Henry Ford: How to improve your finances with these 5 tips

As Patrick Dwyer best describes Henry Ford, he has been a great inspiration for many entrepreneurs, a visionist who dedicated his life to innovation and resourcefulness. As a little boy he learned how things work, a common story in his childhood, tells that when he was 13 years old, he received a watch as a gift for his birthday and intrigued by how it worked he turned it apart and started learning on how machines were designed.

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Image courtesy of thebaronhome.com at Flickr.com

Henry Ford could have followed his father’s steps, however, he wanted to explore his own path. He worked for several big companies, like the Edison Electric Illuminating Company, where he learned a big deal about engineering and electricity. In this article, Patrick Dwyer lists 5 tips Henry Ford would give you about finances if he lived in today’s hectic world. Although a lot has changed, he did build one of the biggest companies that is still a leading company in the automobile sector, and his method can help you improve your business finances.  

Be a continuous learner

Without a doubt Henry Ford was a man who was constantly learning, adding new abilities and updating his knowledge, even before starting with his Ford company, he had to be a pupil in Edison’s company, learning all about electricity, and with time he became chief engineer. When he built his company he started with one model, understanding and venturing with new models, came from his need of constant improvement and it’s with an open mind and will to learn that he could envision his new challenges which led him to success.

Who you surround yourself with matters, choose a great team

When Henry Ford started his third business venture, he knew he needed a great team by his side. He had the ability to identify and persuade young talented men who believed in his new challenge. They helped him make his vision come true. Henry Ford would recommend you, to form a great team to back up your company, helping you succeed with your product or service and increasing your income. Dare to hire the best, they are worth it. Hire people with desire to succeed and who believe in your dream.

Plan your taxes, beforehand

A great advice we are sure Henry Ford would give you is, that when creating a company it’s important to understand how the business world works, and that includes your taxes. Make sure you have that clear, what taxes need to be paid and if there are any deductions you can do, that can help you save money. Specially know when they have to get paid, paying them after can cost a big amount in interests. Month by month organize what taxes need to be paid, include them when you are doing budgets since the money needs to come from somewhere. Always have them as a monthly fee that needs to be paid and if you can pay them beforehand, you might even get a discount. Get your documents in order and for sure you will save money if you do them right. You can ask for an accountant for advice, that will save you a lot of headaches.

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Image courtesy of Pictures of Money at Flickr.com

Setting up an accounting system is a must

Henry Ford learned after 2 failed companies that your accounting system is a must. Organizing your income and expenses, knowing how much it costs to make your product or to provide your service and how much you can charge, will help you have your finances in order and understand where your revenue comes from.  Now today there are many ways of setting an accounting system, you could still have the traditional writing system of having it all in an accountant book but there are new systems and Softwares that can help you classify your finances. Ford was a technology supporter and he would recommend you get a system and make sure it has all the data you need, to understand where your revenue comes from and how you can increase it day by day.

Budgeting every dollar you spend on your projects

When starting a company, it’s important to have a financial plan, with long-term and short-term goals. With this in mind, the idea of a good budget and to know if your business is viable, you should spend less than what you earn. Analyze your regular expenses and always leave some extra for irregular ones that come along the way, after a few months of tracking how much you spend to make your company work, you will have a very good idea of how you can lower those expenses. When you make the decision of how much the product you’re selling will cost, you need to include all your expenses, that way you can cover them and even have a revenue. Include regular and irregular monthly obligations, not just how much the raw materials cost, how much time does it take to make one product and there you can calculate, workforce, amenities used, among other things you need to produce it, then add a percentage of revenue. As Ford recommended it’s not the employers who pay the wages, it’s the customer who should. Analyze all these expenses and you shouldn’t be struggling to pay your employees month by month and you will be heading to business success for sure.

