How Andrew Carnegie Went From $1.20 a Week to $309 Billion … Then Gave It All Away.
Andrew Carnegie sold his steel company, Carnegie Steel, to J.P. Morgan for $480 million in 1901. According to the Carnegie Corporation, Carnegie’s personal peak wealth was about $380 million, or around $309 billion by today’s standard.For context, Money ran a piece in January about the 10 richest Americans. The top three people on that list — Jeff Bezos, Bill Gates, Warren Buffett — had $290 billion combined.
Carnegie wasn’t always wealthy — or even American. His parents, Will and Margaret Carnegie, sold their belongings in Scotland to come to America when Andrew was 13-years-old. They settled in a suburb of Pittsburgh, living in just two rooms above a weaving shop. Carnegie’s relatives ran the shop, and Will eventually took over, but the business failed.
So Carnegie started working as a bobbin boy in a cotton mill. He worked long hours and earned $1.20 … a week.
The following year, Carnegie worked as a messenger for a telegraph company, and he taught himself to use the equipment. He used those skills to land a job with the Pennsylvania Railroad, a job that would help shape his future. It helped him learn about the railroad industry so that he could identify smart investments — even if he did not yet have the wealth to make those investments.When Thomas A. Scott, Carnegie’s boss at the Pennsylvania Railroad, told him that the Adams Express Company intended to sell 10 shares, Carnegie’s mother was willing to mortgage their house to get the $500 he needed.
After that, Theodore Woodruff approached Carnegie with the idea of sleeping train cars and offered him a share in the Woodruff Sleeping Car Company. In order to invest, Carnegie had to secure another bank loan.
The gamble paid off — two years after investing, Carnegie began to see returns of $5,000 annually. That was more than three times his salary from his job at the Pennsylvania Railroad.
During the Civil War, Pittsburgh became an important place of production for gunboats, cannons and more. Carnegie invested in an oil well that yielded more than $1 million in cash dividends, and he also worked to create a steel rolling mill.
After the war, Carnegie focused his efforts on ironworks, including the Keystone Bridge Works and Union Ironworks. He used his connections to the Pennsylvania Railroad Company management to secure contracts and build tracks across the state.As his wealth grew, Carnegie began to develop the principles of giving that would define his later career. When he was 33, Carnegie wrote a letter to himself, urging himself to live modestly and charitably.Carnegie’s philanthropy
Carnegie was 66 when he sold his company in 1901, retiring 31 years after he had predicted. However, he did spend the rest of his career in philanthropic pursuits. In his most famous piece of writing, The Gospel of Wealth, Carnegie said that “The man who dies thus rich dies disgraced,” and he spent the rest of his life doing his best to live by that.
From 1901 until his death in 1919, Carnegie distributed $350 million to schools, libraries, colleges and other public works, primarily across the English-speaking world. He believed that the best way to spend what he called “excess wealth” was to put it to long-lasting causes for world peace, art and educatiDoubtless, this was inspired by his own childhood, when he attended the Free School in his native Dunfermline, Scotland, which had been given to the town by Adam Rolland, or by his time with Colonel James Anderson, an American who opened his library to local working boys when Carnegie was young.
Yet despite his efforts, Carnegie still died rich. In his will, Carnegie gave $30 million, the bulk of his remaining fortune, to the Carnegie Corporation, which he hoped would help establish international laws and foster world peace.on.