Transcription
[Music] This right here is a collection of 38 letters that John D. Rockefeller wrote to his one and only son, teaching him everything that he knew.
Now, in case you don't know anything about Rockefeller, here's a quick refresher. Rockefeller founded a company called Standard Oil, which processed and transported oil across the United States. His company quickly took over the oil market, making him the richest man in American history with an estimated net worth of $1.4 billion, around 400 billion in today's dollars. At his peak, his wealth made up nearly 3% of the entire US economy.
But what's interesting about Rockefeller isn't just what he built, but it's about how he thought about passing it on. These letters weren't written to the public. They were written to his one and only son. And in these letters, he lays out a blueprint for how to build wealth. Because Rockefeller knew something very important: that wealth isn't passed down in currency. It's passed down in knowledge. And that's exactly what these letters show.
And what I did was I broke down these 38 letters into three sections and 15 lessons that define how Rockefeller made his fortune. So let me take you through the principles that John D. Rockefeller believed would make his son more wealth than ever.
Number one, hardship builds character. So where does the ability to practice come from? In my opinion, it is hidden in hardship. My experience tells me that walking a difficult road, a road full of hardships, misfortunes, failures, and difficulties will not only build our strong character, but also the ability to implement great things. Those who climb out of the midst of suffering know what it means to find ways and means to save themselves. To endure hardship deliberately is one of my beliefs of success.
This quote encapsulates all of Rockefeller's beliefs on hardships. He believed that hardships were a good thing, that it was what makes you resilient. This is of course based on his own experience. When he was young, his family was very poor. One time when he was a kid, he was all excited to go to school because there was going to be a photographer there and photographs back then were very expensive. So, it was a rare occasion. But when the photographer was going to take the picture, he asked Jon to get out of the frame as his clothes were too shabby as compared to his classmates. Rockefeller remembered this specific moment for decades. And he even says about it, "Looking at the adjusted camera scene, I clenched my fists in my heart and swore to myself, one day you will become the richest person in the world. What is the point of having a photographer take a picture of you?"
And Rockefeller faced a lot of this growing up. His books in high school were all bought by neighbors. He started his career as a bookkeeper with a weekly salary of $5. And from the very beginning, he was forced to face hardship after hardship. And according to him, this is what made him so resilient. He said, "I believe there is not one person in the world that does not long for a happy and luxurious life. Yet, not many people know where it comes from. In my opinion, it does not come from wealthy blood, nor from a luxurious lifestyle, but from a luxurious character, the spirit of self-reliance."
He even went so far as to apply this lesson to his kids. When they were young, he deliberately hid the fact that he was rich from them. Because, in his own words, the quickest way to harm someone is to give them money. So, if you're currently going through a hardship right now, know that it's not for nothing. Although it's hard to see in the moment, the hardship that you're facing is building a character of resilience. And that is the type of character that will always build more wealth than the people around him in the future.
Two, fail a lot. So, at one point in Rockefeller's life, he was just entering the job market, and he was looking for a job. In the book, it says he would get up at 8:00 a.m. every single day, get dressed, and look for a job. But for several weeks, it was rejection after rejection. But he told himself, "You are the only one who can go on forever. I warned myself. If you do not want others to steal your dreams, then you stand up immediately after being knocked down by setbacks."
6 weeks later, he landed a job at the Huitt Tuttle Company. And only 3 years later, he left that job and started his own company, the company that would soon become Standard Oil. But it all started the day he got the job. And he even celebrates this day as his rebirth. In the letters, he talks about how his rebirth was even more important and more celebrated than his own birthday.
But why was the rebirth day so important to him? And he said, "It's because of the amount of failures that he overcome in order to achieve getting a job. My motto is people always have to maintain their energy. Remain strong and persistent no matter what failures and setbacks they encounter. This is the only thing I can do."
He even brought up Thomas Edison, saying that Thomas Edison had 10,000 experiments before finally creating the light bulb. And that to Edison, failure was a test field for success. Rockefeller's formula was simple. It was dream plus failure plus challenge equals success. And when studying some of the greatest people in history, you'll find that a lot of them are also the biggest failures. The Wright brothers had over 700 test flights before they finally had a successful flight. Nicola Tesla filed over 300 patents, most of which failed commercially. James Dyson built 5,126 prototypes over 15 years of the Dyson vacuum cleaner before finally his 5,127th design finally worked. and that became a billion dollar company. There is no shortcut. Sometimes the best way to move forward is by simply failing a lot.