One of the biggest industrialist in the world: Andrew Carnegie

Andrew Carnegie (November 25, 1835 – August 11, 1919) was one of the biggest industrialist in American history who worked principally in the steel industry in the 19th century. He was born in a modest family in Dunfermline, Scotland but in 1848 his parents emigrated to the United States searching for better economic opportunities with Andrew as a child. He is considered one of the richest person in United States history and one of the most important philanthropists in North America, giving an estimated fortune of $350 million dollars to multiple charity foundations, hospitals, libraries, and universities.

Established with his family in Allegheny City, Pennsylvania, Andrew started working in a cotton plantation when he was still a boy. Passing years, he worked as a messenger in a telegraph office and later as a secretary for the Pennsylvania Railroad. In a few years, Andrew replaced his boss to work as railroad division supervisor, where he could learn about the railroad and its operation. There he worked for more than five years and in this period he could make some investments in iron, oil, coal and some manufacturer companies growing up his wealthy. Later, Carnegie entered in the steel industry, and after some decades, he consolidates all his business in the Carnegie Steel Company.

The Carnegie Steel Company

The first steel company created by Andrew Carnegie was the Edgar Thompson Steel Works in Braddock, Pennsylvania. This enterprise was very rentable, due to different innovation processes that Carnegie led, like improving technology infrastructure and reducing different operation costs, which produced large utilities and revenues, letting Carnegie and his associates buy other companies. With all these new investments, he consolidates all of them in The Carnegie Steel Company, one of the biggest steel company in the American market for that time.

The Carnegie Steel Company continued making technological innovations; improving constantly its processes, making the steel production faster and reducing manufacturing costs, which was traduced in more profits for the company. Also, with its fast growth, the company created a lot of employees especially for less skilled operators and positioned as the major steel company in the United States.

The United States Steel Corporation (U. S. Steel Corporation)

In 1901 The Carnegie Steel Company was sold to The U.S. Steel Corporation, which was a new holding created by John Pierpont Morgan (J.P. Morgan), who was one of the biggest bankers in America at that time. The company was sold for $480 millions of dollars and the half of this amount went to Andrew Carnegie, making him one of the richest men in the world. The U.S. Steel Corporation was the unification of The Carnegie Steel Company, The Federal Steel Company, and The National Steel Company. This conglomerate of steel companies merged under the name of The United Steel Corporation and was the first billion of dollars company in the globe. Also, it was considered the major steel producer and the biggest company in the world. In its firsts years of operation, the company produced the 67% of all the steel consumed in the United States.

Andrew Carnegie and philanthropy

After the transaction with The U.S. Steel Corporation, Carnegie being one of the richest men in the world, let aside his business life and spent his last years dedicated to philanthropy. He was convinced that the richest men had the obligation to distribute their fortune for the benefit of the community.

Andrew Carnegie dedicated almost all his efforts to build public libraries in many English speaking countries, like United States, Canada, his natal Scotland, among other states. He was able to build 3.000 public libraries around the world with the main idea of promoting the knowledge and education in the society.

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Image courtesy of Canadian Pacific at Flickr.com

Besides public libraries, Carnegie also contributed with more than $2 million dollars for the construction of The Carnegie Institute of Technology in Pittsburgh in 1900. Two years later, he gave another $2 million dollars to start The Carnegie Institution in Washington D.C. He also contributed for the construction of schools and other education institutions. In 1901, Andrew gave $10 million dollars to build the Carnegie Trust for the Universities of Scotland which was a charitable trust to benefit Scotland universities.

In his last years, Andrew Carnegie dedicated more than $350 million dollars of his wealth to philanthropic projects, not only in education but also in science research, church’s, construction, and other initiatives to benefit people of different countries around the globe.

He used to say that “The man who dies thus rich dies disgraced”, so he tried to give all his wealth to charity projects in different nations, like United States, Canada, Scotland, South Africa, Fiji, among others.

Related: 8 important tips famous financial titans would give you by PATRICKJDWYER

Death

Andrew Carnegie died at age 83 on August 1919 in Massachusetts of pneumonia. The rest of his wealth was given to charity foundations and pensioners. He was married to Louise Whitfield and they had one daughter called Margaret. Carnegie was buried at Sleepy Hollow Cemetery in New York.

