After the crash of 1929, most of the American public had lost faith in the stock market. Charles E. Merrill helped to rebuild the financial industry by taking a novel approach. He chose to finance like a supermarket, giving up pricey commissions to attract more volume in order to bring more people into the market. Born in Green Cove Springs Florida, he was the son of a drugstore owner who would end up creating the world’s largest brokerage firm. Merrill would try his hand at several professions including news work, law school, and even semi-professional baseball before becoming a professional financier.
In January of 1914, he started his own investment firm. In 1928, he foresaw the coming crash and advised his customers to sell their holdings. His company and those customers who took his advice were able to survive the crash of 1929. He provided free classes to educate people on investing wisely. He looked out for his customers first, and ensured that his employees understood and followed a strict code of conduct. This helped bring Wall Street out of what could have been a permanent or much longer collapse. Like all the entrepreneurs featured in this series, there is a lot of wisdom to be found in his life. The lessons apply equally to college students as they do to entrepreneurs and financiers.
`Having thousands of customers scattered throughout the U.S. is infinitely preferable to being dependent upon the fluctuating buying power of a smaller and perhaps on the whole wealthier group of investors in any one section,'' - Charles E Merrill
Merrill understood that, despite the popular conception at the time, it did not necessarily have to be only a few wealthy men who could contribute to the world of finance. A larger group of people pooling their resources through the firm could be just as, or even more, effective. At the time this was not something that had been considered. Merrill understood that finance was something that anyone could be involved in, even if their starting capital was humble. The lessons here are threefold.
- Having many customers or supporters in a venture is far better than only a wealthy few. A few on whom you must depend, and who will have power to impact you and your endeavors.
- The realm of finance is not the habitation of the wealthy alone. It is never too early to start investing. Do not be dissuaded by a small amount available to invest, it will grow over time, and grow faster than you think.
- Fortune fluctuates, but risk can be mitigated by spreading it out. By relying too heavily on any one group, person, or project, you are at far more risk than if you have it spread out over multiple avenues.
"I have no fear of failure, provided I use my heart and head, hands and feet - and work like hell." – Charles E. Merrill.
This was Merrill’s personal credo, and it should be yours. Failure is not the end of the story, or at least it does not have to be. If you are willing use your heart and your head, and, most importantly, “work like hell,” you can recover from almost any failure. Merrill understood that these components of clear thought and the willingness to work hard would lead him on the road to success. This applies to every venture and every career, not just finance. The fear of failure can be paralyzing, but if you approach it with this perspective, you will not only mitigate your risk of failing, but drastically improve the chances that you surpass your competition.
Merrill also was very clear on the value of working with people whose politics you dont share. Saying that
"If he wants their labor, let them go to work, without regard to politics." – Charles Merrill
This is a particularly important lesson in today’s polarized climate. You do not have to share the same political beliefs to work with someone. Your employees and partners do not necessarily have to have the same political beliefs as you, if you share a commitment to your company. This applies equally to college clubs (that are not political by nature) and to nonprofits. Having friends and colleagues with different views can also become a source of strength for a company, as it can for a person. Don’t be afraid to work with people you may have political disagreements with - especially if they are the right person for the job.
Charles Merrill understood that ethics, hard work and dedication were principles for continued success. Today Merrill Lynch is one of the most influential financial groups in the world. His life is another example of how dedication and hard work create value for yourself and the world around you.
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