7 money-making lessons from the richest man who ever lived

Jacob Fugger was a German banker who financed kings, explorers, bishops and popes — and along the way made the biggest fortune ever amassed by a business person.

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The grandson of a peasant, he persuaded Leo X to legalize for-profit lending. One of his money-making schemes provoked Martin Luther to write the 95 Theses and kick off the Reformation. He played kingmaker in the 1519 election for Holy Roman Emperor. Jacob (Jakob in German) Fugger and his money gave the vote to Charles V of Spain and put Charles atop an empire as big as Napoleon’s.

Fugger was worth about $400 billion in current dollars at the time of his death in 1525 — or 2% of Europe’s GDP at the time. (John D. Rockefeller was close in dollar terms, but his wealth equaled a smaller part of the U.S. economy.)

Here are some of his secrets:

Invest when others fear. Fugger made two massive bets that secured his fortune. The first was to bankroll Archduke Sigmund of Tyrol when it looked like Venice was going to take over the duchy. The dukes’ usual bankers refused to finance him. Fugger came forward and offered everything he and his friends and family could pull together. The duke settled with Venice. In return for his backing, Fugger locked up the concession for the largest silver mine on earth.

Fugger also invested in Hungarian copper mines when others feared a Turkish invasion. By going against the grain, he sewed up the copper business just like he had the silver business. The Turks eventually arrived — but only well after Fugger’s death.

Be indispensable. Too big to fail isn’t a modern invention. Fugger knew all about it and used it to insulate himself from monarchs who could have reneged on their loans without consequence. Fugger had something he knew his borrowers couldn’t live without: The ability to conjure up huge sums in an instant. Borrowers liked neither Fugger nor his terms. But they couldn’t live without him.

Know the facts. Fugger understood the value of good information. He created the world’s first news service and used it find out about market-moving events before others. Emperor Maximilian (the grandfather of Charles V) once told the banker that Henry VII had shipped him some gold as collateral for a loan to fight the French. Fugger refused the deal because his spies in England told him the ships never left port.

Know the numbers. The Italians invented double-entry bookkeeping. Fugger was among the first north of the Alps to use it. He advanced the craft by creating a consolidated balance sheet for his many businesses. He was also the first to send auditors into the field to check on branch activities. His ledgers show margin scribblings in his own hand asking questions about specific expense items.

Get a good education. Fugger spent several years as an apprentice in Venice, the business capital of its day. He gained knowledge, experience and connections that served him the rest of his life.

Keep cool. An Austrian bishop was one of the biggest depositors in his bank. When the bishop died in 1509, the pope demanded that Fugger immediately pay the money to the church. Fugger’s money was tied up in the mining projects and he lacked the liquidity to honor the demand. The withdrawal — or even rumors of the withdrawal — would have ruined him. Rather than hunker down, he spent lavishly to make it seem he was never more liquid. This gave him time to quietly negotiate the deal that saved him.

Give something back. Fugger is best known as the creator of the Fuggerei, the world’s first affordable housing project. He thought anyone who worked deserved to have a roof over their head. Rent came to one quarter the market rate. The Fuggerei remains in operation and is the largest tourist attraction in his home city of Augsburg.