American industrialist Andrew Carnegie (1835-1919) is one of the richest people in history, and is also considered one of the greatest philanthropists ever. Throughout his lifetime, he gave away over $350,000,000 to charitable foundations.
The way Andrew built his vast fortune makes him a true example of self-made wealth. In fact, he and his family were virtually broke when they emigrated from their native Scotland to America when Andrew was about 13.
As a young man, Andrew went through various jobs. He also attended night school, and educated himself by reading and writing. At age 18 in 1853, he began working for the Pennsylvania Railroad Company, and six years later he became the company’s superintendent.
Andrew used his money to make many smart investments in bridges, rail mills, railroad sleeping cars, iron mills, locomotives, and oil fields. In 1865, he became convinced that the iron and steel industries would flourish, so he left his Pennsylvania Railroad Company job to manage one of the companies he invested in: the Keystone Bridge Company.
By 1873, he left that company and concentrated on manufacturing steel, and that is where Andrew built his fortune.
Andrew’s steel production business was based on efficiency. He sought out and adopted any processes, innovations and procedures that could maintain high quality while reducing costs and streamlining operations. As Andrew’s business grew, he took this cost efficiency even further by purchasing coke-fields and iron-ore deposits so he could become his own supplier for those raw materials. He also purchased ships and railroads to transport the raw materials to his mills, and thus vertically integrated his entire business.
To ensure that his operations would continue smoothly, Andrew took great care in choosing his executive employees. Additionally, in order to ensure that his employees would be more interested in the company’s profits than in their own salaries, Andrew made many of them shareholders who had a direct stake in the company’s success.
Andrew was also an expert in understanding people, effectively directing his employees’ energies into efficient use, and synergistically combining people’s efforts.
Andrew Carnegie accumulated a gigantic fortune through the cooperative efforts of a small group of people numbering not more than a score.
Andrew Carnegie easily dominated the steel business during his active connection with that industry, for the reason that he took advantage of the principle of organized, cooperative effort by surrounding himself with highly specialized financial men, buyers of raw materials, transportation experts, and others whose services were essential to that industry. He organized this group of “co-operators” into what he called a “Master Mind.”
Nearly twenty years ago I interviewed Mr. Carnegie for the purpose of writing a story about him. During the interview I asked him to what he attributed his success. With a merry little twinkle in his eyes he said:
“Young man, before I answer your question will you please define your term ‘success’?”
After waiting until he saw that I was somewhat embarrassed by his request he continued: “By success you have reference to my money, have you not?”
I assured him that money was the term by which most people measured success, and he then said:
“Oh, well; if you wish to know how I got my money—if that is what you call success—Iwill answer your question by saying that we have a master mind here in our business, and that mind is made up of more than a score of people who constitute my personal staff of superintendents and managers and accountants and chemists and other necessary types. No one person in this group is the master mind of which I speak, but the sum total of the minds in the group, coordinated, organized and directed to a definiteend in a spirit of harmonious cooperation is the power that got my money for me.
“No two minds in the group are exactly alike, but each person in the group does the thing that he is supposed to do and he does it better than any other person in the world could do it.”
Perhaps no person was ever associated with Mr. Carnegie who knew him better than did Mr. C. M. Schwab. In the following words Mr. Schwab has very accurately described that “subtle something” in Mr. Carnegie’s personality which enabled him to rise to such stupendous heights.
“I never knew a man with so much imagination, lively intelligence and instinctive comprehension. You sensed that he probed your thoughts and took stock of everything that you had ever done or might do. He seemed to catch at your next word before it was spoken. The play of his mind was dazzling and his habit of close observation gave him a store of knowledge about innumerable matters.
“But his outstanding quality, from so rich an endowment, was the power of inspiring other people. Confidence radiated from him. You might be doubtful about something and discuss the matter with Mr. Carnegie. In a flash he would make you see that it was right and then absolutely believe it; or he might settle your doubts by pointing out its weakness. This quality of attracting others, then spurring them on, arose from his own strength.
“The results of his leadership were remarkable. Never before in history of industry, I imagine, was there a person who, without understanding his business in its working details, making no pretense of technical knowledge concerning steel or engineering, was yet able to build up such an enterprise.
“Mr. Carnegie’s ability to inspire people rested on, something deeper than any faculty of judgment.”
…
[Back to Napoleon Hill’s commentary:] It is obvious that his [Carnegie’s] success was due to his understanding of his own mind and the minds of other people, and not to mere knowledge of the steel business itself.
In time, the Carnegie Steel Company became so well run and cost-efficient, that other steel companies could barely compete with it. Carnegie Steel soon became the dominant force in the US steel industry, and reaped huge profits for Andrew and its other shareholders for many years.
In 1901, Andrew decided to sell Carnegie Steel to JP Morgan’s newly formed United States Steel Corporation for a whopping $250,000,000.
After the sale of Carnegie Steel, Andrew devoted himself to philanthropic work. He funded educational institutions, libraries, theatres, child-welfare centers, cultural institutions, scientific research, international peace-promoting foundations, medical research, law research, and economic research.
There is no use whatsoever in trying to help people who do not help themselves.
Surplus wealth is a sacred trust, which its possessor is bound to administer in his lifetime for the good of the community.
As I grow older, I pay less attention to what people say. I just watch what they do.
The man who acquires the ability to take full possession of his own mind may take possession of anything else to which he justly entitled.
Do not look for approval except for the consciousness of doing your best.
The first man gets the oyster; the second man gets the shell.
A man, to be in business, must be at least owner of the enterprise which he manages and to which he gives his attention, and is chiefly dependent on for his revenues not upon salary but upon its profits.
Men who reach decisions promptly usually have the capacity to move with definiteness of purpose in other circumstances.
I believe the true road to preeminent success in any line is to make yourself master in that line.
Put your eggs in one basket. And watch the basket. That’s the way to make money.
[I] made up my mind to go entirely contrary to the adage not to put all one's eggs in one basket. I determined that the proper policy was "to put all good eggs in one basket and then watch that basket."
No amount of ability is of the slightest avail without honor.
Immense power is acquired by assuring yourself in your secret reveries that you were born to control affairs.
The surest foundation of a manufacturing concern is quality.
The sole purpose of being rich is to give away money.
Whatever your wages are, save a little.