On making money | John D. Rockefeller

Published: 2015
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John D. Rockefeller was an American oil baron and philanthropist who is still considered the richest man in the world ever [2020]. Rockefeller played a key role in the establishment of the American oil industry and defined the structure of modern philanthropy. He became 97 years old and had, in todays value of money, a net worth of  $400bn, compared to the current number one, Jeff Bezoz, with just over $180bn.

“The way to make money is to buy when blood is running the streets”

EARLY IN THE OIL INDUSTRY. Rockefeller was born in 1839 into a simple working-class family in the state of New York. His professional career began as a treasurer and accountant. In 1859, when Rockefeller was 20, the first oil well was drilled in Titusville, Pennsylvania. A few years later, Rockefeller joined two partners in the oil refining industry. During the 1860s, the business developed and Rockefeller bought out his partners. In 1870, he founded Standard Oil, which he would in the coming decades would develop into the world’s largest and most profitable company.

THE FIRST 40 YEARS – AN OIL BARON. Through agreements with several railway operators (which formed a cartel and gave Rockefeller the best deal on the market), Standard Oil soon became the industry’s most profitable player. With the lowest shipping costs, he was able to price out the competitors. He then began to buy up competitor after competitor and in 1872 Standard Oil had absorbed 22 of 26 close competitors. The acquisition process often consisted of Rockefeller showing the owners of the acquisition target his accounts in order to mark that they had no chance. If they did not sell at the offered price, Rockefeller said he would then compete with them, and then buy up their assets cheaply in the bankruptcy auction. Most surrendered and allowed themselves to be acquired. In the end, Standard Oil controlled almost 90% of the US oil market.

THE NEXT 40 YEARS – PHILANTROPHY. Rockefeller’s goal was early on to make as much money as possible and then use it to help humanity as best he could. His philanthropic focus was primarily education and public health. He donated $80m to the University of Chicago in the late 19th century, which has turned a small Baptist school into one of the world’s top universities. With the help of Rockefeller’s financial support, hookworm and yellow fever were also eradicated. At his death in 1937, he had given away half of his fortune.

THE BENEFIT OF THE HILLBILLY. Rockefeller believed that growing up in the big city could be a disadvantage. Those who are born into comfort have a hard time competing with those who have had to fight from day one. He clearly saw how men from the countryside outcompeted those who were born in the city and had rich families.

ABSORB NEGATIVE CRITICISM IN SILENCE. Rockefeller’s policy was to always take criticism in silence and let his actions speak for themselves – over time, this usually led to a fair treatment. As long as no one directly prevented him from going his own way, he was fine with others negative gossip. Well-thought-out and fair criticism, however, he valued and gratefully accepted.

PATIENCE IS A VIRTUE. Rockefeller believed that the most important trait for success is strong perseverance. That quality can trump almost anything. He who patiently performs every day task well, is easy to deal with, constantly tries to develop as well as keeps a straight line through wet and dry will have a successful professional life. Success also comes from using your ears more than your mouth – especially early in your career.

“I admire persistence. It is commendable, especially in young men, and it will win in the end”

WEALTH SHOULD BE A SIDE EFFECT. He who only strives to become rich will not be – the ambition must come from something greater. For Rockefeller, making money was never an end in itself, it was a side effect. He saw a fantastic future for his country and wanted to participate in its development. He had no ambition to become the richest man in the world.

“The road of happiness lies in two simple principles: find what interests you and that you can do well and put your whole soul into it – every bit of energy and ambition and natural ability you have.”

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