Wealth breeds wealth

Thanks to Amazon’s success, CEO Jeff Bezos is the richest person in the world, worth $207 billion, according to the Bloomberg Billionaires Index.

It’s an impressive accumulation of wealth, but it’s good to remember that it began with his parents’ investment of $245,573 back in 1995.

The equivalent of nearly half a million dollars in today’s money.

At the time, Bezos told his parents that it was “very likely they’ll lose their entire investment in the company.” Despite the warnings, his parents invested anyway.

The message here:

Wealth breeds wealth.

Jeff Bezos built Amazon into the behemoth it is today, but he also had parents willing to back him with a considerable amount of money that they were willing and able to lose if his company failed.

The same holds true for college students who graduate with little or no debt. Sometimes with a car or pile of cash. These are young people who begin their adult life with an enormous financial cushion.

I’m not belittling their achievements, I’m quite sure that hard work was required to succeed, but the advantages that wealth brings someone starting out in life or launching a business are astronomical.

This is why I prefer the stories of the bootstrappers. The people who launched their business absent friends and family investments. The students who put themselves through college by working like hell while learning like hell. The ones who had to find their own way through life on hard work, wits, and sacrifice.

If your bills were paid and you didn’t need to work while attending Harvard or Yale, it’s not exactly a surprise that you graduated. Of course you achieved academic excellence. Given your enormous privilege, it’s what you were supposed to do.

Contrast that to Todd Graves and Craig Silvey, founders of Raising Cane’s Chicken Fingers, a fast food chicken restaurant with more than 600 locations worldwide and second only to Chick-fil-A in the average sales per restaurant.

Graves and Silvey worked as bartenders and cooks throughout college to help pay for their tuition, living in squalor at times to make their dreams come true. When their business plan for Raising Cain’s Chicken Fingers – written as an assignment in one of Silvey’s college classes – was rejected numerous times by potential investors, Graves earned the money needed to launch their first restaurant by working as a boilermaker in a refinery in California while Silvey fished for sockeye salmon in Alaska.

Both jobs paid exceptionally well. Both jobs were especially dangerous. Most important, neither Graves nor Silvey had any experience doing either job. But they knew that these were the kinds of jobs that paid large sums of money in short periods of time. They required employees to work shifts of 12-18 hours a day, 6-7 days per week, but if you wanted to accumulate a pile of money relatively quickly, these jobs were ideal to the task.

In a little more than a year, Graves and Silvey had earned enough money to convince a bank to fill the needed gap in their financial plan with a small business loan.

This is the kind of success story that I adore.

I’ve known so many extraordinary people over the course of my life – intelligent, hard working, clever human beings who were fully capable of building great businesses and making their dreams come true but could not because they were born into poverty. Immigrated to this country and lacked the generational wealth to support them. Grew up in an environment of addiction and abuse. Did not speak English.

These were folks who would’ve done quite well in college but never had the opportunity because they needed to support family members or feed and house themselves. They were people who didn’t have a chance because they didn’t speak English well enough or were discriminated against because of their race or sex. They came from broken homes and dysfunctional families who could not offer a leg up.

Jeff Bezos was a white, straight, American man working at a hedge fund when he decided to accept a large investment from his parents in order to launch a business.

Is it surprising that the business became the largest in the world?

Absolutely.

Am I surprised that his business was ultimately successful?

Not really.

It was supposed to happen. It would’ve been surprising if it hadn’t.