Financial success

“ For the last few centuries, commercial ability, financial capacity, knowledge of how to manipulate men and measures in a way to increase fortune, and so to secure more of what fortune will buy, have been more and more appreciated, until to-day aristocracy and royalty clip coupons, families whose ancestors trace from the Conqueror invest in stocks and draw dividends, and the bluest blooded of all great families engage with avidity in the struggle for business and wealth. ”

“ The economic financial incubuses you have created now control your lives, from the day of your conception, until long after your death. With your money they directly control your most essential industries; and indirectly hold ownership through their loans, and mortgages, of your business, your homes, farms, stock, lands. ”

“ And I believe we need a strong and vibrant financial sector so that businesses can get loans; families can afford mortgages; entrepreneurs can find the capital to start a new company, sell a new product, offer a new service. ”

“ So plausible was everything made to appear, that men of commercially acquired fortune, of the greatest experience, and of long-tried judgment, invested their capital in the fullest confidence of success. ”

“ Then, too, the subtle process by which the man satisfies himself that he can afford to buy. Talk of Wall Street and financiering! No subtle manager or broker ever saw through a maze of financial embarrassments half so quick as a poor book-buyer sees his way clear to pay for what he must have. ”

“ Without going into shades of encyclopedic meaning, I would define, for the purpose of this discussion, a financier as a man who has some recognized relation and responsibility toward the larger monetary affairs of the public, either by administering deposits and loaning funds or by being a wholesale or retail distributor of securities.
To all such the confidence of the financial community, which naturally knows them best, and of the investing public is absolutely vital. Without it, they simply cannot live. ”

“ But questions as to what constitutes a profit, whether all profits are applicable to dividends, the proper treatment of capital profits, the relation of capital losses to profits and dividends, the differentiation of the classes of reserves, and finally the manner of showing and explaining the periodic changes in net worth by means of the supplementary statement of profit and loss—all these and other similar questions are closely related to the problem of valuation and, as indicative of the financial policy of a business, may directly affect all going concern values. ”

“ I believe in the future of this country, in its latent wealth and its possibilities, and I am prepared to take on the town's uncompleted enterprise and assume its one hundred and thirty thousand dollars of liability. Gentlemen, what I have in mind goes further than any of you have ever imagined, and it needs more millions than you have conceived. Millions will be forthcoming. In the financial markets of the world, capital must be assured of certain fundamentals. These fundamentals established, there is no difficulty whatever in securing as much money as may be required. ”

“ Is it for the best financial interest of the company to borrow on short or long time, to create a floating or a funded debt, etc.—these points require consideration and can, of course, be answered only in the light of the conditions prevailing in each case as to the status of the working capital requirements. ”

“ The typical country newspaper groans under a load of debt and seldom gets a fair show to succeed; but in this case there will be no lack of money, and—why, that settles the question, I think. Money is the keystone to success. ”

“ So this financial reform refocuses the financial sector on what’s really important: getting capital to entrepreneurs who want to grow their businesses, and financing to millions of families who want to buy a house or send their kids to college. ”

“ For why should a man be saving, whose success depends, not on frugality, but on a ‘successful hit’? and who, in a single speculation, may lose the savings of years?”
“That is a fact,” observed my friend. “How many of the gentlemen that dined with us to-day do you think are possessed of real property? Not one-third of them. And yet they are all ‘young, respectable merchants,’ as a certain New York paper calls them, doing ‘a handsome business’ on a borrowed capital. ”

“ Anyone who reviews the figures of the material growth and prosperity of the nation and the rise of its financial power will be forced to the conclusion that no act that was fundamentally unsound could have been an integral part of the achievement of such a notable record. ”

“ You have read the enticing overstatements in your newspapers, financial papers, and company reports, you have listened to professional tipsters, financial wizards, or your bank's financial expert and adviser offering you a lifetime opportunity to purchase investments supposed to pay good interest and dividends. ”

“ Into the rigging and launching of almost every big financial operation in the United States during the last twenty years, double-dealing, sharp practice, and jobbery have entered; and, what is more, the men interested have participated in and profited thereby. ”

“ Wealth will not necessarily procure a membership in this great financial emporium. The applicant must be a person of good repute. It numbers men of great wealth, men of a high order of talent, men of scholarly tastes, connoisseurs in art, students of science, literature and philosophy, and men capable of standing at the helm and giving direction to vast enterprises in the domain of finance and commerce. ”

“ And so it goes in every business but finance—finance, the most important of all, the business into which is merged all other businesses, the business of taking and preserving the results of all other businesses, of all other human endeavor. ”

“ What are the considerations to be observed by a man in deciding whether or not he should adopt money-making—that is, the acquisition of a surplus beyond his current needs—as one of his definite aims in life? ”

“ At least you will find the history of a colossal business affair involving millions of dollars and manned by the financial leaders of the moment. It is a fair representation of financial methods and commercial morals as they exist in America at the beginning of the twentieth century. As a contemporary document the narrative should have value ”

“ Never before in the history of finance had it been made possible for men of modest means to further a charitable work, a noble work, a work appealing to all the highest aspirations of humanity and creditable to every finest instinct of the human heart, and at the same time to reap an enormous profit! And the price was only twenty-five dollars a share—while they lasted! ”

“ Confronted with the double problem thus outlined, what measure of success has attended the average business man in its solution?
It is safe to say that the average man has found it easier to make money than to take care of it. Money-making, for him, is the result of successful activity in his own line of business, with which he is thoroughly familiar; while the investment of money is a thing apart from his business, with which he is not familiar, [10] and of which he may have had little practical experience. ”

