How Did Andrew Carnegie Make His Money?

By the time he turned 35, Andrew Carnegie would become one of the wealthiest people in history. He gave away about 90% of his wealth before his death in 1919.

Who Was Andrew Carnegie?

Andrew Carnegie was a 19th-century industrialist. He was born in Scotland but moved to the United States in 1948.

At the time, the Carnegie’s small business was failing and Scotland’s residents faced starvation similar to those in Ireland.

The family relocated to Pittsburgh, Pennsylvania when Andrew Carnegie was 12. He quickly found work as a telegraph messenger and operator.

Carnegie didn’t benefit from much formal education. He was, however, a voracious reader and hard worker. These attributes caught the attention of Pittsburgh’s wealthy elite, who hired him for jobs and let him borrow money for investment opportunities.

The young Carnegie also received some shares in railroad companies. He wisely reinvested the returns to grow his portfolio.

How Did Andrew Carnegie Get Into Business?

Andrew Carnegie got into business just before the Civil War. He had earned the trust and respect of Theodore Tuttle Woodruff, an inventor based in Philadelphia. Carnegie helped broker a deal between Woodruff and George Pullman, who’s best known for inventing the railroad sleeping car.

Soon after, Carnegie began working for Thomas Scott, a railroad executive with enormous influence social, business, and political influence. Working for Scott introduced Carnegie to many of the era’s greatest industrialists. This network proved useful to Carnegie’s growing business ambitions.

In the mid-1860s, Carnegie became an early investor in Columbia Oil Company. As war drove iron and petroleum, companies like Columbia Oil Company became extremely profitable and investors acquired strong returns.

After the Civil War, Carnegie turns his attention to the iron industry to take advantage of the country’s expanding railroad system. He continued to expand his business interests until he had interests in railroads, energy, iron, and other commodities.

By the time Carnegie turned 35, he had enough money that he planned to leave the business world and focus on philanthropy and pursue his educational interests. Eventually, emerging opportunities pulled him back to work. He later built a steel plant, purchased Homestead Steel Works, and formed Carnegie Steel. He sold his company to J.P. Morgan in 1901.

Why Was Andrew Carnegie So Successful?

Andrew Carnegie is one of few people who have managed to build wealth without inheriting considerable money from their families. The quintessential “self-made man,” he worked hard and made smart business decisions. He also benefited from investing in industry during a time of rapid growth.

However, Carnegie didn’t pursue wealth for wealth’s sake. He also spent considerable time distributing his money to charitable causes. He stands out as one of the greatest philanthropists in U.S. history. In fact, he spent most of his last two decades giving away the majority of his fortune.

As a teenager, Carnegie had benefited from access to a private library. He didn’t have much formal education, but he thrived as a self-educated person. He remembered the importance of that library in his later years and spent his money building local libraries for all members of the public.

Many of Carnegie’s philanthropic endeavors now carry his name, including the Carnegie Endowment for International Peace, the Carnegie Hero Fund, Carnegie Mellon University, and Carnegie Museums of Pittsburgh.

He also establishes a trust for the Universities of Scotland, which has helped bright, hard-working students access higher education regardless of their financial backgrounds.

How Did Andrew Carnegie Make His Money?

Andrew Carnegie made his money by investing in commodities critical to the post-Civil War United States.

He made massive amounts from the metal, energy, and transportation sectors as the country built a railroad system that enabled travel and moving supplies to the West. As the U.S. grew, so did Carnegie’s wealth.

What Made Andrew Carnegie the Richest Man in the World?

It’s always challenging to determine how someone became extremely rich. In hindsight, Carnegie obviously profited from his interests in energy and metal during rapid expansion within the United States. Of course, many people invested in similar interests at the time… but they didn’t become nearly as wealthy as him.

Unlike most ultra-wealthy individuals, Andrew Carnegie didn’t come from a prosperous background. His family even had to take money from a relative to leave Scotland and avoid ruin. This may have instilled a rare ethic in Carnegie that helped fuel his success. He worked incredibly hard to stand out from his peers and earn promotions. That caught the attention of the powerful people around him.

Perhaps critically, Carnegie didn’t see financial success as a final goal. Instead, he wanted to use his money to help other people prosper. He also used his influence to push for progressive tax and estate tax laws that shifted money from wealthy people to those struggling to improve themselves.

How Rich Would Carnegie Be Today?

Adjusted for inflation, estimates show that Andrew Carnegie would have a net worth of about $372 billion in 2023 dollars. Some put the amount closer to $400 billion. Either number likely makes him the wealthiest person in modern history.

 

Who Is the No 1 Richest Person Today?

The list of today’s wealthiest people changes slightly according to stock prices and other factors. In July 2023, Bernard Arnault is the number one richest person with $211 billion. Other people who commonly hold the spot include Elon Musk ($180 billion), Jeff Bezos ($114 billion), Larry Ellison ($107 billion), and Warren Buffett ($106 billion).

While these people have astronomical levels of wealth, they pale in comparison to Carnegie’s net worth. Carnegie had nearly twice as much wealth as Arnault and Musk (at the moment) and nearly four times the wealth of Bezos, Ellison, and Buffett.

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