A Story Worth Telling

On April 14th, 1865, just five days after the end of the Civil War, president Abraham Lincoln is the last of the more than 600.000 deceased victims who perished during America’s bloodiest conflict. The country is divided. And the experiment called democracy has not worked out. But, what readers might or might not ignore, is that this is also the birth of a new era: the country is evolving and experiencing new developments and improvements. And the void left by the greatest statesman the United States of America has ever had will be filled by a new race of leaders: Rockefeller, Ford, Carnegie, etc. They were the first generation of what readers nowadays know as entrepreneurship. They were today’s Steve Jobs, Bill Gates, Mark Zuckerberg, etc. They were the people who first established the foundations for the so-called American Dream. They ruled, both literally and metaphorically, the boundaries of this nation. A group of highly intuitive, intelligent men like never seen before, during the next five decades, will be responsible for reshaping the United States of America, pushing the country towards the excellence. Due to their vision of the world, they inspired thousands of other Americans like Patrick Dwyer who kept on transforming not only the country but also the world with their philanthropic acts and their work.

In 1865 in the city of New York, the most suitable man for leading America is not a politician: he happens to be a simple man who started from scratch and built his own empire. Forty years ago, at the age of 16, Cornelius Vanderbilt bought a small ferry with a 100 dollars loan. Soon, he earned the reputation of being a ruthless businessman, capable of taking advantage of the others just to obtain whatever he desired. During those days, the competition amongst rivals was limited to brain vs. brain; effort vs. effort. The business process was somewhat similar to the Wild West, where a winner would go away rich, or richer, and the loser would remain poor or bankrupt. Vanderbilt was a man whose short temper was legendary: he would engage in fights with his rivals and walk away after beating them up. Sooner than later, his single ferry went on to become a whole fleet with which he would transport both goods and passengers across the seas to whichever country they were bound. Vanderbilt had previously realized the importance — and profitability — of transporting goods and people, and he knew that for this to be possible a certain infrastructure was required; infrastructure the government was not willing to provide, therefore, he decided to be the one to provide and build the foundations of the maritime substructure. During the next forty years, Cornelius Vanderbilt went on to build the world’s largest ship Empire. Years later, just before the civil war, he would achieve the unthinkable: after realizing the magnificence of the first American railroad — whose construction happened to be in progress at that time —, Vanderbilt sold his entire fleet and invested in the railroads instead, realizing that these trains would shorten the transportation times from one corner to another within the nation. His capacity to foresee the future implications of whatever thing was going on was a huge part of his subsequent success. His investments in the railroad industry proved to be highly profitable, in fact, after the civil war, Vanderbilt was America’s richest person with a net worth of 65 million dollars — or 75 billion dollars at the present time —, however, even though he had amassed such fortune, he could not escape the devastating and crushing consequences of the Civil War: his son, George, died in the war.

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Image courtesy of Richard Welty at Flickr.com

This was a huge tragedy for Vanderbilt who had envisioned himself in his son; thus, the Commodore — as he was known — was forced to trust in his less brilliant son, William. Tormented by his loss, and right after William failed at several important negotiations, the competition no longer sees Vanderbilt’s empire as a threat. Nonetheless, Vanderbilt was a very wise and intelligent man capable of turning an apparent drawback into an opportunity: he had the Albany bridge closed — which was the only entering route to New York —. With this bridge closed, the other trains were unable to access the city of New York. By isolating New York, thousands of tons of freight could not access the city, which ended up hurting his competitors badly. The rumor hit Wall Street and the stock prices of the freight companies — his competitors — dropped, and Vanderbilt seized the opportunity and bought all their shares, thus, he went on to found the New York Central railroad. He was the sole ruler of the railroad industry.

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Image courtesy of Tony Webster at Flickr.com

Railroads helped America to develop much faster since it was then possible to connect both the east with the west and vice versa.

