On May 27, 1794, Thomas Jefferson opened his window, as he did every morning, at his home at Monticello and recorded the weather. It was clear and 58 degrees. Also, that year, George Washington was the sitting President, and Cornelius “Commodore” Vanderbilt was born into humble circumstances on a small farm on Staten Island, New York. At the age of 11, he decided to quit school to work on the docks to earn money to help the family.
In 1810, he borrowed what little money his parents had to offer and purchased his first boat which he used to ferry passengers between Staten Island and Manhattan. It wasn’t until two years later that his business took off during the War of 1812. He was able to grow his business and purchase new boats when the government hired him to supply military outposts in the area.
These years provided him a first-hand education in how to operate a business. He eventually sold his fleet of boats and took a job as a steamship captain learning the steamship business before setting off on his own to start a steamship company.
He was a shrewd businessman who controlled passenger traffic by cutting fares while providing higher-quality service. He eventually expanded into the railroad business.
Cornelius Vanderbilt is one of history’s great entrepreneurial and business stories, and there is much to learn from him. But, like the rest of us, Vanderbilt was not perfect. You can, however, learn as much from his flaws as you can from his business savvy.
Here are the pros and cons of Cornelius Vanderbilt’s personality and characteristics that you can learn from:
Pros:
- Visionary and willingness to expand.
It requires a certain amount of foresight and courage to have a vision, especially in regard to an entrepreneurial enterprise or means of generating and preserving wealth, and then take that vision and turn it into an empire. - Ability to manage his risk tolerance, invest money carefully, and see through high-risk behavior.
Vanderbilt was a pioneer when it came to expanding his businesses and making calculated moves with railroad and steamship company executives. It was a highly risky endeavor, but a business he understood from the ground floor up. In reality, he was fairly risk-averse and addressed risk in unfamiliar pursuits with a careful, if not skeptical eye. He was wary of the ease with which credit was handed out, untrusting of the new breed of Wall Street speculators, and uncomfortable with economic volatility abroad and the rapid overexpansion of railways to the West. Instead, he focused on what he knew and what he could manage. - Seized opportunities when they presented themselves.
Vanderbilt recognized opportunities and seized them. For example, during the War of 1812, he made his fleet of boats accessible to the government to ferry troops and supplies at a cost. - Worked harder than everyone else.
Vanderbilt was self-made and built his empire through sheer hard work. But it wasn’t just putting in the long hours. He also took the time to learn the businesses he pursued and mastered each craft while learning how to provide the best service for customers. He was a true student of business. - Understood the value of building strong relationships with suppliers and customers.
Vanderbilt was known for providing customers with service that was more luxurious and cheaper than the competitors who found they simply couldn’t compete with him. He was also very loyal to his suppliers which helped him build strong relationships.
Cons:
- Did not treat his workers well (low pay, long hours).
Vanderbilt was notorious for poor treatment of his workers, including low pay and not improving working conditions despite having the money to do so. - Neglected his family for his work (zero work/life balance).
He was known as a lousy father and also a misogynist who paid little attention to the needs of his daughters leaving them far less in his will than he did his three sons. This was not the best approach in terms of preserving generational wealth. - Did not teach his heirs the importance of managing money (Vanderbilt empire collapsed).
Cornelius did not teach his heirs the importance of managing money and like so many other fortunes in history, the Vanderbilt’s empire eventually collapsed. Vanderbilt’s descendants enjoyed the excesses that their wealth could buy including large homes, expensive art, and other luxuries.
Consider consulting a financial professional
The name “Vanderbilt” is associated with large mansions, a stellar university, and a family history of success and extravagance. However, you don’t always want to read a book solely by its cover. Yes, Cornelius Vanderbilt’s legacy has much to offer regarding good characteristics and business practices, but also attributes that you may not wish to emulate. Consider consulting a financial professional who can help you determine which of his traits could work best for you and your financial goals.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Sources:
The First Tycoon (washingtonpost.com)
Leaders, Innovators, and Railroad Barons: Cornelius Vanderbilt (steelmuseum.org)
How The Vanderbilts Blew Their Fortune And Went From American Royalty To Flat-Out Broke (ranker.com)
Cornelius Vanderbilt | Biography, Facts, & Robber Baron | Britannica Money
Cornelius Vanderbilt - Biography, Children & Facts | HISTORY
Cornelius Vanderbilt - Biography, Railroad Industrialist
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