The House of Morgan by Ron Chernow Summary

Key takeaways:

• Make a business that can run without the help of investors. Maintain 100% ownership.
• Once you have money, invest in other businesses that need investors.
• “A man always has two reasons for the things he does. A good one and the real one.” — JP Morgan
• Don't talk too much. Everyone should reduce their talk by 2/3.
• The Rothchilds heavily influenced the Morgans. The Morgans wanted to have a familial dynasty like theirs.
• JP Morgan bank was like an exclusive high-class club for the wealthiest people. They didn’t do ads or marketing.
• Handshakes over cigars. Settle everything behind closed doors. No lawsuits.
• The banks gained their power when businesses were in financial trouble and needed money to keep going. This allowed the banks to get high-rate loans or ownership.
• Rockefeller and Carnegie both didn’t want the banks to have control over them. They both chose to rely on the revenue of their businesses rather than investments from bankers. Rockefeller and Carnegie were successful (partially) because they didn’t need money from a 3rd party. They were financially sound.
• As CEO, know all the business financials yourself. If you delegate, get daily reports on the financials. Personally audit the books at least every year.
• Chernow was in his late 30s when writing this book.
• This was Chernow’s first book. Before this, he was a freelance journalist.
• He researched and wrote an 800 page book in 2.5 years. He says this was a feat he could never duplicate.
• PT Barnum and JP Morgan are the 2 biggest names in early American business history.
• JP Morgan was constantly bedridden and sick but the doctors could never figure out why.
• JP was not for free markets. He wanted controlled markets, where the government sets the prices of goods.
• JP Morgan had a huge nose due to a skin condition. He was insecure about it.
• JP Morgan was religious but had many affairs.
• Teddy Roosevelt and JP Morgan were rivals
• JP Morgan thought stock trading was “vulgar.”
• JP Morgan was the embodiment of power and purpose. When walking down the street, he would not move out of the way of anything or anyone. He would walk directly to his destination.
• The banking industry has changed a lot since JP Morgan’s time. It is now much more difficult to start a bank. One way to get the benefits that he had in today’s world could be to get into angel investing, venture capital, or acquisitions. This would require you to build a personal brand (so entrepreneurs will want to do business with you) and have excess capital (from a previous business venture). Find an industry you’re passionate about or skilled in, then start a business. Once successful, use extra money to invest in or acquire other companies.
• JP Morgan initially made money through underwriting, financing, and advising on corporate M&A.
• JP Morgan got its initial money from customer deposits, borrowing (from the Fed), and issuing securities (like stocks and bonds).