John D. Rockefeller and the power of oil

When we talk about monopoly or oligopoly of oil we must inevitably refer to the companies drawn of the old Standard Oil, a company created after the American Civil War by John D. Rockefeller I.

Rockefeller, in a very short time, became a tacit monopoly of the US oil industry. He came to concentrate in their hands 95% of the exploration, exploitation, distribution and retailing of gasoline in the US He always thought that the oil business should be integrated vertically, that is, the same firm must control all stages of production. And the key business itself was to have under its orbit the distribution process, so he came to get an agreement with significant discounts with the railroads that controlled JP Morgan, agreed that turned to the ruinous dessert for all competitors, to which one to one was moving market, often by applying compulsive methods. That business actions, devoid of moral precepts, or codes, was common in the dozen entrepreneurs who began to control the US economy after the death of Abraham Lincoln.

The Rockefeller clan rose to become a hub in the economy and politics of the United States. Who in the past century were brilliant winners of money, in the 20th century were characterized as the brightest spenders.

But who was really Rockefeller, what its origin was and how he managed to get his wealth:

John D. Rockefeller was born on July 8, 1839 and just missed him three years to reach live a century, he died at 97 years old. This is something that men fail at a rate of one in a million. Being very young, her family moved to the city of Cleveland and the boy reached there as collector potatoes go on vacation, so they paid 4 cents an hour. His mother paid him a dollar to help him raise turkeys and memories of his childhood, when he was already a millionaire, always had a turkey farm on his estate. Then, as a teenager, he was employed on a farm where he was paid 37 cents a day.

Finished their basic studies, John D. would have none of University. He joined a good business school and after a few months of study, their teachers said it was able to be used. They helped him enter as a subordinate employee in a broker firm, where he soon prospered, he became cashier and later in counter. At that time and for the rest of his life, John D. was always interested in the affairs of the Church, so that Sundays were spent teaching doctrine in the Church of the town.

In 1859, when he was 20, he formed a brokerage firm with his friend Maurice B. Clark, but the money he earned not invested in loans, which was a very slow way to make money. John D. had a nose for fast business and decided to get into the oil business. The year was 1862 and there was room for everyone.

In 1866, the company was expanded. Later the younger brother, William Rockefeller and Samuel Andrews joined, and the firm was called William Rockefeller and Company. In 1870, the company became a corporation under the name of Standard Oil Company of Ohio, which joined other partners who contributed $ 1 million.

In early 1872, Rockefeller helped create the South Improvement Company, a partnership that included the major oil refiners Cleveland, reaching agreements with railway undertakings to obtain large discounts for members of the association. This agreement was annulled legal way three months later, over the protests of the people, but by then almost all competitors Rockefeller had been forced to sell or to associate with him. In 1878 Rockefeller controlled 90% of the oil refineries in the US and soon after had a monopoly of distribution channels.

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Image courtesy of Boston Public Library at Flickr.com

In just over 10 years, the young John D. had become a businessman and drove millions. A truly meteoric career that could only happen in those times. By 1873, almost all oil companies that refine it had joined Standard Oil, whose capital had increased to 3 and a half million dollars. The new company had to appoint trustworthy people who will take care of handling properties that could not be incorporated into the Standard Oil Company of Ohio, but in 1882, all of these properties were combined into a giant Standard Oil Trust, which was dissolved ten years later to form the Standard Oil Company of New Jersey, which also had to leaving office in 1911 because the Antitrust Commission of the United States considered monopolistic. At that time, it was estimated that the Standard Oil Company owned three quarters of the oil states. For many people it had become the symbol of the concentration of US commercial power.

To read more about John D. Rockefeller, visit my post: Rockefeller: from America’s most hated to America’s greatest donor.

Rockefeller: from America’s most hated to America’s greatest donor

America’s first billionaire, John D. Rockefeller, formerly known as a robber baron, philanthropist and even the founder of the American middle class, was responsible for the development of this nation as a great industrial power. Experts like Patrick Dwyer agree upon the fact that his story is uniquely a depiction of the history of development in the United States.

