How Andrew Carnegie Became The Richest Man In The World

there are but a few men in the history of humanity who have accumulated fortunes like that of Andrew carnegi a man who was as complex as he was rich after selling his company his net worth would equal a staggering 2% of America's GDP in today's video we'll explore how one Scottish immigrant armed with just 5 years of schooling would rise from poverty to the status of the world's richest man this video would not have been possible if it wasn't for our friends at acorns an investment app with over 6 million users that makes investing as

easy as spending acorns rounds up your debit card transactions to the nearest dollar and then automatically invests that spare change for you into a diversified portfolio sign up for acorns using the link in the video description below and they'll deposit $5 into your portfolio that's free money to help you get started with investing so be sure to check them out the link is in the video description below carnegi was at one point the richest American in history but he wasn't born in America Andrew's Story begins across the Atlantic Ocean in dunfermline Scotland where he grew

up in what could only be described as abject poverty his mother would work around the clock sewing shoes his father would make cloth and other material hand weaving looms that was of course until the steam powered Loom came into the picture with weaving technology rapidly improving his father's Loom business would crumble finding himself crushed by the Industrial Revolution watching his father suffer as he begged for work would impact the young carnegi profoundly in 1848 the carnegi set out in search of a better life outside Scotland after selling all of their possessions and borrowing 2020 the

family embarked on their Journey to the land of opportunity America they would restart their lives from scratch in Pittsburgh The Hub of manufacturing but still found themselves un able to escape hardship in their new country his father and mother both struggled to find work leaving Andrew no choice but to drop out of school to support his family he would finally catch a break from the scorching heat of the boiler rooms when he landed a job at a local Telegraph office as a messenger boy he would deliver telegrams by bike all over Pittsburgh he would memorize

the faces of everyone he delivered to so that he could greet them by name if he saw them outside of work it would provide carnegi with a unique opportunity to famili arize himself with the city's business community at 17 he would perfect his Telegraph skills he would grow increasingly skilled at hearing M code impressively he could recite messages without needing to write them down this caught the eye of Thomas Scott a regional manager for the Pennsylvania Railroad Company who hired caragi to be his personal telegrapher and private secretary for the sum of $35 a month

at the time the Pennsylvania Railroad Company was the the largest corporation in the world for the business savvy Cari it was an opportunity like none other a front row seat on how to run a successful business Tom Scott his boss realized cari's potential and decided to take the boy under his wing mentoring him like a second father it would later be Tom's advice to invest in stocks that provided carnegi with his first taste of capitalism fast forward to the American Civil War carnegi is drafted into the union but instead of fighting in the war carnegi

would profit from it he was able to escape Harm's Way after paying $850 for a substitute to take his place on the battlefield it was during this time that carnegi noticed that the wooden bridges were easily burnt by the troops and that there was a desperate need for iron Bridges to replace them he capitalized on the opportunity launching the Keystone Bridge company but it would be his next move that would define him as an astute businessman Keystone didn't just build Bridges they also had their very own Iron Mills which provided the iron that was needed

for constructing the bridges owning the iron Source meant that cari's Bridge Building Company would not be dependent on mining or extracting companies for iron like their competitors this not only gave carnegi more control over the entire process it also improved their margins after the bridge was built he would leverage his Connections in the railroad industry to make money there hair too essentially he was operating a Triad of three companies each strengthening one another first a mining extraction company second a bridge building company which used the iron provided from his mining company and then once the

bridge was built his third business would monetize by selling rail the concept worked to a te always looking for the next big opportunity Andrew set his sights on New York City the Undisputed business capital of the world in the city he expected to find a hustling culture and mingle with other distinguished businessmen but what he found instead was disappointment he would describe the wealthy individuals around him as Scoundrels carnegi wrote a note to himself promising that in 2 years when he turned 35 he would retire and focus on making the world a better place but

this note would go unfulfilled in 1856 a new invention by Henry besser called the bessmer converter a pear-shaped furnace would allow for the mass production of Steel something previously thought to be impossible for the first time ever it would finally become feasible to create large structures from steel eventually giving birth to the first skyscrapers forever transforming a city's Skyline carnegi moved with lightning speed successfully building America's first steel plants in doing so he hired the best engineers and Architects that money could buy he focused maniacally on increasing efficiency all always using the latest technology and

pushing his employees to their maximum physical and mental capabilities he was also notorious for requiring employees to work 364 days a year only allowing for rest on the 4th of July as technology continued to advance he would seek ways to replace his workers with machines at every possible opportunity unlike men machines didn't need sleep they also didn't ask for razors and they certainly did not try to Union carnegi a master salesman decided to name the Venture not carnegi steel but rather J Edgar Thompson steelworks the name of one of his customers in the railroad industry

carnegi hoped to steel mill named after a customer would show his appreciation for their business and maybe even secure more orders from their Railroad and it did the first order from Thompson consisted of 2,000 steel rails naming a mill after a customer was more than a sales gimmick it was part of a larger strategy showing appreciation in public for others acts like this would continue to pay massive dividends throughout the Titans career to help run cari's steel mills he would bring on board a Cutthroat executive known for his ruthlessness and attention to the bottom line