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Three, love to work. I think that work is a privilege as it brings more than just sustaining life. Work is the foundation of all business, the source of prosperity, and the shaper of genius. Work makes young people work harder and do more than parents, no matter how rich they are. Work is expressed in the humblest form and lays the foundation for happiness. A job helps add flavors to life. But people must love work before it can return the biggest favors and achieve the greatest results.
Rockefeller loved to work. It's as simple as that. And although there's a lot of reasons to not like work, there's this analogy that he tells that I think is really quite beautiful. Three people are busy at work doing the same sculpting job. You go to the first one and ask, "What are you doing?" And he says, "I am chiseling the stone so that I can then go home." This kind of person sees work as a punishment. The second one says, "I am making a statue. This is a very hard job, but the compensation is high and I have to feed my family." This kind of person, although better than the first, is still not likely to build much wealth throughout his life. And then there's the third who points proudly at his work and says, "I am making a piece of art." This kind of person takes pride in and enjoys his work. And what he finds is meaning.
Rockefeller writes to his son, "John, if you view work as a pleasure, life is heaven. If you view work as a duty, life is hell. Reflect on your work attitude. It will make everyone happy."
Four, don't worship money. So, one interesting thing about Rockefeller was that he was actually a devout Christian, but he was always clashing with different Christians because of the different philosophies that they had. One of the biggest clashes that they got in was money. There's a verse in the Bible from the book of Timothy that goes, "The love of money is the root of all evil." And people interpret this line in many different ways. For Rockefeller, he believed that loving money is only bad as a means of worship and not as a means of motive.
Rockefeller actually saw being rich as a good thing. He said, "If you have money, you can benefit your family and friends and give them a happy and comfortable life. And even benefiting the society, saving the helpless poor people, then money will become the source of happiness." To Rockefeller, money was like a fire. It's dangerous if you worship it as you would probably become some sort of arsonist. But if you put fire in the right hands, then you can also use it to cook food, keep yourself and the people around you warm, and also light up the dark. Fire itself isn't bad. But if you use it in the wrong way, it can become bad. And this is how Rockefeller thought about money.
He even went so far as to say, "I firmly believe that God has clear rewards and punishment and that my money is given by God and I can always make money if God helps. This is because God knows that I will return the money to society for the benefit of my fellow citizens." Not to mention that he finishes that letter by writing to his son, "It is time for me to read the Bible. The night is so beautiful tonight. Every bright star seems to say, 'Good job, John. Love your father.'"
Five. No excuses ever. In my opinion, excuses is a mental illness. And the people with this serious illness are all losers without exception. Of course, most people also have some mild symptoms. However, the more successful a person is, the less excuses he will find. The biggest difference between those who are prospering everywhere and those who do nothing is excuses.
Now, according to Rockefeller, there are three types of main excuses that people have. And these excuses were health, intelligence, and luck. The first of these excuses being health, where people will say, "I have this sort of illness or ailment." Yet, there's this old saying that goes, "I have been annoyed by my broken shoes until I met a man who has no feet."
To give an example from history, I'm going to use a British guy, Horatio Nelson. Horatio Nelson was a naval captain. And at the age of 36, he lost sight in his right eye at the battle of Calvie Corsica. Two years later, he lost his arm at the battle of Santa Cruz de Tenneref. But even after both of these major events in his life, he didn't give up. He still continued as a naval captain. Even without an arm and without sight in one of his eyes, and what he found was that his best days were even in front of him. He marked his name in history by defeating Napoleon's navy at the Battle of Trafalgar. And so Horatio Nelson is a great example of no excuses ever. He didn't have an arm and he didn't have sight in one of his eyes. And he was the best naval captain in the world at the time.
There are always excuses to give, but Rockefeller's point is to just keep moving forward no matter what. Excuses keep most people out of the door to success. 99% of failures are because people are used to making excuses.
Six, be optimistic. The level of confidence determines the level of achievement. This one is huge for Rockefeller, but it's also huge for people like Walt Disney, Peter Teal, and even Napoleon. They are all relentless optimists. Successful people are just ordinary people who believe in themselves and affirm what they do. Never sell yourself cheaply. And in the end, this is what success always comes down to. It's believing in yourself plus affirming that belief with your actions.
