Andrew Carnegie’s name is one of the most well-known in American business. Before becoming one of the world’s wealthiest men with his highest net worth $310 billion (adjusting for inflation) and one of the most charitable philanthropists of his time, Carnegie faced tremendous struggles.
Carnegie was born of meager means in Scotland on November 25, 1835. His family borrowed money from his uncle to immigrate to the United States to find a more prosperous life.
In 1848, Carnegie landed his first job at a cotton mill. He worked 12 hours a day, six days a week, earning a starting wage of $1.20 per week ($39 adjusting for inflation). Carnegie became known as a diligent and hard worker.
Smart, Maybe a Little Dishonest
When Carnegie was drafted into the army to fight in the U.S. Civil War, he paid another man $850 to take his place. Although this seems unethical, it was actually legal: the Conscription Act made specific exemptions for those conscripted on payment of a “commutation” fee.
At just 14-years-old, Carnegie’s mother Margaret mortgaged their home to obtain $500 needed to buy ten shares in the Adam Express Company from Carnegie’s previous boss, who he impressed. The dividends started coming in quickly, eventually helping Carnegie fund a series of other investments. Turns out, buying railroads in real life, not just in Monopoly, rakes in the dough. His hard work, risk-taking spirit, and the success of his investments turned his pity $1.20 a week to $50,000 a year by 30.
Carnegie used the funds from his investments to found the Carnegie Steel Company in 1892. Thanks to revolutionary production methods and his vertical integration strategy, Carnegie dominated the industry. Nearly a decade later, in 1901, he sold Carnegie Steel to banker John Pierpont (J.P) Morgan for $480 million.
In 1889, Carnegie published an essay, “The Gospel of the Wealth,” in the North American Review. He asserted that the rich have “a moral obligation to distribute [their money] in ways that promote the welfare and happiness of the common man.” He resolved: “The man who dies thus rich dies disgraced.”
By his death, Carnegie had donated $445 million of his $475 million personal fortune to charities and philanthropic endeavors. He helped fund more than 2,500 public libraries worldwide and created numerous trusts (charitable foundations) that have established many organizations still in operation today, including Carnegie Music Hall and Carnegie-Mellon University.