PART 1: The road to business success
In this book Andrew Carnegie started by advising young people who want to be successful in life to avoid these 3 things:
- Alcohol: as it will destroy them and not allow them reach their dreams.
- Speculations or gambling: Gambling can make you rich today, but you would never be able to sustain the wealth. Instead of speculating, start a business that is providing solutions to the problems of other human beings. Starting a business may be hard, but it is a sure way to sustainable and enduring wealth. Money gotten from speculations doesn’t last. Most time, the person loses all to gambling.
- Don’t stand as a guarantor for a friend if you are also a debtor to another person. If you are to stand as a guarantor for a loan, never let the amount exceed your own means. Treat the money you are standing as a surety for as a gift and do not stand for an amount you cannot part with.
If you want to be taken serious in your place of work, do all you can attract your employer’s ATTENTION. Prove to your boss that he does not have a mere hireling in his employ.
Instead of being one who is content to give so many hours of work for so many dollars in return, be the one who devotes his spare hours in constant thought to the business – this will make your boss to think of you first when he is thinking of a worthy partner.
Always break orders to save your boss. Do not hesitate to do it whenever you are sure the interests of your employer will be thereby promoted and when you are so sure that the result is such that you are willing to take the responsibility.
You will never be a partner unless you know the business of your department far better than the owners possibly can. These are the kind of men business owners are looking to help their business grow.
People who have the interest of the business at heart and will do all they can including disobeying rules they know are not in the interest of the business to make the business grow.
These are the true bosses. So, boss your boss and do this early enough.
To become a millionaire, you must start early to save most of the money that enters your hand. The money you have saved must them be invested in something that will yield you more money and never to be gambled with.
This habit of putting away money will attract business men (who are willing to go into partnership) to you. They will trust and want to partner with you because you have developed discipline which is a great habit for creating wealth.
When you start a business, concentrate all your efforts and resources in the business. Don’t scatter your resources in several businesses at a time. Put all your eggs in one basket and watch the basket closely.
PART 2: The ABC of Money
Money as we know it today are just worthless papers and do not reflect the value of what the government institutions printed on them and would like you to believe.
A medium of exchange is supposed to be equivalent to the value it is to be exchanged with in value, but this is no longer so.
The government institutions print notes and make us believe that those notes are of the same value as what is printed on them.
The governments are shortchanging their citizens with the instrument of money.
PART 3: Interest of Labour and Capital
Employers should embark on corporate responsibility to maintain to some extent the old feeling of kindliness, mutual confidence, respect and esteem which formerly distinguished the relations between the employer and his men.
Wages of employees should be based upon a sliding scale, in proportion to the net profit received for product month by month. This way employees would not be seeking to make more money when the business is not doing so well and when the business is doing well, everybody gets paid well.
This can be achieved by making your business’ financial statements available to employees.
This way, the employees and the employers work as partners working towards the growth of the business as they know when a business is doing well and when a business is doing badly.
An employee that knows that the growth of the business is equal to more money for her will work hard to ensure the business grows.
Make reading a habit and focus on specializing on an area which gives you support; know that thoroughly and well, to be an expert in your area of specialty. If you are a mechanic, then study every work about the subject of mechanics.
Seek to be among the world first 10 people in your area of work.
Don’t let anyone know more of your specialty than you. Then read widely, seek to know little about every other thing. “Just as on his farm the farmer must first attend well to his potatoes and his corn and his wheat, from which he derives his revenue, and he may spend his spare hours as a labour of love in cultivating the flowers that surround his home.”
Becoming a specialist in the work that brings you revenue is your number one priority, while acquiring general knowledge in other areas is your recreation and also important.
This is how an employee moves from the level of a worker to the partner of the employer.
Learn everything you can about the fundamental laws of demand and supply, the law of competition
Know when to take a break and find amusement. Engage in sports or other games as it is a great mistake to think that the man who works all the time wins in the race. Become interested in baseball or cricket, or horses, anything that will give you innocent enjoyment and relieve you from the usual strain.
You are not to consume every earning that you make. You must consistently save a part of all money you earn to be used for the purpose of investment in building capital projects that will give you more returns. This is the difference between the rich (civilized) and the poor (savage). One saves a part of his earnings for the purpose of investment while the other consumes everything earned.
“Each man, by thrift, saves a little, puts the money in a bank, and the bank lends it to the shipbuilders, who pay interest for the use of it.”
The amount you should save per earning does not need to be great, just ensure you are saving something for future investments or projects whenever you earn money.
Keep money in the position of a useful servant. Hoarding millions is not thrift. It should be used to make the world a better place. Always seek to leave the world better than you found it.
PART 4 How to win fortune
“The millionaires who are in active control started as poor boys, and were trained in that sternest but most efficient of all schools—poverty.“ Most of these people did not go to the regular schools, but where instead hotly engaged in the school of experience (started actively working from age 14-20), obtaining the very knowledge required for future triumphs in business.
