What J.P. Morgan, Mark Cuban And Warren Buffett's First Jobs Taught Them About Wealth Building

J.P. Morgan, Mark Cuban, and Warren Buffett are rightly regarded as financial titans, but these three men came from different backgrounds. Benzinga looks at their first jobs and how the experience impacted their wealth-building strategies.

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J.P. Morgan, Born into the Business

When John Pierpont (J.P.) Morgan was born in 1837, it was clear that his future lay in the family business. Morgan's grandfather Joseph was a Revolutionary War veteran who also became a co-founder of the AETNA insurance company. Joseph's son, Junius, followed him into banking business when he was only 15. J.P. joined the family business after graduating from the University of Gottingen in 1858. 

By then, Junius was living in London and a partner at merchant bank George Peabody & Co., which had a New York subsidiary known as Duncan, Sherman, & Company. This role equipped Morgan with a vast network of banking contacts on both sides of the Atlantic, not to mention a wealth of experience doing deals of all sizes. J.P. then partnered with Philadelphia banker Anthony Joseph Drexel to form Drexel Morgan & Co.

The House of Morgan

Drexel Morgan & Co. was big enough to loan the U.S. government $65 million during the Great Panic of 1893. After Drexel's death, it became J.P. Morgan & Co., by which point J.P. was financing many of America's biggest industries, including railroads. His knack for pooling private investor contributions to fund large businesses was so ubiquitous it became known as "morganization." He's one of the financiers who helped birth the "private equity" sector. 

At the peak of his powers, Morgan bought out steel magnate Andrew Carnegie and formed U.S. Steel, which was the world's first company to achieve a $1 billion market cap. However, Morgan's gift for eyeing and funding good deals didn't end there. The "House of Morgan" financed dozens of businesses, which include General Electric, Western Union, General Motors and AT&T.

It's not a stretch to say that America's financial industry would not exist in its current form without J.P. Morgan. He was born into a family of great bankers, and he likely relied on that generational wisdom when closing some of the biggest deals in the history of American business. His first job was in international finance. That experience, and his father's wisdom, left Morgan well-prepared to become a legend. 

Warren Buffett

Warren Buffett learned valuable lessons from his stockbroker father, all while being exposed to the common sense and cultural ethos that typifies the Midwest. His first job as a paperboy was not nearly as glamorous as J.P. Morgan's stint at George Peabody and Co., but it was just one of many hustles for Buffett. He supplemented his newspaper income by selling his own horse racing tip sheet.

After moving to Washington, D.C. with his father (who had been elected to Congress), Buffett and a friend made money buying used pinball machines and refurbishing them. He eventually sold the business for $1,200, which is a great profit on the $25 he spent on the first pinball machine. Buffett continued making investments throughout his high school and college career before graduating with almost $10,000 (over $120,000 today) in the bank.

The Oracle of Omaha

The rest of Warren Buffett's investing career has been even more successful. His strategy for picking winning stocks and making money for his investors has earned him the nickname the "Oracle of Omaha." According to Bankrate, Buffett has generated an average annual return of 19.8% for Berkshire-Hathaway shareholders since 1965. 

Buffett still lives in Omaha and enjoys a notoriously simple life. Unlike many other members of the billionaire class, Buffett is not known for ostentatious displays of wealth like yachts, cars or closed-door shopping sprees at Louis Vuitton. Despite his success, he is the same humble Midwesterner with a paper route who is always on the lookout for good deals.

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Mark Cuban Was Hustling from The Beginning

Long before Mark Cuban shot to fame as the tech titan who sold Broadcom and bought the Dallas Mavericks NBA Franchise, he was showing his propensity for generating wealth. According to GQ magazine, Cuban's adventures in wealth building started quite by accident. He happened to ask his father for money to buy a new pair of shoes while his father was in the middle of a poker game with friends.  

At this point, one of Cuban's father's poker buddies offered Mark a proposition. The friend had a large supply of garbage bags he needed help getting rid of. He offered to sell them to Cuban for $3 per box and allowed Cuban to keep the profits of any of the bags he sold. The enterprising young Cuban sensed an opportunity. He began offering an on-demand garbage bag delivery service to his neighbors and sold his bags for $6 per box. 

Cuban's experience giving people direct services became an essential part of his business strategy. In the nascent days of the Internet, Cuban and his university buddy Todd Wagner started a website called AudioNet to broadcast basketball games in Indiana directly over the Internet. When they added video technology to the mix, the company became known as Broadcom, which Cuban eventually sold for about $1 billion in cash and stock options to Yahoo.  

The Takeaway for Everyday Investors

Mark Cuban, J.P. Morgan and Warren Buffett's first jobs were all different. Yet each of them learned lessons from those jobs that still serve them well today. The common theme is that they learned how to recognize deals with upside. Most investors would be well-served by adopting a similar mindset, even if it doesn't lead to them becoming moguls or titans.

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