On This Day In Finance: July 17 - America's First Millionaire Is Born

By Joseph Nguyen | July 17, 2009 AAA
On This Day In Finance: July 17 -  America's First Millionaire Is Born

Born on July 17, 1763, John Jacob Astor made a fortune as a major fur trader and became the richest man in his era, and the United States' first millionaire. John Jacob was born in Waldorf, West Germany but moved to England when he was only 16, and subsequently moved to New York City in 1784, just after the Revolutionary War had ended. In New York, he started his own business and eventually became a leading fur trader in North America by 1800.

Astor was smart and motivated. His knowledge allowed him to reach new markets and expand his monopoly on fur trading. For example, Astor's knowledge of the Jay Treaty between the United States and Great Britain allowed him to take advantage and move in quickly to secure the markets in Canada and the Great Lakes region. Astor also traded goods such as teas, sandalwoof and furs with China, which proved to be especially profitable.

Astor had become a prominent member of society, and in 1808, with the permission of President Jefferson, he created the American Fur Company with the subsidiaries Pacific Fur Company and the Southwest Fur Company. In addition, Astor's operations benefited from a new protectionist law passed by the U.S. Congress in 1817 that banned foreign merchants from the U.S.

By 1834, demand had fallen for fur and Astor decided it was time to focus on a new area he was interested in: Manhattan real estate. Astor had amassed a fortune of several millions of dollars from his fur trading activities, but recognizing the urbanization trend from farms to cities, Astor began purchasing real estate all across New York. Although he made substantial profits, he famously quoted that "could I begin life again, knowing what I now know and had money to invest, I would buy every foot of land on the island of Manhattan." Astor wasn't the only one to profit from appreciating real estate though, others who made a fortune in New York real estate include Peter Goelet, the Lorillards, and the Rhinelanders. (Owning property isn't simple, but there are plenty of perks. Find out how to buy real estate in our article, Investing In Real Estate.)

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