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Image courtesy of Alexander Rabb at Flickr.com

Born in New York back in 1839, John D. Rockefeller did not have an easy early life — not even an easy childhood —: his story is the one of a man who started from the bottom and made a name for himself throughout the years. Influenced by his mother and her Christian background, Rockefeller would always point out that a man should always strive to achieve success by his own — with his own effort and intelligence. Rockefeller’s mother also taught him the virtue of the spoken word and the silence: Rockefeller used to be a depiction of the dedicated and quiet man that often characterizes the greatest men in the corporate world. He would not say much, but the necessary, as he once quoted: “My mother taught me that words can either help you or damage you, so does the silence. And this was also applicable to the business world”.

Rockefeller embraced this message and guided his own life. Deeply religious, he was a firm believer of the spiritual law that states: “Give and it shall be given unto you”, therefore, Rockefeller, from his early days to his dying day, always donated a portion of his income to charity.

His most remarkable donation to the industry was kerosene — cheap and affordable kerosene —. Before the funding of his company Standard Oil, people would light their homes with candles and would heat them with either coal. Rockefeller’s development, the kerosene, not only was much better, but also brighter and warmer than candles and coal. As he once quoted in 1885: “We are refining oil for the poor man and he must have it cheap and good”. He also left a legacy on how to run a business: Rockefeller would not ignore a single detail regarding his businesses. He would look at every detail with the goal of saving the customer’s money. He would also pay his employees well and rarely had labor problems. He reportedly would reward his engineers and chemists for their findings on how to get more kerosene out of a single barrel of oil. He was also an environmentalist — not only the greatest environmentalist of his age but the ultimate recycler —: other refineries would spill generous amounts of waste into the rivers, thing that would repulse Rockefeller. He believed there was a specific use for every single particle of oil. He determined himself to find out other uses for the waste once the kerosene had been removed. Thus, his team of engineers and chemists managed to find uses for the remaining components: gasoline as fuel tars for paving and other byproducts.

Imagine how hard it would have been for the automobile industry to come into existence without his legacy and the availability of cheap oil. He kind of teamed up with Henry Ford and his Model T by having the gas ready for it to work.

John D. Rockefeller also helped to create the middle class by having millions of Americans working in the oil related industry by the early decades of the last century. As he once stated: “We saw the vast possibilities of the oil industry stood at the center of it and brought our knowledge and imagination and business experience to bear in a dozen twenty in thirty directions”.

As a renowned philanthropist, Rockefeller supported several missions across the world, he would also support churches and different causes across the United States including colleges like the University of Chicago. He gave millions to medical research as well. After his death, he had given away US 550.000.000 to charity, more than any other American to ever live.

This business giant, just like other fellow American billionaires, continued to work until the passed away. He died in Florida at age 97 and the fortune, the one he donated, helped to shape America. Often seen as a greedy robber baron, it is important to mention that Rockefeller, since his first job, always donated a portion of his income: from the Baptist church he used to visit several churches. Moreover, as stated, he founded the Medical Investigations Institute — later went on to become a university —. He also disregarded any racial prejudice and went on to support black minorities by giving them access to education. He also looked after the poor by giving them access to health.

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Image courtesy of Thomas Hawk at Flickr.com

If America should learn one thing out of all the knowledge he left behind, it is that, as he stated near his death, that: “If your only goal is to become rich, you will never achieve it”. Instead, help those around you: give so that is given unto you.

Ken Griffin, a successful money manager

Kenneth Cordele Griffin is a hedge fund manager who was born in October of 1968 in Daytona Beach, Florida and grew up in Boca Raton, Florida, where he attended the Boca Raton Community High School.

While still at Harvard University, he started two investment funds in his dorm room, and between classes he would make transactions. He installed a special satellite link in his dorm room to obtain data from the market in real-time.

