💰 The Making of a Gilded Age Tycoon

Welcome back, Hard Knocks community! 💰 

We're here with another great session at the School of Hard Knocks where we keep you up to date on what’s going on in the business world, wisdom from today's top entrepreneurs, and key takeaways to apply in both your business and personal life.

Today’s Schedule

• The Making of a Gilded Age Tycoon: How J.D. Rockefeller Dominated the Oil Industry

• Free Game: Real Estate Mogul Eric Delgado Shares Entrepreneurial Secrets You Won’t Learn in School

• From the Hard Knocks Library: Learn The Principles of Success From Napoleon Hill

• In Case You Missed It: How Todd Nepola Created A Real Estate Empire

Let’s get into it!🔥

The Making of a Gilded Age Tycoon 💸

When you think of O.G. American billionaires, John D. Rockefeller is at the top of everyone's list. The oil tycoon caught lightning in a bottle with his company Standard Oil and he rode his success all the way to becoming one of the world's most iconic businessmen. 

Born in 1839 in Richford, NY, John was the son of a traveling salesman who quickly developed a hustle mentality himself. He spent his childhood earning money by selling candy, doing odd jobs for neighbors, and raising turkeys. John eventually went on to study bookkeeping at a commercial college.

At 16, John took a job as an office clerk for a commission firm in Cleveland that bought and sold commodities, like grain and coal. He took what he learned there and four years later in 1859, John and a partner opened up their own firm. By 1863, several other partners joined him in investing in a Cleveland oil refinery.

In 1865, John bought out some of his partners and took control of the refinery himself. Over time, he expanded the business and took on new partnerships. Along with his brother William and others, he founded the infamous Standard Oil Company of Ohio in 1870. John took on the role of president and was the company's largest shareholder. 

Standard Oil started to buy up its rivals and in 1882, it became the Standard Oil Trust. At one point, Standard Oil owned roughly 90% of the refineries and pipelines in the United States and was becoming a monopoly. They were a one-stop-shop and did everything from make their own barrels to put scientists on the payroll to create new uses for oil. 

In 1890, Congress passed the Sherman Antitrust Act, which aimed to put an end to monopolies. Because of the law, Standard Oil Trust was dissolved two years later in 1892. Afterwards, the trust was still able to operate as a holding company, but in 1911 it was ultimately broken up into over 30 separate companies.

J.D. Rockefeller is no doubt one of the world's most famous business leaders. Even though he's a mogul from over a hundred years ago, his business lessons are still relevant for entrepreneurs today:

Have a “Why” Greater than Yourself: Having a “why” was fundamental to Rockefeller's pursuit of wealth. His "why" was rooted in his devout religious beliefs. He believed his ability to generate wealth was a divine gift intended for the betterment of society. Because of this, throughout his life, Rockefeller directed his wealth towards philanthropic efforts. He donated over half a billion dollars to foundations and institutions in health, education, and social welfare. He had a reason beyond himself to create his billions. Rockefeller's commitment to this purpose shows why aligning your actions with a higher purpose can take you farther in life.

Cut the Fat: Standard Oil became a super successful business because Rockefeller used smart strategies to save money for the company and its customers. One way he did this was by vertically integrating the company. He controlled every step of making and selling oil. Instead of buying barrels from others, he made his own barrels using wood he owned. This made oil cheaper. For example, in 1860, a barrel of oil cost $9.59, but by 1890, for Rockefeller it was only $0.77! With these savings, Standard Oil could make more oil, and soon they were the biggest in the market. If you rely on other vendors to fulfil your product or service, look for ways in your business where you can bring that process in-house. It may save your business a ton of money in the long run.

Have Relentless Persistence: John D. Rockefeller never gave up on his goals. When he was a teenager, his biggest dream was to get a job at a good company. Even though it was hard to find work in Cleveland because lots of people were looking for jobs, he didn't let that stop him. After going to a short college program, he made a plan and aimed for big companies. Finally, he got a job at Hewitt and Tuttle, which changed his whole life. Sometimes it is hard to be persistent to get the things we want in life. Setting S.M.A.R.T. Goals can help you persevere through hard times:

1. Specific: Goals should be clear and specific, answering questions like who, what, where, when, and why. This helps in understanding exactly what needs to be accomplished. EX: "I will increase my sales performance."