When Rockefeller was entering the oil business, many people thought that it was reckless. At that point in time, the oil sector wasn't as big as it is now, and it was a very big risk. Rockefeller, in a way, was able to see where the future was heading, and so he jumped in with both feet. He had a belief, and he affirmed it with his actions. And at the end of the day, that's all it took.
Seven, business is war. The thing that you have to understand about Rockefeller is that he saw business as war, and he was ruthless. He didn't just set out for a slice of the pie. He set out for the entire pie. And anyone else who was trying to take a slice was an enemy.
At one point in his career, there was this guy named Benson. And Benson was a very big enemy because he wanted to build a 110-mile pipeline connecting Pennsylvania to the West. This pipeline would have delivered cheaper oil to many customers that Rockefeller currently had. And Rockefeller wasn't about to let this happen. So what he did was he bought a bunch of land for where the pipeline would go through and then secured permits so that the pipeline couldn't go through his land. But to this, Benin simply took a detour route and kept going. He then talked to all of his railroad allies and told them not to let this guy build the pipeline on their land. But Benson did the same thing. He talked to the guys and convinced them to let him build the pipeline. Eventually, Benson was actually able to complete the entire pipeline even with all of Rockefeller's effort.
But Rockefeller wasn't done. He was engaged in the battle and he was determined to win. He said about this, "I know that I have a tough enemy to conquer, but he cannot shake my determination to compete because the 110-mile pipeline is my biggest threat. If I let crude oil flow there unimpeded, they will also acquire the supply line to New York. Then Benson will replace me as the owner of the New York oil refining industry. Concurrently, I will also lose ownership over the Bradford oil field. This is something I cannot allow."
And what he did after was kind of genius. You see, Rockefeller knew that in order for Benson to actually sell the oil, he would need containers to store the oil in. So, what Rockefeller did was he talked to all the biggest manufacturers in the area and he put in these huge orders for oil containers. So much so that it actually backed up production for these people. And now, because all of these manufacturers were backlogged, Benson was unable to buy any containers. And without containers, you're unable to transport oil. And all the crude oil that was coming from the pipeline now had to be dumped out into the wilderness. It took less than a year for Benson to surrender.
An excellent commander will not attack a bunker that has nothing to do with him, but will try to destroy the bunker that is strong enough to destroy the city. Rockefeller focused everything that he had on his biggest enemy. And because of this, he won. It's also very interesting because Rockefeller actually had a lot of respect for Benson. He didn't hate his enemy. He simply understood one very crucial thing: that business was war. And in order to win the war, you have to get rid of the biggest competitor. And that's how Rockefeller was able to maintain a monopoly for so long.
Eight, strong negotiation. Now, when it came to negotiation, Rockefeller had a list of five things that you needed to have in order to have a successful negotiation.
First, the overall environment. What is the market situation and what is the business situation? This is very important because when you enter into a negotiation, you have to have a very large amount of knowledge in the field that you're operating in. For example, if you're in oil, you have to know the process of refining oil. You have to know the real-time valuations of oil. And you have to know all the current events going on that could affect the scarcity of oil. If you're unsure about any of these statistics, then the opponent could take the upper hand in the negotiation.
Second, your resources. What are your strengths and weaknesses, and what capital do you have?
Third, the opponent's resources. What are the opponent's assets, and where are his strengths and weaknesses? You have to play to your strengths and to your enemy's weaknesses. Like in the story with Benson, Rockefeller actually had more capital than him, so he could outlast him if he wanted to, but it was only when he started exploiting his opponent's weaknesses where he was actually able to win. Benson's weakness wasn't actually anything to do with the oil process at all. It was simply about containing the product and being able to transport it to customers. And so when Rockefeller targeted that, he was able to win the battle.
Fourth, your goal and attitude. The motto of the god of sun, Apollo, is only a short sentence: "Know yourself." You need to know what you are doing, what goals you have, and how determined you are to achieve them. This one is very simple to remember, but very hard to apply. How often do you fight a battle that doesn't need to be fought? Rockefeller rarely fought, but when he did, he jumped in with both feet. And he was able to do this because he knew what was important to him. He knew which battles he needed to fight to accomplish his goals. Whatever battle you fight, you have to make sure that it is extremely aligned to your goals. Because if your opponent is more determined than you, then with enough time, he will win.
