# A taste of capitalism Andrew Carnegie, once a destitute Scottish immigrant, rose to become the richest person in the world. His breakthrough into the world of capitalism came about as the result of an investment opportunity supplied to him by his at the time boss and mentor, Thomas Scott of the Pennsylvania Railroad. Scott allowed Carnegie to invest into a private business which the railroad contracted out to, and after ponying up $500 by mortgaging the house he and his mother owned, Carnegie started to receive a dividend of $10 a month. This may not seem like a lot in today's figures, but it was a tremendous sum back then to the poor Scott who took home a measly $40 a month in full time pay. The first dividend payment young Andrew received transformed his life completely. He immediately understood the power of capital, and got a taste of what we in modernity like to call passive income. The rest is history. But what are some takeaways for us from this story? # Wherever you are now doesn't determine where you can end up We've seen time and time again evidence of people who grew up with nothing turning their lives into something incredible. My own grandfather, Judge Sol Gothard, was born in 1930 to dirt poor immigrants who escaped the Pogroms of Eastern Europe. His mother spoke no English, had no skills, and could barely take care of herself. His father was an abusive alcoholic. Yet my grandpa put himself through high school, often working 3 jobs, then through college, served in the army, and graduated with a masters in social work only to go back to school at night while working to provide for 5 kids and become a lawyer, ultimately a judge and associate professor. At the end of his life, he was recognized by the National Organization of Forensic Social Work for devoting his career to protecting the abused, and they created and awarded him the [Sol Gothard Lifetime Achievement Award](https://www.nofsw.org/sol-gothard-lifetime-award) and made the award a permanent honor which is given annually *henceforth*. Where you are in this moment of your life is not where you have to end up. I'm not saying it's easy to change the direction of your life, only that we've been shown time and time again it is possible. But how can we get there? # Doing great work with and for the right people can be a game changer Another lesson we can learn from the Little Boss, as Carnegie was called, is the power of aligning yourself with the right people early on and doing great work for them to earn their trust. He clawed his way out of *abject* poverty by working in manufacturing facilities as a young teenager and doing good work which he made sure was noticed by other Scottish people in the area he was in. After getting a chance to interview for a messenger position at a local telegraph company, he had finally found his opportunity. Not only did he teach himself how to use the equipment so he could get promoted to telegraph operator when the time was right, but he memorized every street, delivery address, and name of the prominent people about town. He would always greet them and leave his mark, building a network from a young age. This combination of self learning and industriousness so impressed Thomas Scott of the Pennsylvania Railroad, he eventually poached Carnegie from the telegraph company as his personal assistant, and the rest is history. Yet if young Andrew hadn't been rubbing shoulders with the right people and demonstrating his value to the marketplace, those opportunities wouldn't have come along. # The goal of a capitalist should be to have your capital work for you, not the other way around After that first investment *eureka* moment, Carnegie recognized the power of having capital do the heavy lifting and generating income for you independent of the number of hours you worked that day. He constantly reinvested his profits early on in his career, moving into more ventures associated with the railroads, then into oil, iron, and eventually steel. There was no squandering of the funds, it went back to work for him. At which point an individual can truly be considered independent is when that individual does not rely on a paycheck. When the income from your investments is enough to live on AFTER reinvesting a healthy portion, you've made it. This is the goal of every capitalist, since we know our time is limited, but the power of our capital is not. To get to this point is a journey each one of us must undertake on our own, but a few words of wisdom from people much wealthier than myself. 1. Spend less than you make, the bigger the gap the better 2. Save and invest everything you don't spend, the more the better (I try to invest >50% of my total income) 3. Learn how to invest from people who are where you want to be financially, meaning they've done it and there is no disputing that fact (Andrew Carnegie, John D. Rockefeller, Cornelius Vanderbilt, Warren Buffett, Charlie Munger, etc.) 4. Rinse and repeat