Henry Clay Frick as a team carnegi and Frick were a powerful force to be reckoned with and to show how ruthless the two could be look no farther than the story about Duane works with the help of Frick carnegi spread a rumor which alleged that Duane's Mill was producing defective steel it wasn't true but it didn't matter carnegi claimed to duan's Railroad customers that their rails lacked what he called homogeneity few if anyone actually knew what the word meant but that wasn't important carnegi used the word because it sounded scary enough to frighten off railroads

who were concerned that they weren't getting good products if Duane's sales slowed they would eventually become unprofitable and run out of money to expedite their demise carnegi and Frick would proceed to undercut Duan on price further squeezing the company within 2 years Duane's finances were in Ruins leaving it no other choice than to sell to none other than carnegi at a bargain price for Frick and carnegi the Rules of Engagement were clear do whatever it takes to win but this ruthlessness came with a hefty price as they would soon Discover at one of their largest

steel plants in Homestead Pennsylvania carnegi had just invested millions of dollars optimizing the efficiency of Homestead enabling it to produce more steel than any other Mill comparable to its size but there was another part of the profit machine that was yet to be optimized labor costs this posed a problem for caragi who had been working on rebranding His image from an oppressive steel factory billionaire to a champion of workers rights so instead instead of risking his reputation he would have his right-hand Lieutenant Henry Frick execute the Dirty Work meanwhile carnegi would distance himself traveling abroad

to his home country of Scotland carnegi knew that he wouldn't want to be around the plant after cutting wages for 10,000 already frustrated lowp paid workers in 1892 tensions between workers and Mill owners were particularly heightened after an Ever widening wealth Gap continued to grow the richest people in America were accumulating Fortune faster than at any time in American history meanwhile workers felt that they were property of the Rich and that their shrinking voice could only be heard through a union to make things even worse Frick who took his orders from carnegi demanded increased factory

production which would mean even more hours slaving away but to top it all off Frick would not be increasing their income he'd be reducing it longer hours and less pay put Homestead at a boiling point the strikers also demanded safer working conditions and for a good reason in 1898 9% of All Steel Workers industrywide would die on the job when the workers refused Frick's aggressive demands for longer hours and less pay he decided to lock out all employees and bring in a substitute group of immigrant workers who would be willing to do their dangerous jobs

for Less to escort the immigrant workers as they made their way to the factory Frick called on a 300 person Army For Hire called the pinkertons armed with rifles they made their way to the factory where they were met by 10,000 angry Strikers refusing to give up what they called home historians don't know who fired the first gunshot but what we do know is that the day would no longer be called The Homestead Strike but rather the homestead Massacre by the end of the battle nine Factory workers and seven pinkertons would be dead hundreds would

be injured the fighting was so extreme that the governor ordered for 8,000 militia troops to provide backup under the protection of the state's troops the factory would be reopened and unfortunately for cari's workers they would be returning with lower pay longer working hours and the same safety conditions another collateral damage from homestead came in the form of cari's reputation prior to the tragedies at Homestead he would often advocate in public for better conditions in steel mills and increased wages but these words were far from a with his actions hypocrisy was incredibly prevalent while he preached

increased wages and improved safety conditions he was simultaneously reducing labor costs by slashing paychecks and doing little if anything to make his factories a safer place to work Cari was widely called a coward for using Frick as his scapegoat not only for the tragedy but for all the other dirty work that he didn't want his name to be associated with but in spite of the tensions and animosity the steel mills continued to to thrive in fact by 1900 the company would produce more steel than the entire nation of Great Britain but in 1901 carnegi grew

tired of the game and wanted to spend time with his wife and daughter financier JP Morgan was a rising competitor in the steel industry and carnegi now nearing 70 became open to the idea of selling the company he'd spent his entire life building carnegi wrote on a scrap of paper what he would be willing to accept Charles Schwab the president of carnegi Steel delivered the offer to Morgan as The Story Goes JP Morgan glanced at the offer and without hesitation accepted it Morgan would buy carnegi steel for $480 million making carnegi the single richest man

in the world at the time carnegi would completely cut ties with his business life and dedicate 100% of himself to serving the world through philanthropy not a single dollar would be left to his family because Andrew had only 5 years of schooling he had a soft spot for libraries which he credits for helping him achieve the financial success he acquired over the course of his life he would donate over 2 and 1 half thousand libraries to cities all around the world but it wasn't all self-promotion he was generous for generosity sake his name was only

displayed on less than 500 of those libraries one example of his generosity is carnegi Hall one of New York's most recognizable landmarks built in 1891 carnegi built and donated the building as the Music Hall but its original name of the Music Hall was only changed to the current version after his death and not by his request but through the music Halls board members and from 1901 until his death in 1919 in lanox Massachusetts cari's full-time job was giving away the vast wealth he had built up for himself as we mentioned at the beginning of this

story carnegi was a man who was as complex as he was rich did he employ abusive labor techniques to keep his factories producing maximum profit yes was he hypocritical of course did he make up slander to put his competitors out of business absolutely while these things are all true cari's philanthropic impact is also equally great perplexing to say the least how can a man commit such sins and then become a saint perhaps he viewed donating his money as a way to atone for his business sins making money is a great feeling but an even better

feeling is giving it away if you want to grow wealth and perhaps donate to Noble cuses like carnegi did be sure to download the acor app imagine if you could make investments every time you swiped your debit card that's acorns the app automatically rounds up your transactions to the nearest dollar and then invests that spare change for you into a diversified portfolio in other words just spend money like you normally do and acorns will automatically invest for you in the background but but here's the best part we've teamed up with acorns to provide all business

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so you don't have to worry about choosing the right Investments or timing the markets so be sure to check out the app by using the link in the video description below and thank you for watching this video If you enjoyed be sure to hit the like button and subscribe once subscribed click on the Bell icon and you'll be notified each time we upload new videos until next time stay smart