Fifth, the opponent's goals and attitudes. Try to judge the opponent's goals. And it is also important to try to penetrate the opponent's heart and understand his thoughts and feelings. Humans don't always act logically. Many times we act emotionally. And so if you can target that emotional part of people, then a lot of times you can exploit it and win. This is true in debating or in sports or in really any endeavor where you have opponents in front of you.
Nine, look for investments. In one of his letters to his son, he writes about a speech given by Mr. Charles which talks about the three types of people with money. There are two kinds of people in the world that will never be rich. First, people who like to live a glamorous life. Like flies starting at a stinky meat. They are very interested in luxury goods. They spend so much that they do their best to have exquisite costumes, expensive cars, luxurious houses, and highly sought-after art. This kind of life is indeed fascinating, but it lacks rationality. You can think of these types of people as the business owner who's never at the office, constantly on vacation, constantly on the private plane, and uses a lot of the company's money to fund their own adventures.
Now, he's not saying that a private plane or a nice house or luxurious vacation is inherently bad, but what he's getting at is that although these experiences are fascinating, they lack real purpose. And the real purpose, according to this businessman, is to provide as much value to as many people as possible. The second type of people are those who like to save money and store it in the bank. But it is no different from freezing money. You must know that you cannot make money on interest. This is where most people lie. And although it's not putting money in the bank nowadays, a lot of times it's these credit card payments, mortgages or car loans. You can think of any negative debt that you might have. Anything that sort of keeps you in a trap.
However, there is a kind of people who will become rich. For example, everyone here, we do not look for ways to spend money, but we look for ways to cultivate and manage various investments because we know that wealth can be used to invest and create more wealth. But we also know that every penny can bring benefits.
Now, this is where Rockefeller's secret really lies. He knew that in order to conquer the market, he needed to reinvest his earnings back into the company, back into some sort of investment. And that's what he did multiple times throughout his life. There are so many examples in these letters where Rockefeller wants to expand the business. He wants to invest more and more money, and the people around him are sort of skeptical. And so, what he does is he chooses to use his own money and put his own money at risk in order to get more money in the future. And he made this decision a lot of times because he knew the lesson that he wanted every penny to be working for him.
10. Discover others' weaknesses. Rockefeller was known for striking at weaknesses. One of the best examples of this was during the South Improvement Company scheme. Everyone at this point was paying full price to ship their oil. And so he moved on this. He made secret deals with all the railroad companies so that he could get a rebate on all the product that was shipped, including his competitor's product. This meant that every time he moved oil or his competitors moved oil, he got paid and none of them knew it. This single move let him undercut their prices and take over the market very quickly.
He wrote to his son, "In competition, the person who first discovers the opponent's weaknesses and strikes hard is often the winner." And this was the philosophy that he built his whole company on. One of the core ideas behind this is something called a pressure point. So in the human body, there's a couple spots where if you really target them, the entire body will just crumble. You can think of a really well-placed liver shot where any shot there will just crumble the body immediately. Your body is filled with pressure points, and so is a business. A pressure point in the market might be a distribution level. It might be information. It might be timing. The key is to be really in tune with your own company and your competitor's company as well. If you're very aware of what your opponent's weakness is, whether it's they're running out of cash or they're not innovating fast enough to keep up with demand, you can exploit their weakness and quickly crumble their company.
11. Treat employees well. So Rockefeller was actually very adamant on how he treated his employees. He even wrote to his son, "I love my employees. I never scold or insult them loudly, nor do I become domineering and indomitable in front of them like some rich folks do." What I provide my employees is warmth, equality, and tolerance. All of these combined into one word is called respect. Give the people the respect they deserve, and they can fully realize their potential.
This is a part of Rockefeller that a lot of people miss because a lot of people see Rockefeller as this ruthless enemy, but the people in his own company didn't really see him that way. Inside his company, Rockefeller showed his employees a lot of respect and he allowed them to flourish and grow in whatever position they were put in. One of these people being a man named Henry Flaggler, who started as a partner in a small refining deal. Under Rockefeller's leadership, he grew into the right hand of Standard Oil and was given a lot of responsibility to eventually make big decisions for the company. And this was able to happen because Rockefeller gave respect to his employees. Instead of being a tyrannical boss like many of the industry leaders back then, he showed his employees that everyone could rise from a small position. And because he did this, his company thrived.