2. Measurable: Goals should have a number so progress can be tracked and evaluated. Establishing measurable criteria allows you to determine when the goal has been achieved. EX: "I will achieve this increase by implementing a new sales strategy and dedicating additional time to prospecting and follow-up."

3. Achievable: Goals should be realistic and attainable within the resources and constraints available. They should stretch you slightly but still be achievable with effort and commitment. EX: "I will achieve this increase by implementing a new sales strategy and dedicating additional time to prospecting and follow-up."

4. Relevant: Goals should be relevant and aligned with broader objectives and priorities. They should matter and contribute to the overall mission or purpose. EX: "Improving sales performance is directly aligned with my career goals and will contribute to the success of the company."

5. Time-bound: Goals should have a deadline or timeframe for completion. This creates a sense of urgency and helps in prioritizing tasks and managing time effectively. EX: "I will accomplish this goal within the next three months, by the end of the current quarter."

   Putting it all together (Example): "I will increase my sales performance by achieving a 20% increase in sales revenue compared to last quarter. I will accomplish this by implementing a new sales strategy and dedicating additional time to prospecting and follow-up. This goal is relevant to my career aspirations and will be achieved within the next three months, by the end of the current quarter."

Words of Wisdom

Free Game

We met up with L.A. real estate mogul Eric Delgado. Throughout his career he has sold over $2.8B in real estate transactions, 125 hold and flip purchases, served over 3,100 families and made over $8million last year.

When we met up with Eric he shared with us some of the best lessons he has learned along the way. Here are our biggest takeaways:

Want to Own a G-Wagon?: Then stop buying depreciating assets. The best way for you to buy that luxury car or watch you have dreamed of getting is by buying cash flowing assets that can buy that item for you.

In the words of Eric Delgado "Buy a house every year for four years and rent them out. By the fifth year, you'll generate enough passive income to make the payments on your car. Think of it as your tenants making the payments." It’s 2024, we are buying assets not liabilities💰

Learn From Prior Success: Speaking of J.D. Rockefeller, Eric says the one book that changed his life was Rockefeller's 38 Letters to His Son. Eric loves Rockefeller for his ruthlessness in business and the way he was able to use his competitors to his advantage.

One of the best ways to get ahead in business and in life, is through mentorship. Those mentors don’t necessarily have to be alive and be sit down conversations, you can find business gems by opening a book and reading business advice from those who had success in business 100+ years ago.

Play Monopoly: Eric built his real estate empire using a simple strategy: buy assets, hold assets, take the income from those assets to build more businesses, rinse and repeat. 

If their is one thing we have learned from interviewing over 1000 millionaires it’s that they take the income they are getting from their career / assets and use that money to buy more income producing assets. Even if that asset only produces $100-$200/month everyone has to start somewhere, but put the money you have earned to work, so you can make more of it.

Understanding Leverage: According to Eric, the number one thing that separates people who succeed from the people who don't is leverage. At 15, he worked for a successful business owner who had everything managed by another person and all he would do is come in the office and chat for 30 minutes with his team then do whatever he would like for the rest of the day.

The reality is, you only have so much time in a day. If you want to become seriously wealthy, you need to outsource and bring team members in. Without the help of others it is very hard to scale a business to the 7+ figure mark. Outsource non revenue generating activities, so you as the operator can focus on scaling and making more money.

From the Hard Knocks Library

In Case You Missed It

Back in January we had the pleasure of sitting down with commercial real estate multi-millionaire Todd Nepola . Todd started out as a stockbroker in the 90's and at the age of 25 he invested everything he owned into his first commercial real estate property. After Todd acquired his first property he was hooked and went on to buy hundreds of millions worth of commercial real estate. In this podcast, Todd walks us through his early years/career and gives out the framework anyone can use to start investing in real estate. This episode is full of golden nuggets that anyone can apply to their life and journey as an investor.🔥

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