Wealth Building Lessons From Andrew Carnegie

by James & Miel on September 8, 2008 · 0 comments

Hi All,

Most people are interested in financial security. A great way to study the processes of building wealth is to look at the biographies of people who have managed to achieve financial greatness. One of those people is billionaire businessman and philanthropist: Andrew Carnegie.

At the height of his fortune, Carnegie was worth approximately 298 billion in today’s dollars. His story does illustrate at least two principles that you can bring to your own wealth building processes.

1) Focus:

Carnegie generally argued that individuals should focus on a single industry, instead of spreading investments across multiple sectors of the economy.

I believe the true road to preeminent success in any line is to make yourself master in that line…I have rarely if ever met a man who achieved prominence in money making…who was interested in many concerns“.

Carnegie’s biography represents this point. He was primarily focused on investing in railroad and steel industries during and before the civil war. The defeat of the confederacy and the westward expansion during the 1870s created a massive demand for steel and transportation, thus generating titanic profits for his investments in northern steel mills and railroad companies (1). The main point here is that Carnegie’s focus in certain industries allowed him to profit from contemporary economic trends.

2) Invest In Yourself:

Carnegie was a self made man – and spent a great deal of time building his social and intellectual capital. Carnegie’s views on the importance of building social and personal capital are best shown in his 1889 article “The Gospel of Wealth” (1). In it, Carnegie argued that a philanthropists capital should be best used for providing opportunities for people to better themselves. Among his many accomplishments Carnegie, built thousands of libraries worldwide to improve public knowledge.

Carnegie also spent a great deal of time befriending interesting people. His circle of acquaintances included British politician William Gladstone, American President Benjamin Harrison, Author Mark Twain and philosopher Herbert Spencer. This was done party to help Carnegie’s business interests, but also because Carnegie seems to have viewed knowledge as an important aspect of self improvement.

The main point here is that investing in your social capital can both help others and improve the quality of your life. We may not all achieve Carnegie’s level of wealth, but these principles would seem to help nevertheless. We can build our own wealth by investing in ourselves and our skill set.

Best,

James

P.s. thanks to Tom Butler-Bowdon‘s 50 Success Classics for the inspiration for this post.

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