12. Use greed. Rockefeller didn't shy away from greed. He actually used it. He actually really leans into this when he wrote to his son, "Destiny must be created by oneself, and what one really wants must be obtained by every means." You see, Rockefeller didn't believe that greed was a sin, but instead he used it as something to drive him. He said, "Every step I move forward can make me fuel the power of greed." And instead of looking at greed as a bad thing, he actually saw it as a good thing. He let the greed guide him. He used it as a motivator. It was pretty much a sort of fuel. He simply liked to play the game. And because of this, he saw greed as a good thing, not a bad thing.
So, 13, lead by example or take responsibility. So there's this one story that Rockefeller told his son where he was debating with his team at Standard Oil on whether they should buy an oil field. It was all sorts of debating and eventually the board decided that it was too risky of a move for them to make. But as you already know, Rockefeller was always looking to expand. He was always looking to invest more money to buy new things. And so he had one more trick up his sleeve. He told the board, "I decided to use my own money to make this investment and take the risk for 2 years. If it succeeds in two years, the company can return the money to me. If it fails, I will bear all the losses myself."
And if you think Rockefeller made the wrong move, look at what happens next. "My determination and sincerity touched my biggest opponent, Mr. Pratt, as tears welled up in his eyes and excitedly said to me, 'John, my heart is captured by you. Since you think we should do this, let's do it together. If you can take the risk, so can I.'" In the end, they succeeded very largely with the Lima oil fields, and they actually all made their money back.
But the true lesson here isn't just to make the investment, but it's also how to lead. All great leaders not only have their actions aligned completely with their beliefs, but they also lead by example. With the purchase of the Lima oil field, Rockefeller put his money where his mouth was. And because of this, the board was ready to follow him and even take a very big risk.
14. Have a vision, my son. "Destiny must be created by oneself, and what one really wants must be obtained by every means. Every night before going to bed, I advise myself. I want to become the largest oil refiner in Cleveland. Let the flowing oil creek turn into bundles of banknotes. I want to align every thought to my profit motives and help myself become the king of oil."
Another thing that all great people have is a vision. There are so many people in the world today that are directionless. They're aimless. They have no vision. And because of this, when someone does come along and says, "I have a grand vision and we're going to come together to make this possible," it's attractive and it's charming. People actually want to follow you because of this. And Rockefeller knew this to his very core. He actually uses an analogy to describe this. It is like loosening a yacht from the dock and forgetting to start the motor. You will follow the currents and sea breeze. Currents or other ships might collide into you and cause you to sink to the bottom of the sea at any time. Maybe something good is waiting for you on the other side, but unless a miracle occurs, you will not be able to reach the other side smoothly. Establishing a purpose is like turning on the engine of a yacht, which can propel you towards the path you choose. Purpose can add direction and strength to human efforts. And I don't think I could explain it any better than that.
15. Reputation is everything. A person is great not because he has a certain official title. The reason why he is great is that he used a few tools to create a greater cause and accomplish his life goal as an unknown civilian. This is the real greatness.
At the end of the day, Rockefeller was a ruthless businessman, a ruthless competitor, and a ruthless negotiator. But that can't be set apart from all the good that he did as well. Because the same man who crushed all of his competitors also built the University of Chicago. The same man who squeezed every drop of profit from his pipelines, also funded medical research, built libraries, and built schools all around the world. Throughout his entire life, Rockefeller gave away $500 million to charity. Not because he believed in being charitable, although I'm sure he did, but because he believed in building a reputation that would last. From the way he treated his workers to the countless donations that he made to society, he was adamant about being a reputation that would last.
And it's weird because many people in the world see him as only the ruthless businessman and the ruthless competitor. But he actually cared very much about his legacy. He said, "If you forget what I said tonight, please do not forget the following statement: The person who thinks the most, feels the noblest, acts the most righteous, and lives the most fulfilling life." And I think what Rockefeller was getting at with this is that although people may understand certain actions you take, as long as you know in your heart that you're doing it for the right reason, you will build a legacy that lasts and stands the test of time.
Thank you all for watching. If you want daily doses of historical wisdom, check out the link in the description. And if you want another video similar to this one where I go over 13 habits that Napoleon used to take over the world, you can check out that video right there. Anyway, that's it. So, uh, see you.
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