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When the young John D. Rockefeller looked up to his father as a kid he might not have
seen much to admire, but it was his pop’s sketchy nature that could have been the catalyst
to John becoming insanely wealthy.
His father once said, “I cheat my boys every chance I get.
I want to make 'em sharp.”
This man, who travelled around the USA selling what we might call “snake oil” to cure
diseases, was a scammer at heart and didn’t always put money on the table after his long
trips.
For that reason John’s mother always told her son to work hard and save, and that he
did to the extent of him becoming synonymous with making money.
In fact, he would become the first billionaire ever in the U.S., but how did he get there?
John D. Rockefeller was born July 8, 1839, in New York state.
His parents were William Avery Rockefeller and Eliza Davison, and his father would go
by the name of Bill.
Bill didn’t really embrace the whole morality idea, and when he wasn’t running around
the country selling elixirs to cure diseases he was seeing his many girlfriends.
Young John at the time was brought up mostly by his mother, a devout Christian who was
pretty much the polar opposite of her spouse.
In fact, the father was so notorious for his shady line of work that he got the name “Devil
Bill”, and while his pop’s ability to graft in the face of adversity might have
run through John’s blood, it was his mother’s devotion to saving money that John embraced.
His father taught him how to sell something not so good and make it sound great, while
his mother taught him to save that cash and then invest it and turn it into more cash.
This is how he became the richest person of all time if you compare what he had then to
the economy at large.
John was said to be good in school, but as his father was often away doing what he did,
he also had to make money for his family.
By the time he was 12 he had saved his first $50 from selling turkeys.
The year was 1851.
That might not sound like much to you, but if we look at inflation calculators we are
told that in 2019 that would be worth $1,667.
Not bad for a 12 year old.
His mother then told the young man to loan that cash out, which he did to a local farmer
with an interest rate of seven percent.
A year later and John was repaid the amount plus the interest.
It was then that he realized he could make a lot more cash if he was smart.
He later said about this first loan of his, “The impression was gaining ground with
me that it was a good thing to let the money be my servant and not make myself a slave
to the money.”
The family moved to Ohio a couple of years later and John did his schooling, performing
well.
He later went to college and learned such things as bookkeeping, commercial history,
banking, and currency exchange.
All the time his father was explaining to him how to sell and his mother was inculcating
in him how to be smart with the money.
It’s not surprising then that John’s first job was as an accountant’s clerk, because
dealing with cash was already second nature to him.
He was just 16 years old, but always dressed like an aged man in dark suits and dark ties.
He impressed everyone around him, working hard and being serious.
He even impressed in the debt-collecting department because he always seemed to be able to get
the money back to the firm.
For that reason he kept getting raises.
When still in the probation period he was paid 16 bucks for his entire three-months
of training, but then he was paid 31 bucks a month, which was soon raised to $50 and
then $58 dollars a month, which was quite a lot of money at the time.
John Rockefeller had one ambition, and that was to make a ton of cash.
When still in his teens he said his plan was to live until a very old age and also make
at least $100,000.
If we take it that he said that when he was 18, it was about three million dollars in
today’s money.
That is very ambitious, but John would do that and then hit the ball out of the park.
He would also get his wish to live a long time, only dying was he was two years shy
of a century.
At age 20 he had saved $800, which today would be worth almost $25,000.
He wanted to invest in a company but that wasn’t enough cash, so he managed to wrangle
another $1,000 from his father, who must have been doing well at the time because that’s
over $30,000 in today’s cash.
His father being the man he was told John there would be interest on that loan to the
tune of 10 percent.
Of course he paid his father back, because back then it seemed every venture John went
into made him money.
His business partnership did well, with profits in the first year being $4,400 and in the
second year being $17,000.
In today’s cash that’s $136,000 and $496,000.
This wasn’t just his as he had those partners, but now he had cash to further invest.
The Civil War then broke out, and as you know, war can make some people a lot of money.
Soldiers need food and clothes and weapons, and the Union needed all sorts of supplies,
which made John and his company Clark and Rockefeller a ton of money.
He got into the refined oil business, and this made him and lots of oil prospectors
insane amounts of cash.
If there was blood on John’s hands he wasn’t concerned, because he was on the good side
he believed, the Unionists, and anyway he just thought he was a moral man outsmarting
others.
We should say a lot of people didn’t think that way because oil drilling was messy business.
It was polluting the environment.
In 1865 business was booming.
John and his partners were doing a better job than other oil men, building more efficient
refineries and so able to undercut their rivals.
That year John bought out his partners for $72,500, which is over one million dollars
today.
This was the deal that really made the man rich.
