The merchant of death is dead

Alfred Nobel, the inventor of dynamite, rose from his bed one morning to read his own obituary. 

He did not like what it said. To his dismay, the obituary was headlined, “The Merchant of Death is Dead.” It sounds more lyrical in the original French, “Le Marchand de la Mort est Mort.” 

Nobel held 355 patents and had accumulated a vast fortune in the arms business. The obituary in the French newspaper was not kind. “Dr. Alfred Nobel,” it announced, “who became rich by finding ways to kill more people faster than ever before, died yesterday.” Of course, the obituary in the Paris newspaper was a mistake. Alfred Nobel was still very much alive.  It was not Alfred who had died; it was his brother, Ludvig, who had passed away in Cannes in the year 1888.

It is said that the cutting rebuke of the false obituary inspired Alfred Nobel to change his future legacy and in so doing change the future of the whole world. Nobel had invented dynamite in 1867. It had many useful applications, but it was also used for war. He had naively hoped that the invention might prevent war.  

“My dynamite will sooner lead to peace than a thousand world conventions,” he prophesied. “As soon as men will find that in one instant, whole armies can be utterly destroyed, they surely will abide by golden peace.”  

It was not to be so in Nobel’s lifetime or after his eventual demise. War became deadlier.  

Mark Twain’s death was falsely reported not once, but twice. After the first, he is reported to have quipped “the reports of my death are greatly exaggerated.” After the second, Twain would publish an article in Harper’s Weekly humorously asking “such journals and periodicals as have obituaries of me lying in their pigeonholes, with a view to sudden use some day,” to forward them to him in New York so that he could edit them, “not for facts, but their verdicts.”  In much the same vein, Nobel set out to change the verdict of history. When he died in 1895, he left his entire fortune in trust to fund annual prizes in chemistry, physics, literature, medicine, and, most notably, peace.   

The Nobel Prizes have been awarded annually since 1901. Famous recipients include Albert Einstein, Teddy Roosevelt and Martin Luther King Jr. One obvious lesson of this tale is that it is never too late to change your life and your legacy. Each of us has the power to change our futures. Ask yourself what you would like your obituary to say about you and then shape the rest of your life to make that happen. One thing you can do to improve your legacy is to be a wise investor. When Alfred Nobel passed away in 1895, he left the foundation around $8 million.   He instructed that “the capital, converted to safe securities by my executors, is to constitute a fund, the interest on which is to be distributed annually as prizes.”  

What fascinates me is the money. When Nobel dies in 1895, he leaves 94 percent of his estate valued at 31.5 million Swedish kroner, or a little over $8 million, to the Nobel Foundation. That isn’t much money. Sure, 8 million is still a tidy sum today and was an even tidier sum in 1895, but compared to the great industrialists of the era, it is pocket change. Railroad Tycoon Cornelius Vanderbilt was worth around 175 million upon his death in 1877; Andrew Carnegie $485 million; and John D. Rockefeller around $1 billion.  When JP Morgan died in 1913, he left an estate of $68 million. Andrew Carnegie remarked, “and to think he wasn’t even a wealthy man.”

Nobel is remembered not for the vast fortune he accumulated, but for the way he put that money to work after his death. The Nobel Foundation distributes the income from the trust annually to prize winners in five categories. The first prizes were not awarded until 1901.  Not surprisingly, Nobel’s heirs contested the will. They wanted the 8 million for themselves. It is doubtful they would have done as well with the money. Over the years, the prize committee has awarded millions of dollars to the winners. In fact, this year alone, the total prizes will exceed 50 million kroner, more than the entire value of Nobel’s estate.   

In 1901, the bulk of the foundation assets were invested in gilt-edged bonds. Today, the portfolio is largely invested in the stock market. Despite giving away millions of dollars over more than a century, the Foundation’s assets have grown to almost half a billion dollars. That is the magic of compounding over time. None of us have 100 years to invest.  But each of us has the rest of our lives. You would be surprised how much your personal assets can grow over the rest of your life if you follow Nobel’s strategy.