“ Gifts of all kinds, expenses of all kinds, outgo of every description, must come from new sources of revenue; my fortune and its income and the surplus over the previous year’s outgo must be treated as a sacred fund of which I was merely the trustee. That rule has put me often in straits, has forced me to many money-making measures [134] that in the narrow view would be called relentless. But to it the world owes my highest achievements, as a financier and industrial leader, and to it I owe the bulk of my fortune.
The brain earns in vain, however hugely, if the hands do not hoard ”

“ In my written delineations of character I furnish every applicant with a careful analysis of his business adaptation, showing the exact condition of his financial instincts, as well as all others. I have also composed directions whereby deficient organs may be strengthened by special mental exercises, and I claim that the financial sense can be developed and strengthened as well as any other part of man’s nature ”

“ By means of cash payment or stock bonuses, he is induced to work better and to be more careful of tools and machinery, while his expectation of a share in the success of the business stimulates his interest and his energy and keeps him better natured. ”

“ The past forty-five years in the United States embrace a new era of wealth—an era in which the accumulation of vast amounts of money, or its equivalent, in individual and corporate hands, has accompanied the most marvelous national growth and prosperity in all history. ”

“ Special attention will be paid to the requirements of a business surplus and of the private investor. In the field of private [22] investment two distinct classes can be recognized—those who are dependent upon income from investments and those who are not. Both classes will be considered. For the investment of a business surplus, safety, convertibility, and stability of price are the qualities to be emphasized; for investors dependent upon income, safety and a high return; and for those not dependent upon income, a high return and prospect of appreciation in value. ”

“ Economy in personal and family expenditures was the text from which the lesson was drawn.
In my prosperous days when I made large annual profits, I did not realize how foolishly extravagant was my scale of living, for every year I was adding a handsome amount to my accumulations which were steadily increasing, and yet, looked at from the standpoint of this clear-headed, successful business man, I was expending far more than what should have been regarded as my income. ”

“ The distribution of provisions, money, and merchandise in just proportions, according to times and places, is the true secret of finance and the source of wealth, provided those who administer it have foresight enough to suffer a present apparent loss, in order really to obtain immense profits in the future. ”

“ I, says debt stock, encourage industry, by taking way your money; and I, says bank stock, by pouring money into your pockets. When, by theory or experience, has it ever been said, that either the redundancy of money, or the loss of earnings, was an encouragement to industry? If the calculation of a false opinion, that industry enjoys her own earnings, is the best mode to which all orders, titled or stock, can resort for her encouragement, it is evident that the mode would be improved, by making the opinion true. Fulfilment would be a stronger excitement to industry, than disappointed hope. ”

“ As capital was of the utmost importance to my success in business, I decided not to increase the foregoing scale until I had acquired a certain capital, after which I would give one quarter of all net profits, great or small, and, on the acquisition of another certain amount of capital, I decided to give half, and, on acquiring what I determined would be a full sufficiency of capital, then to give the whole of my net profits. ”

“ In closing, let us note that financial imagination does not always have as its goal the enriching of an individual or of a closely limited group of associates: it can aim higher, act on greater masses, address itself strenuously to a problem as complex as the reformation of the finances of a powerful state. All the civilized nations count in their history men who imagined a financial system and succeeded, with various fortunes, in making it prevail. ”

“ It has already been shown that capital, saved by thrifty folk, is essential to industry as society is at present built and worked; and the financiers are the people who see to the management of these savings, their collection into the great reservoir of the money market, and their placing at the disposal of industry. ”

“ My money is invested in various ways. Besides the ordinary forms of investment, stocks, bonds, and mortgages, I have set up two or three young men, whom I thought worthy, in business, and require them to send in monthly statements of their business to me. ”

“ And in so far as the apparent prosperity is caused by an unusual plentifulness of loanable capital and a consequent rise in prices, that prosperity is not only liable to reaction, but certain to be exposed to reaction. ”

“ Some of his own holdings were imperilled, and the man was working like some high-geared, delicate, strong machine—strung to full tension, going at full speed, accurate, never hesitating, with the proper word and decision and act ready and prompt as clockwork. Stocks and bonds, loans and mortgages, margins and securities—here was a world of finance, and there was no room in it for the human world or the world of nature. ”

“ Finance means promoting and facilitating the country's trade at home and abroad, creating new wealth, making new jobs for workmen.
It means continuous study of the conditions prevailing throughout the world. It means daring and imagination combined with care and foresight and integrity, and hard, wearing work—much of it not compensated, because of every ten propositions submitted to the scrutiny or evolved by the brain of the financier who is duly careful of his reputation and conscious of his responsibility to the public, it is safe to say that not more than three materialize. ”

“ If any of the Friends was prepared to offer him a better investment of his money than one that could be realised at a profit of 200 per cent, he was ready to alter the existing disposal of his capital. ”

“ When the treatment of a man's business surplus is spoken of as an investment problem, it is meant, of course, not his working capital, which should be kept in liquid form for immediate needs, but that portion of his surplus which is set aside for emergencies. ”

“ Opportunities for the investment of small savings at low interest are not lacking, but [Pg 376] the great fortunes overtower the little ones, securing the great profits and great political and economic power. ”

“ Finance means constructive work. It means mobilizing and organizing the wealth of the country so that the scattered monetary resources of the individuals may be united and guided into a mighty current of fruitful co-operation—a hundredfold, nay ten-thousandfold as potent as they would or could be in individual hands. ”