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Today the world’s richest person is Jeff Bezos, the CEO of Amazon.com. His net worth is reportedly $160 billion. However, his wealth is less than half of the richest person in history. That title belongs to Jakob Fugger (1459 – 1525), who in today’s money had a networth of $400 billion.
Here are five things to know about Jakob Fugger, also known as Jakob the Rich.
He has his grandmother and mother to thank for the family business
Jakob’s grandfather Hans grew up as a peasant, but moved to the German town of Augsburg in the year 1373, where he started a business buying and selling cloth. However, the key to the early fortunes of the Fugger family was that the grandfather had married Elizabeth Gfatterman, the daughter of a leading townsmen. When Hans died in 1408, Elizabeth took over the business and ran it for the next twenty-eight years.
Jakob Fugger the Elder was the next person to handle the family business, but when he died in 1469, control went to his wife, Barbara Basinger. Like her mother, Barbara would be in charge for twenty-eight years, including managing the younger Jakob and ten other children.
When Jakob was a teenager he was sent to Venice to be an apprentice and learn the skills of commerce in the wealthy city. This would include banking and bookkeeping, knowledge that he brought back to Germany.
Mining, Banking and other businesses
By the late fourteenth century the family business had been expanding, and moving into new ventures. They took an interest in mining projects in Austria, where silver mines were particularly lucrative. Moreover, the family started supporting various local rulers with loans, including the Hapsburg family. With the rise of Maximilian I to the position of Holy Roman Emperor in 1508, Jakob and his brothers found themselves as the bankers to elite of Europe. At times this posed challenges, as some rulers were spending too extravagantly to repay their debts, but the Fugger family could find ways to get their money back through collateral and new deals.
The family did invest in other ventures – for example, they set up an office in the Portuguese city of Lisbon to get involved in the trading of spices and other luxury goods. There is even some records that seem to show the Fuggers loaned 5,400 ducats for Ferdinand Magellan’s expedition that circumnavigated the globe.
The Key to Jakob’s Success
According to Greg Steinmetz, in his book The Richest Man Who Ever Lived, Jakob Fugger would see his business grow massively through his connections and his ability to be a financier.
“Fugger had a remarkable talent for investing,” Steinmetz writes. “He knew better than the rest how to size up an opportunity and where to park his money for the best return at the least risk. He knew how to run a business and make it grow and how to get the most out of his people. He knew how to exploit weakness and negotiate for favourable terms. But perhaps his greatest talent was an ability to borrow the money he needed to invest. With what must have been enviable charm, he convinced cardinals, bishops, dukes and counts to loan him oceans of money. Without their support, Fugger would have been rich but no richer than the others at the club. The fund-raising – and with it the courage to risk debtor’s prison if he couldn’t repay – explains why he went down in history by the name of Jakob the Rich. Financial leverage catapulted him to the top.”
He took control
Jakob had elder brothers who were just as important to Fugger fortunes, but he outlived them all, leaving Jakob to run the company on his own. He became an important figure in European politics, who could use his money and influence to hire armies, start or stop wars and bankroll the Hapsburg Dynasty. He even created his own news service so he could be up-to-date on market and political information. Historians have called it the Fugger News Letters, and in many ways they resembled newspapers before they came into existence.
The wealth of Jakob Fugger can be seen in the grand home he built for himself in the years 1512 to 1515. The Fuggerhäuser, located in the centre of Augsburg, was four stories tall and constructed in the latest Renaissance style. It reportedly had water fountains and fireplaces or ovens in every room. The building is still owned by Jakob’s descendants.
Defender of Capitalism
In 1508 Emperor Maximilian I attempted to force his bankers to invest in bonds to support another of his wars. Fugger was furious at this, and wrote a letter back to the Emperor. Steinmetz explains:
Fugger started with what he said was obvious. Companies like his benefitted every level of society, producing jobs and wealth for all. Business could only work its magic if the government left it alone. If politicians threw up roadblocks and killed the profit motive, business had no chance. Merchants and bankers were good citizens, he argued. They treated each other and their customers fairly. Sure, self-interest propelled them. But they knew better than to cheat customers. Reputation was everything and the need for credibility checked the urge to lie, gouge and steal. Hinting at the allure of tax havens (the Swiss border was only sixty miles away), he declared that other countries show businessmen more respect. He blasted those who condemned commerce and enterprise. They failed to understand that “it is for the common good that honourable, brave and honest companies are in the realm. For it is not disreputable but rather it is wonderful jewel that such companies are in the kingdom.”
It is no surprise that when the German Peasants’ War broke out in 1524, that wealthy men like Jakob Fugger were accused by the people of corruption and stealing from the poor. At one point during that year Jakob had to flee his home in Augsburg because of the threats from protestors. Fugger did all that he could to support the nobles trying to put down the revolt, which would only end after 100,000 people were dead.
When Jakob Fugger died on 30 December 1525, he bequeathed the company to his nephews, leaving them with the assets worth 2,032,652 guilders – a study done in 2016 estimates that the current value of that fortune would be around $400 billion US, or 350 billion euros. The Fugger family has carried on, with several branches still existing – some are nobility, others own business, and a few castles are still under their ownership.
Top Image: Portrait of Jakob Fugger by Albrecht Dürer, from the year 1518