In the 19th century, Cornelius Vanderbilt was the richest
man in America, perhaps the richest man on earth. He was
born in poverty, which was not unusual since very few
families had much more than a bed, a roof over their heads
and a meager diet. But, in a way that may have been a
blessing or a curse, he was also born into a family that
believed each person had to work hard and make their own
way.
At fifteen, he started a ferry service, rowing people and
goods on Long Island Sound. His father agreed to rent him
the boat--there were no gifts from father to son! His mother
was so hard-headed, she later foreclosed a mortgage on her
own daughter, repossessing the house when the daughter
became a widow and could no longer make the payments.
I've recently read T. J. Stiles' Pulitzer-winning
biography, "The First Tycoon." I urge you to get it,
read it, and profit from it.
Here are three key lessons from Vanderbilt's life:
1. The distinction between ambition and DESIRE.
Vanderbilt distrusted ambition and ambitious people, while
he valued and nurtured a powerful sense of DESIRE. While
ambition has positive aspects, it also has a dark side.
Ambition has an element of wanting to Be or Become something
or someone other than who we are. Ambitious people are
looking to "move up." They want to be noticed, become
influential or wealthy or famous. Ambition often contains
a willingness to "win" regardless of the consequences.
Vanderbilt achieved and won much--dominating both the
steamship and railroad industries. And yet he always denied
that he was ambitious. He did not want to BE anything or
anyone other that who he was.
Instead he fostered and valued DESIRE. He felt ambition was
born of weakness, while desire came from strength and he
valued that. He had goals that were crystal clear. He
understood the values of patience, good strategy, smart
tactics and effectiveness. He was relentless in pursuit of
the things he DESIRED, but he kept them in perspective.
Getting another railroad might make him richer, but it
would not make him better, smarter, wiser or happier.
He understood this key distinction.
2. He was fundamentally conservative.
Late in life he was asked about the basic flaw in most
business people and the frequent failures and bankruptcies
that resulted. His response was, "I'll tell you what's the
matter...people undertake to do about four times as much
business as they can legitimately (handle).... When I have
some money I buy railroad stock or something else, but I
don't buy them on credit. I pay for what I get." (p. 536)
In the 19th century, stock panics and depressions were
common, and he blamed them on over-reaching, or as Alan
Greenspan famously described it, on "over exuberance."
Vanderbilt hated this. He knew how to bide his time, save
for what he wanted, accumulate stock or other assets and
then use them for strategic benefit. In this sense, he
reminds me of Warren Buffet more than the "day traders" who
speculate on margin, hoping to strike it rich. Like Buffet,
he built enormous wealth over a lifetime. He took risks with
his own money, and he usually won these conservative, well-
thought-out gambles.
3. He knew how to see and seize opportunity.
Vanderbilt rarely sought or grasped for the "next big
thing." But, when an opportunity presented itself, he took
instant action. He new how to recognize an opportunity,
and when he saw one, he had cash readily available and took
immediate action. He bought assets when they were on sale,
then waited for time and the market to make him rich.
Today, we live in troubled economic times. Home prices are
down. The stocks of great companies are on sale, depressed
by general market conditions. In these chaotic markets,
millions of people are laying the foundation and planting
the seeds that will grow into tomorrow's great fortunes. So
should you.
Avoid the lure of great ambition. Instead nurture specific,
actionable desires. Be conservative. Hoard cash. Avoid
credit. Be ready. And, when you see an asset that is under-
priced or in trouble, if it meets your criteria, take
immediate action! Invest! Learn to see and seize opportunity
when it knocks.
Quotes of the Week
"The secret of success in life is for a man to be ready
for his opportunity when it comes." -- Benjamin Disraeli
"Be ready when opportunity comes.... Luck is when
preparation and opportunity meet." -- Roy D. Chapin Jr.
"Change cannot be avoided...change provides the opportunity
for innovation. It gives you the chance to demonstrate your
creativity." -- Felice Jones
"Our main business is not to see what lies dimly at a
distance, but to do what lies clearly at hand." -- Thomas Carlyle
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