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The financial crisis in 1987 turned an accountant into the richest person in human history with an asset block of more than US $600 billion

April 01, 2020

Leveraging the financial crisis, Rockefeller from an accountant became the richest person in human history with a fortune of over US $600 billion.

The Covid-19 epidemic is creating serious impacts on business and production, socio-economy around the world. Millions of employees lose their jobs, company closure status, mass bankruptcy that takes place everywhere. So how can entrepreneurs survive, even make use of the crisis to move forward?

 

look out for opportunities in all difficulties, turning bad circumstances into lessons, skills or money / ph: Pexels@Kehn Hermano

 

Andy Grove, former Intel CEO once said: “When the crisis happens, weak companies will die, the good company exists, and the great company will grow stronger.”

Here is the lesson from a normal accountant staff who became the King of petroleum, the richest billionaire in the history of mankind – the legendary Rockefeller.

John Davison Rockefeller (1839 – 1937) was an American industrial capitalist who played an important role in the petroleum industry in primitive age, the founder of Standard Oil. According to Forbes, Rockefeller was considered one of the richest people in history with assets equivalent to approximately over US $663 billion (USD value calculated in 2007)

Before entering the petroleum business, John D. Rockefeller was an accountant and a non-name financial investor in Cleveland, Ohio, USA. His father was a crime , an alcoholic and neglect of family. In 1855, at the age of 16 he began to work and every day he earned 50 cents.

In 1857, a serious financial crisis affected the entire United States. The crisis began in Ohio and the city of Cleveland was particularly seriously affected. Companies were bankruptcy, the price of rice paddy was slope down in the country, the development of expansion to the West was stopped. The result was a heavy stagnation lasting many years.

Rokerfeller was probably also very scared. This was the worst market downturn in history and it happened just as he recently started to succeed. He was able to withdraw from the financial sector and find a less risky job. Although being still young, Rockefeller had a very calm, unshaken spirit despite pressure. He remained calm when encountered failure while others were confused.

So instead of lamented, blaming the crisis, he still actively observed important events. He chose to see it as an opportunity to learn, a first challenge for himself on the marketplace.

He silently accumulated money and paid attention to consider the mistakes others made. He has seen the weaknesses of the economy that many others consider to be natural that lead to their lack of preparation for fluctuations.

He drawn himself an important lesson and this lesson has followed him for the rest of his life: the market is always hidden of unexpected and often harsh elements-only based on reason and discipline can hopefully earn profits. He realized that the speculativeness led to disaster and that he needed to keep away from the crazy crowd to prevent from being thrown away by that crowd.

He immediately applied these perception to reality. At the age of 25, a group of investors offered a capital of about 500,000 USD for him to sought for the appropriate oil wells for the investment. Considering this to be a good opportunity, he made a survey to the neighboring petroleum regions.

However, few days later he had made the investors surprise when returned to Cleveland with his white hands,  not spending or investing a dollar. He realized that the real chance had not yet come, even though the petroleum market was so overheating at that time – so he refunded the money and did not participate in the field of oil drilling.

 

Should not fluctuated by the economic crises, by the attracveness of false opportunities, or aggressive competitors / ph: Pexels@Skitterphoto

 

The strict to himself and the objective spirit helped Rockefeller to gain advantages from all obstacles to other obstacles in life, both during the Second World War and in the Crisis of 1873, 1907 and 1929. With that spirit, he can see opportunities in all disaster. Also we can see that he has obtained strength to resist temptation or agitation in all circumstances.

In the first 20 years of the crisis, Rockefeller has alone controlled 90% of the petroleum market. His greedy competitors went to bankruptcy. His worrying colleagues sold out the stakes and moved on to another jobs. Cowardly investors have missed the opportunity.

During the remainder of his life, the more severe the crisis happened, the more calm Rockefeller was, especially when others were panic or too greedy. Much of his career was made up of market crises because he could see opportunities that others could not see. This perception today embodied in the famous maxim of Warren Buffett: “Be scared when others are greedy and be greedy when others are scared.” Rockefeller, as well as other talented investors, was able to resist the impulsive feeling and always retain the cold alertness.

One commentator who is very admire Rockefeller has described his company – Standard Oil as “Having miraculous transformation”, which can solve all efforts and defeat competitors. He has a persistence character, knowing to adapt to circumstances, calm and discerning. He was not fluctuated by the economic crises,  by the attracveness of false opportunities, or aggressive competitors.

All of those things were accumulated from a whole learning process. And he learned it from the 1857 crisis that he called “lessons from adversity and hardship”.

To Rockefeller, he could look out for opportunities in all difficulties, turning bad circumstances into lessons, skills or money. When properly perceived, everything that happens whether the economic crisis or personal tragedy are opportunities that help for progress.

 

 

*The above content was quoted from the book “Obstacle Is the Way” by Ryan Holiday

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