He got his first fund of $265,000 partly with his grandmother’s money, which allowed him to benefit from a market fall during the crisis of 1987.

In 1989, investor Frank Meyer, surprised by the success of Griffin and the return of his investments -which at the time were largely based upon convertible bonds- made a relatively small investment with Griffin, entrusting him with $1 million to invest.

Griffin exceeded Meyer’s expectations and, according to the New York Times, Meyer earned a 70% return with that investment.

When the news spread, investors became interested in backing Griffin.

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Image courtesy of Insider Monkey at Flickr.com

Griffin founded Citadel LLC, an investment firm based in Chicago, considered one of the largest and most successful hedge funds in the world. He’s earned thousands of millions of dollars for as long as he’s been in the company.

Citadel was founded officially on November 1st 1990 with $4.2 million dollars, and the name “Citadel” was chosen to suggest the strength of the company in times of volatility.

With $13 billion in managed assets, Citadel is one of the largest funds in the world and it’s daily volumes are approximately 3% of the traded average per day in London, New York and Tokyo.

Citadel grew rapidly, and the yearly performance has been over 20% since 1998.

Griffin uses his own quantitative and numerical skills within Citadel. The company has attracted mathematicians,  physics and engineers to act as investment analysts, using advanced computer technology and expecting a high level of confidentiality. Griffin avoided press coverage in a similar way to that of other high risk fund managers such as billionaire Steven A. Cohen.

Recently, Griffin has adopted a profile in the media which has been much more prominent, he has also spoken about his purchases of art, his charitable contributions and political interests in an interview with the New York Times.

He made headlines by purchasing a couple of artworks for $500 million. Two paintings of abstract expressionism were enough to drive the market of art crazy. The billionaire acquired the “Interchange” painting (1955) by Willem de Kooning and “Number 17A” (1948) by Jackson Pollock. The former cost about $300 million and the latter cost $200 million. Until then, the de Kooning belonged to the David Geffen Foundation, and it became the most expensive contemporary artwork in history, as reported by CNBC and Bloomberg.

It seems that Griffin is very passionate about art, since he had previously purchased the painting “Abstraktes Bild” by German artist Gerhard Richter for $46 million, and he donated $40 million to the Museum of Modern Art in New York.

With an estimate of $13 billion -compared to an estimate of $20 billion previously- in managed assets, Citadel is still one of the world’s largest hedge funds.

In 1986, Griffin became interested in investing after reading Forbes Magazine. After over 20 years, Griffin has appeared in numerous occasions in the Forbes 400 magazine, since 2008, and his fortune is estimated in $3 billion dollars.

In 2011, his fortune -as estimated by Forbes- had fallen to $2.3 thousand million and he was placed in position 512 among the richest people in the world.

His first appearance in the Forbes 400 list was in 2003, with an estimated net value of $615 million, at just 34, he was the second youngest person on the list.

In September 2004, Fortune magazine listed Griffin as the eighth richest American under 40 in the category of those who had amassed their own fortune in the United States.

In 2006, Griffin was the fifth youngest of seven members of the Forbes 400 list under 40.

In July 2004, Griffin married Anne Dias in Versailles. She is the founder and managing partner of Aragon Global Management, another firm of investment funds based in Chicago.

In 2015, Griffin donated $100 million to Harvard University. That same year his wife filed for divorce at a courthouse in Illinois. Media reports stated that his ex-wife demanded $2,500 a month for office supplies, $450,000 to go on vacation in the Caribbean, and $300,000 a month to travel on a private jet. Other figures include $12 million dollars a year to “maintain the status quo” as well as $160,000 a month in hotel expenses.

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David Tepper: from junk bonds to millions of dollars

David Tepper was born in September of 1957. He’s the head of the Appaloosa management hedge fund. He specializes in investing in companies that are going through financial difficulties.

