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Comprehending nine-figure sums.

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Feb. 3rd, 2013 | 05:20 pm

Too many zeroes to fit in my brain.

I think I mentioned in a prior entry that I'm currently reading this biography of Andrew Carnegie. It is enormous and super comprehensive and I'm almost done. This morning I reached the chapter when Carnegie finally retired and sold his majority stake in the giant web of steel, coke, mining, transport, and various other companies he'd built up for decades (he reached that point by undertaking a lot of sketchy activities that later became illegal but that's not what this entry is about). His payout was $226 million. I feel I should type out all of the digits: $226,000,000. And this was in 1901, when that amount would buy you much more than today. Try as I might, that's an amount I can't quite fathom in any century. We currently earn right about what is the supposed US median household income, though in a city with higher-than-average costs, so my finances are pretty simple and I don't anticipate owning more than one piece of real estate at a time in the next couple of decades.

Everything Carnegie did as described in the book was so large as to be almost unfathomable to me. If you've never seen photos of it, this is Skibo, his Scottish estate. According to the Nasaw biography, he mostly dismantled the original "castle" because it was too small, it's on 40,000 acres, and he had a golf course, a lake, and a salmon ladder (and and and!) installed on some of those acres. So much that I can't comprehend, and yet his expenditures on this, his New York mansion, worldwide travel, and a sizable household staff were such a tiny sliver of his fortune; he aimed to give the rest away. It leads me to wonder that if I ever accumulated or inherited a large amount of money what I'd actually do; hopefully something with impact and not just paralysis that resulted in it sitting in the bank. I doubt that I'd want the ostentatious stuff he had, but who can really speculate? Fortunately it's pretty unlikely that I will become crazy wealthy. :)

When I was working in my first job after graduating college, I had my first experiences in trying to understand what large sums of money could do. My boss had been tasked by one of our more generous funders* with writing proposals for programs the institution could implement if awarded an amount that had eight figures. Not having such experience, she asked her boss for help in scoping these proposals, and I recall they had some intriguing back-and-forths. We didn't receive the award in question after all, but were later asked to apply for and received another low seven figure per year grant, which became my major project for close to three years and with which we were able to achieve a great deal. And this work experience was my first indication that I didn't know what I didn't know: that very large amounts of money need significant management (well, unless you don't care and just feel like spending and showing off), and that one can do much more than simply accumulate a lot of stuff.

One of the people that helped me puzzle through how to manage both the actual budgets and funders' expectations was a long-time development staff member there. Her best piece of advice is one that I still think of and benefit from today: "the Golden Rule of Foundations is: He who has the gold, rules." ** So essentially, even if I didn't agree with the funders' choices on how to manage our program, it wasn't useful to fight them tooth-and-nail because at the end of the day, it was still their money. This was a woman who funneled millions at a time to our workplace, again a job I could not even begin to understand how to do, but she was savvy enough to know that reaching out to staff way down the totem pole would help the success of the whole effort.

Anyhow, all of this is to say that I am enjoying the book, and it is taking me longer to finish than it otherwise would because it has brought up so many of these tangential thoughts. Primary among these is how much work Carnegie had to put into managing his financial fortune, especially when he aimed to become the ultimate philanthropist and had to wade through thousands of requests for $ to fund what he considered worthwhile.

* I won't name the foundation because my former co-workers still work on grants from them, but it is a fairly old one founded by a wealthy family not too unlike Carnegie that built an enormous company in the early 20th century.

** And lots of other things. It's a popular quote you have likely heard before, and appears to be widely attributed to so many different people as to make its actual source unknown. At least that's what the Internet tells me.

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