel Of Wealth’, 1889.

18. “No, your Majesty, I do not like kings, but I do like a man be­hind a king when I find him.” – Andrew Carnegie, ‘Autobiography Of Andrew Carnegie’, 1920.

19. “There are instances of millionaires’ sons unspoiled by wealth, who, being rich, still perform great service