|
If you’ve ever been afraid of losing your money, this story of Ulysses S. Grant will particularly interest you. Grant was the victorious Northern General in the Civil War and later, twice elected President of the United States. But late in life, he made a catastrophic financial mistake.
Prior to his success in the military, Grant failed as a farmer, a real estate agent and in the leather business. But when he left the Presidency in 1877, he was one of the most respected men of his time and he went on a two year world tour.
In 1881, his son Buck (Ulysses S. Grant, Jr.) formed a Wall Street investment firm with Ferdinand Ward, who made an impressive appearance and was hailed as the “Young Napoleon of Finance,” because he was such a bold investor. From Ward’s initial investments, Grant & Ward seemed to be a success.
Because of this success; the 59 year-old former President proudly invested nearly all of his money in the firm. Many investors assumed Grant, Sr. was the “Grant” in Grant & Ward and they too invested their money.
In 1884, Ward publicly announced that the rapidly growing firm had mushroomed in size to $15 million (about $320 million in today’s dollars) and Grant thought he had become a very wealthy man.
Then one day, Ward shocked Grant when he urgently came to him and said the firm had a dire but a “temporary emergency.” To solve the problem, Ward urged Grant to immediately borrow $150,000 (about $3.2 million in today’s dollars) from his friend William H. Vanderbilt, one of the wealthiest men of his time, and deposit the money in the firm.
Grant did so and pledged all of his assets to Vanderbilt as collateral. Meanwhile, Ward grabbed the funds, bankrupted the firm and fled.
It turned out what Ward had done for years was to take new investors’ money, pocket a big piece for himself to support a lavish life-style, then pay old investors a high percentage of the remaining funds as a return on what were actually non-existent investments. Today, this is called a “Ponzi Scheme” after the 1920’s con man, Charles Ponzi.
By the time Ward was arrested, the money was gone. He would serve over six years in prison, but Grant was broke and his reputation was severely damaged.
Vanderbilt offered to forgive the loan but Grant would not allow it. He sold his home and everything else he owned to pay Vanderbilt, but he was still deeply in debt. At that time, there was no pension for retired Presidents so Grant desperately looked for a way to support his wife and himself.
To pay-off his debts and to generate an income, Grant’s friend Mark Twain convinced him to write his Memoirs.
However, Grant had long been a cigar smoker and was soon diagnosed with fatal throat cancer. Knowing he was in a race against time, Grant wrote from early morning, into the night seven days a week, refusing to take pain medication afraid it would dull his senses. Soon after completing his manuscript, Grant passed away at the age of 63.
What happened next is more stunning than when Ward conned Grant.
Twain published Grant’s Memoirs and they were such a success, that Grant’s family received over $450,000 (about $9.5 million in today’s dollars). This was a much greater fortune than Grant had ever possessed and it made his family financially secure, as Grant had hoped.
Incidentally, those Memoirs are still in print today and are widely considered to be some of the best ever written.
Success Tip of the Week: As Grant did, it is still a common practice for people to invest in what’s hot. Today, the hot ticket is real estate. May I suggest that before you write a big check for any investment, you do your homework and invest unemotionally. This prudent step could save you a lifetime of savings.
In the next KazanToday, If you’re trying to think of an exciting new idea, this is the story of an entrepreneur who thought of a great new product over breakfast that is now saving thousands of lives.
|