Andrew Carnegie saw college as a waste of time as it does not confer on the student the required skill and experience necessary for running a business.
The graduates who enter the world of work at the age of 20 mostly fit the position of workers who are compensated with salary and do not stand a chance to compete with the people who have been working and gathering business experience since the age of 14.
Education is good, but the education that should be valued is only the one that leads a man to the road that will bring him the desired fortune.
Businesses of vast concerns cannot be successfully conducted by salaried employees. No great business of any kind can score an unusually brilliant and permanent success which is not in the hands of practical men particularly interested in its results as against men who are just interested in receiving salaries.
When, therefore, the young man, in any position or in any business, explains and complains that he has not opportunity to prove his ability and to rise to partnership, the old answer suffices “The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings.
PART 5: Wealth and its uses
Andrew Carnegie is of the opinion that poverty is a stimulating school that takes ordinary people from the ground to greatness. He believes that being born poor is one of the greatest things that can happen to anyone unlike being born with a silver spoon.
“We can scarcely read one among the few “immortal names that were not born to die, ” or who has rendered exceptional service to our race, who had not the advantage of being cradled, nursed, and reared in the stimulating school of poverty.”
He admonishes people who have amassed fortune not to make their children victim of their wealth by over pampering them. They should instead make them go out and create their own wealth and not depend on their parent’s wealth.
Anyone who was born poor is regarded by Andrew Carnegie as fortunate. All he needs to do is to find wealth is to first ask himself “what shall I learn to do for the community which will bring me in exchange enough wealth to feed, clothe, lodge, and keep me independent of charitable aid from others?”
Then the next thing he is to do once he starts earning from his choice of means of income, is to start saving a portion of all his earnings to be invested in securities, properties or business.
You do not need to put together so much money before you can start investing. Save from your earnings, invest them and watch it gradually grow and make you rich. If you are able to save as little as $50 or $100, you can start a business or start investing in stocks (own a part of a big business), real estate etc.
So, you don’t need to have up to a million to start. Anyone can start growing money. All you need is that first $50 or $100.
Don’t invest your savings in any business or stock you don’t understand. This is the one of the reasons most businesses fail.
And when you have accumulated so much wealth, distribute for the good of humanity to make the life of others better while you are still alive by building institutions or creating innovative developments that will last for generations.
Andrew Carnegie describes any rich person who was not able to distribute his/her wealth for the good and the advancement of humanity while alive as a sad failure.
PART 6: The Bugaboo of Trusts
All industries should hold firmly the doctrine of free competition and keep the field open for all who are interested. There should be freedom for all to engage in manufacturing or any business as long as the person has the capital to invest in the same condition open to all.
Any attempt to maintain a monopoly in any branch/industry will likely end in failure for there can be no permanent extortion of profit beyond the average return from capital.
Monopoly in the form of TRUST strangles the growth of an industry while healthy competition helps it to grow and benefit the public.
PART 7: Anglo-American Trade Relations
The principle of free trade should be allowed by nations as the world respects a nation that can supply it with its needs.
This principle of free trade does not respect flags; it respects best bargain as nations buy from and sell to countries from which they obtain great bargains. Political acquisition is not essential for acquiring the trade of new territory.
PART 8: Business
Focus on one kind of business and master it. Don’t jump from business to business. Concentrate all your efforts and resources in one for no one can master two businesses. You will end up spreading yourself too thin and lose both businesses.
The difference between a business person and a worker is that the first depends on profit while the second depends on a fixed salary. The business person bears all the risks and makes more money while the worker bears no risk and earns so little, but we must all start from somewhere. You can start as workers but never stop there.
While working for your boss, do not work for salary alone. Do all you can to help grow the business of your employer; go the extra mile. And when he is looking for a partner, you will be the first person that comes to mind. This will be your beginning of owning part of the business.
Here is a secret to business success: conduct your business with just a little more ability than the average man in your line. If you are only above the average, your success is secured, and the degree of success is in ratio to the greater degree of ability and attention which you give above the average.
There are always a few in business who stand near the top, but, there are always an infinitely greater number at and near the bottom. And should you fail to ascend, the fault is not in your stars, but in yourselves.
Anyone who intends to acquire a degree should ensure that as he/she is getting the degree gets business skills too in the area he intends to focus on. A graduate who also has business knowledge is far better than a person who never got a degree but acquired only business skills.
A business creates value and benefits the community by improving their lives, while speculation does not provide any value and supplies no want.
PART 9: The three legged stool of business
Capital, labour and business ability are the three legs upon which any business stands. Without any of these three, the stool of a business collapses for a business cannot succeed without any of these three and the stool becomes of no use until the 3rd leg is restored.
None of the three legs is more important than the other. The three are equal partners of a grand role.
