He lived at the same time as Christopher Columbus, Martin Luther, and Cesare Borgia. He was the personal banker of two Holy Roman Emperors. But most of all, he was the richest man of his time, and one of the richest men who ever lived, owning some 2 per cent of the known world’s GDP.
What are the lessons to learn from Jakob Fugger, the 16th century German banker? In “The Richest Man Who Ever Lived”, author Greg Steinmetz describes the factors that led to Fugger’s success. Some of them are still useful for those seeking to get ahead today.
- He got international experience at an early age
Fugger, born and raised in Augsburg, Germany, left his home before he was even 18 to do an apprenticeship in Venice, Italy. It taught him skills, such as accounting, a new language, Italian, and gave him a good network at an early age, as Venice in the late 15th century was the world centre of trade and finance.
What we can learn from it today: learning languages, going abroad, completing internships… These are elements that still count in today’s working world.
- He was meticulous about accounting
At a time when most of his competitors kept sloppy books if any at all, Fugger kept detailed accounts of his bank’s operations in the form of double bookkeeping. That was a novelty for the time. His bank had branches in a few dozen cities across Europe, and he made all of them submit a year-end balance, so he could himself compile a single statement showing all of his company’s assets and liabilities. It gave him a competitive edge, as he knew much better than others whether or not he could afford to give loans and at which conditions.
What we can learn from it today: Keep track of your personal finances. How many people forget to save or invest in their twenties, ending up with regrets later? Accounting discipline can give you an edge both in work and in life.
- He took a risk when no one else would
As a young banker, Fugger had little to offer over his competitors. But when the Archduke of Austria, Sigmund, desperately needed a loan, Fugger decided to offer it when no other banker would. Sigmund was known for squandering his money on women and feasts, and thus wasn’t exactly trustworthy. But he was creditworthy: after all, he was the Archduke. In return for the loan, Fugger sought and obtained control over the silver mine Sigmund owned. It paid off handsomely: with his disciplined approach, he made the mine into a profitable affair and catapulted himself to the Major League of German bankers.
What we can learn from it today: Dare to invest in your career at some point in your life, if you believe in your capacities and your ability to pay yourself back.
- He was loyal – but not foolish – and dared to push back
Fugger built his success on his lifelong alliance with the House of Habsburg and its members. First he lent money to Sigmund of Habsburg, then to Maximilian, Holy Roman Emperor, and finally to Charles V, the most powerful head of state of the Renaissance. He provided them with loans when they needed them, and in turn became their most prominent banker. In the end, he managed to make himself indispensable to them, becoming quite literally the Kingmaker of the Holy Roman Empire. But he wasn’t foolish or blind about the partnership: throughout, he made sure to demand fair returns and collateral, and he didn’t hesitate to use a plan B if he felt he might get exploited or get left out. He made sure he was always in control.
What we can learn from it: Look for a mentor, CEO or other senior person who can help you progress in your career and in turn pay back with loyalty. But make sure you never get taken advantage of, either. It has to be a genuinely win-win situation.
- He spent the first half of his career making money and the second half trying to keep it
Until he was about 40, Fugger was a bold, daring business man. He negotiated high-risk, high-return loans, aggressively expanded his bank network from Germany to all parts of the known world (including an office in Mexico), and made bets on the rise of individuals and their prevailing in European wars. It made him into the richest man of his time, and perhaps of all times. In the second half of his life, however, he took a more cautious approach. He still averaged some 7 per cent return per year with his investments, but that was considerably less than the multiple he had on some previous ventures. He focused on preserving wealth and influence, and in the end, on his succession.
What can we learn from it: Your thirties are really the time to make fast progress in your career. Your twenties you can invest in yourself, your thirties should get you on the fast track to where you stay in your fourties, and from then on you build a legacy. That is still very much true today.
Fugger’s story has many more lessons, even if all can’t be replicated today: after all, we don’t live in Renaissance Europe. But despite those caveats, Fugger’s story does have valuable lessons to learn. Applying them might not make you the richest man who ever lived; but turning to history could still help you to get ahead.
The Richest Man Who Ever Lived: The Life and Times of Jakob Fugger, Greg Steinmetz, 304 pages, Simon & Schuster, is on sale in bookstores and on Amazon
Author: Peter Vanham, Senior Media Manager, World Economic Forum
Image: A businessman walks past pillars in Tokyo. REUTERS/Yuriko Nakao