Introduction:
Starting mid-June 2023, Methods of Prosperity was deployed. To become a billionaire, one must first be conditioned to think like a billionaire. To that agenda, this newsletter, which goes out every Thursday morning, studies remarkable people in history who proved what to do (and what not to do).
The following is Methods of Prosperity newsletter number 1.
As of February 29, 2024, original subscribers have received up to issue number 37.
Why this newsletter? You may be wondering. For me personally, keeping relationships alive over a significant duration of time hasn’t come naturally. In order to adjust, this serves three purposes:
1. to maintain relationships
2. to share ideas that serve to increase prosperity
3. opportunities are starting to emerge that you may want to know about
For a roadmap, let’s start with a brief history of wealthy people and discover what we can apply to our modern lives. For this first module, we’ll go back in time to the transition from the middle ages to the Renaissance. My reasoning for starting here is that the circulating currency was a predecessor to the first global reserve currency.
What’s salient during this time is the evolution of debt, with respect to the understanding of how to use it effectively. Namely, the advancement of systems for deferred settlements. This wasn’t the first time in history that deferred settlements had been used. Tang and Song dynasties of 7th century China invented promissory notes. Going back in time as far as ancient Mesopotamia, or counting Hammurabi’s Code as the first ledger of debits and credits would be too exhaustive.
As a point of departure, studying people who earned their wealth is more useful than studying royalty or unfair players in this game of extraordinary wealth creation, because if they can do it, so can we. There is one caveat, however.
While most of the characters in this series are entrepreneurs, there will be exceptions. For example, we will discover how Mansa Musa collapsed Cairo’s economy in the fourteenth century. The reign of Charles V during the Habsburg Dynasty is another exception. Fast-forward to the 20th Century, when Bernard Arnault and the Koch brothers inherited their father’s businesses (generational wealth).
Part 1. The Medici Family
After breaking free from their feudal overlords during the eleventh century, northern Italian cities of Florence, Venice, Genoa, and Pisa established themselves as city-republics. By the year 1252, the Florentine mint struck the first Fiorino d'Oro, or gold florin.
A single florin was worth more than a week of labor for the average worker. A stable florin was a monumental building block towards a formal system of credit, but forming a monetary system was incumbent on more than just an unwaveringly consistent coin purity. It demanded a culture of promises.
What kind of promises? Promises like a letter of credit. In creating debt, the buyer’s bank promises to pay the seller’s bank at a fixed time after a purchase is made. This practice was formalized by the bank of Medici.
The Medici family originated from the Mugello region of Tuscany, Italy, and were first mentioned in a document in 1230. They rose to power during the Renaissance period and played a significant role in shaping the cultural, political, and economic landscape of Italy.
Next week, we’ll get into how a singular merchant class family became the financial backers of the Catholic church, and significant patrons of the arts.
–Sean Allen Fenn
