GENIUS #2: Jakob Fugger
A study on Jakob Fugger, known for being the world's richest person ever
Welcome to this edition of GENIUS: a study on the top intellectuals and creatives from modern history. In today’s newsletter, we’re profiling Jakob Fugger, a wealthy businessman, banker, and merchant considered to have been the world’s richest person.
Jakob Fugger
1459 - 1525
Background:
Jakob Fugger, considered to be one of the richest men in history, was a German merchant, mining entrepreneur, and banker. He expanded his family’s local textile business into a global conglomerate, which held monopolistic control over copper mines throughout Europe and also financed several political campaigns for European aristocrats and monarchs. He’s estimated to have been worth $400 billion, in present-terms.
Historical Accomplishments:
Began his mining empire by incrementally financing independent mines in return for shares. Next, he financed aristocrats and their empires, like the Habsburgs, in exchange for sole-control over the territories mines. Over time, Fugger eliminated intermediaries within the mining industry and became the prominent supplier and distributor of copper throughout Europe and India. To further control the supply chain, Fugger funded the construction of ports and roads to facilitate trade between Central Europe, from Antwerp to Lisbon.
Became a close confidant and financier of Maximilian I, the emperor of the Holy Roman Empire. Through this relationship, Maximilian granted Fugger with properties and lordship titles. The latter afforded Fugger with power to operate his businesses without interference from local nobility; thus growing profitability of his monopolistic mining trade.
Financed major Vatican projects like the new St. Peter's Basilica and the Sistine Chapel. However, because of this arrangement, the Pope was forced to sell indulgences with the help of Fugger bankers, inspiring the wrath of Martin Luther’s 95 Thesis.
Launched the Fugger Newsletters, considered to be the first business memos in history. Newsletter correspondents reported on news across Europe that impacted Fugger’s business interests. Therefore, he discovered critical information ahead of negotiations, giving him the upper hand.
Participated in the European - Indian spice trade, moving spices, rare foods, and precious gems through his Lisbon manufactory.
Advanced the practice of double-entry bookkeeping within his businesses. Fugger sent accountants to every one of his businesses to accurately record a consolidated balance sheet. This helped him make well-informed decisions when financing deals.
What makes him a GENIUS:
A true capitalist, Fugger’s keen business skills helped him take advantage of high-risk, high-reward opportunities. He could teach a masterclass in negotiation and investing based on his dealings, like how he financed the ruling class to secure ownership of highly-prized copper, mercury, and silver mines. Also, his acute attention to detail, as evidenced by his bookkeeping and information gathering practices, is a case study for winning in business. He was armed with the most information to make the best decision.
Our lasting takeaway:
While Fugger can understandably be viewed as an unethical capitalist (his bribing and predatory-lending practices would be jail-able offenses in modern times) because of his deceptive negotiating practices, he did illuminate the fundamentals of investing: proper due diligence, skillful negotiation, and fearless opportunism.
To accumulate mass-wealth, one must take entertain outsized risk over and over again. Like Warren Buffet, Fugger believed in the “invest when others fear” mantra. Investing in times of mass-fear certainly carries tremendous risk. To Fugger’s credit, he was an expert at de-risking his bets by forming the right relationships with leaders who could offer him and his businesses considerable influence over other nobles.
Fugger’s quest in becoming history’s richest man uncovered numerous case studies for every business owner and investor.
Quotes / Life Lessons:
“I want to gain while I can.”
Sources:
https://www.britannica.com/topic/Fugger-family#ref262142
https://www.medievalists.net/2018/12/richest-person-history/
https://www.marketwatch.com/story/7-money-making-lessons-from-the-richest-man-who-ever-lived-2017-05-02
https://www.encyclopedia.com/people/history/historians-miscellaneous-biographies/jacob-fugger
https://www.weforum.org/agenda/2015/12/lessons-from-the-richest-man-who-ever-lived/