Rockefeller not only made a lot of money, but he borrowed and then wisely reinvested.
Just three years after he did the buy-out he created an oil refinery in New York which
at the time was the largest of its kind in the world.
The Standard Oil refinery company would soon start buying all its competitors.
What he was creating was a monopoly, and while he was accused of running all the little men
out of business, he would tell himself that he was doing them a favor as they would fail
anyway.
He actually called himself an “angel of mercy.”
This so-called angel by the end of the 1870s was already incredibly rich, producing around
90 percent of the oil used in the USA.
It’s said he was worth around 26 million in today’s money by the end of the decade.
But he wasn’t done, not by a long way.
You see, oil had to be moved around.
The traditional way of doing that was by train, but Rockefeller had underground pipes in mind
and so got to work building them.
This created fierce competition from anyone who was working in the railroad, but John
prevailed.
In the 1880s Standard was accused of being too big and also having some shady business
practices, but John saw it as healthy practice even if he had monopolized the oil business.
He believed business was merely a game played and the fittest survived.
The New York Times didn’t see it as healthy at all, stating that Standard Oil was “the
most cruel, impudent, pitiless, and grasping monopoly that ever fastened upon a country.”
At one point in that decade Standard Oil employed over 100,000 employees, 20,000 domestic wells,
4,000 miles of pipeline and 5,000 tank cars.
He made even more cash when automobiles came onto the scene because then he began producing
the gasoline for the cars.
Having expanded into steel, too, his businesses and wealth just kept growing.
In 1902 it’s written that he had made a whopping 58 million from investments, which
today would be over $1.7 billion.
But he still wasn’t done with making money.
Being this rich got him a lot of attention of course, and much of that was the negative
kind.
He was seen as being unscrupulous, much like his father Devil Bill.
The conclusion to this in 1911 was Standard Oil being charged with antitrust practices,
which means being so big you take all the other players out of the market.
After that, Standard had to be broken up into lots of small companies.
You might have heard of some of the names of those smaller businesses, such as Esson
or Mobil.
Before that breakup, Rockefeller of course was a main shareholder and it’s said he
sold a lot of his 25% of Standard's stock.
After this move it’s said he was worth about $900 million, which if we put that through
an inflation calculator would be 320 billion.
All this making money was said to take a toll on the health of Rockefeller and it’s said
that throughout his life he suffered from bouts of anxiety and depression.
He also had a wife and five kids, so he had a busy home life, too.
It’s said he got so sick from stress that all his hair fell out, and much of his life
he wore wigs on his head.
In later years when he stepped back from making cash his health improved.
Once he had made his fortune much of his time was dedicated to philanthropy, and he gave
away a lot of cash to promote advances in medicine, science, education and the arts.
He created the Rockefeller Foundation in 1913, and it’s said he put $250 million into that.
He did this over a period of time, but if we see how much that is worth now it’s something
like $60 billion, which is a fair bit of money to give away.
He has always been a controversial figure even if he did do his bit for the common good,
with many of his detractors saying he was relentless and cruel, so greedy that he destroyed
many on his way to dominance.
Others say he had a good side, but we sometimes overlook that.
As one writer said, “What makes him problematic—and why he continues to inspire ambivalent reactions—is
that his good side was every bit as good as his bad side was bad.
Seldom has history produced such a contradictory figure.”
So, how much did he have when he was at his richest?
This is what the New York Times wrote in his obituary:
“It was estimated after Mr. Rockefeller retired from business that he had accumulated
close to $1,500,000,000 out of the earnings of the Standard Oil trust and out of his other
investments.
This was probably the greatest amount of wealth that any private citizen had ever been able
to accumulate by his own efforts.”
So much of his cash was tied up, and it’s hard to say exactly how much he had.
Still, at the time of his death in 1937 some people estimate his fortune was about $402
billion in today’s money.
This was a significant slice of the U.S. GDP and would make him the richest man that ever
lived in modern times.
Some sources, though, say he might have only accumulated around half of that amount.
We’ll now leave you with a poem he wrote when he was 86 years old:
“I was early taught to work as well as play, My life has been one long, happy holiday;
Full of work and full of play— I dropped the worry on the way—
And God was good to me every day.”
While we don’t totally disagree with the sentiment behind Mr. Rockefeller’s poem,
maybe it was a bit easier to be worry free in the early 20th century before we were constantly
faced with the threat of online attacks.
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What would you do with the equivalent of 400 billion dollars?
Buy your own island?
What about an entire country?
Tell us in the comments.
Now go watch “How Jeff Bezos Gets His Money From Amazon.”
Thanks for watching, and as always, don’t forget to like, share and subscribe.
See you next time.