Tepper grew up in a Jewish Family at Pittsburgh’s East End, specifically Stanton Heights. when he was younger, he memorized the statistics in the back of baseball cards, showing the first signs of a virtually photographic memory. He attended the University of Pittsburgh and helped pay his college studies by working in the library and developing an options trading system. He graduated with honors and received his Bachelor of Arts degree in economics.

After graduating, he ventured into the financial industry, working for Equibank as a credit analyst in the department of economy. In 1980, not quite satisfied with his position, he went to the Business School of the Carnegie Mellon University to continue with a master’s degree in Sciences of Industrial Administration.

Tepper was an exemplary student. He was known by asking all the difficult questions. After obtaining his master’s degree at 1982, he accepted a position in the Treasury Department the Republic Steel Corp. This gave him first-hand labor experience at a company with difficulties.

A couple of years later, in 1984, he started working as an analyst at Keystone Mutual Funds in Boston, and in 1985 he was recruited by Goldman Sachs. In just six months, Tepper became the best trader of Goldman and worked there for eight years. When the junk bonds bubble exploded in 1989, Goldman Sachs managed to stay afloat thanks to Tepper’s skills. He purchased the bonds of the banks that had been severely punished by the bubble. When these institutions got out of bankruptcy and the market recovered, his investments went through the roof.

He finally quit Goldman Sachs in 1992. Michael Price, an investment fund manager and Goldman Sachs client, lent him an office. Tapper then started negotiating aggressively all by himself, with the hopes of making enough money to start his own fund. He started by founding Appaloosa management with Jack Walton, another junk bonds trader at Goldman Sachs, in early 1993.

The fund started with 57 million dollars. In the second semester of 1993, his fund obtained a net earning of 57.6%. The  assets under his management went up to 300 million dollars at the end of 1994, 450 million at the end of 1995 and 800 million at the end of 1996.

One of his first investments was in Steel Algoma, who got out of bankruptcy in 1993. After studying the company, Tepper realized that the shares of Steel Algoma were really mortgage bonds. He purchased these shares at $0.20 each and sold them in a year from 60 to 80 cents. In 1995, his purchase of the Argentinian sovereign debt increased his fund in 42%. He came to the conclusion that the increase in bank deposits presaged a strengthening economy.

In 1997, since the Korean currency fell 50% due to the Asian financial crisis, Tepper acquired cattle futures and bonds of the Korean government. His fund obtained 30% that year.

He made quite an expensive mistake in 1998. He bet that the Russian government wouldn’t pay its debt, and unfortunately it did. His fund lost 30%. Since Russian bonds went down, Tepper kept on buying. When the market recovered, his position helped him obtain 60% in 1999.

In 2002, the junk bonds market plummeted again. His fund lost 25%. Tepper purchased the bonds of three big bankrupt companies: Enron, WorldCom and Conseco. The following year, these positions helped him get 148% in benefits.

From 2002 to 2003 his purchases of debt of public service companies with difficulties, such as Williams Co., also increased his profits. Around 2003, Tepper’s personal wealth went above a billion dollars for the first time. He donated $55 million for the Carnegie Mellon University Business School, encouraged by Kenneth Dunn, his old professor, who got to be the school’s Dean. Tepper accepted the suggestion but he suggested that the name of the school was changed to “David A. Tepper School of Business”.

In 2008, Tepper had a big loss once again: 200 million dollars in a failed offer to invest in Delphi, a provider of automobile parts that went broke. In 2008 he purchased preferential shares in Wachovia and Washington Mutual for $0.20. Later, these two companies were acquired by larger rivals and shot up the price of those preferential shares, thus increasing the value of Tepper’s investments.

In 2010, the New York Times reported that Tepper’s success turned him into the world’s best paid hedge fund manager in 2009, and in 2010 he was listed as one of the wealthiest people in the world by Forbes Magazine.

University of Pittsburgh
Image courtesy of Ronald Woan at Flickr.com

Tepper has also made great donations to the University of Pittsburgh, including several scholarships and support to create academic and college centers to execute community extension programs.

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