Frederick Smith Net Worth
Frederick Smith has an estimated net worth of $5 billion. A well-known American business magnate and investor, he is the founder, chairman, and CEO of FedEx Corporation. He earns most of his income from his business and investments.
Frederick Wallace (Fred) Smith had a revolutionary idea in 1971: deliver packages reliably overnight. Smith not only provided an alternative to the mail and more traditional and slower delivery services, but he also created an industry that almost single-handedly changed the way business was conducted. Smith’s company became the first in the United States to earn $10 billion in profits in the process. FedEx delivered to 210 countries in 2004 using over 600 aircraft, 46,000 vehicles, and 141,000 employees.
To calculate the net worth of Frederick Smith, subtract all his liabilities from his total assets. Investments, savings, cash deposits, and any equity he has in a house, car, or other similar asset are included in the total assets. All debts, such as personal loans and mortgages, are included in total liabilities.
Here’s the breakdown of his net worth:
|Net Worth:||$5 Billion|
|Monthly Salary:||$10 Million|
|Annual Income:||$200 Million|
|Source of Wealth:||Entrepreneur|
Fred was born on August 11, 1944, in Memphis, Tennessee, to a wealthy family. However, in 1948, when Fred was just 4 years old, his father passed away, leaving young Fred to his mother and uncles. Fred’s father was a self-made millionaire who owned, among other things, a chain of restaurants called Toddle House.
As a child, Fred was crippled by a congenital bone disease called Calve-Perthes disease, which meant he had to walk with crutches and braces most of the time, but by the age of 10 he had outgrown the condition and even participated in sports activities like basketball and football.
In 1962, Fred went to Yale University to study economics. While at Yale, Fred wrote a paper on the need for reliable overnight delivery in a computerised information age. His professor did not see the practicality of the system and replied to him, “The concept is interesting and well worked out, but to be better than a C, the idea must be feasible.”
This comment by Fred’s professor may have caused him to abandon the idea for many years. After graduation, Fred enlisted in the U.S. Marines and was assigned to serve in Vietnam. He served for three years, from 1966 to 1969, as a platoon leader and forward air controller. Fred admitted to receiving a different type of training during his time in Vietnam.
As a platoon leader, he was responsible for a group of boys from diverse backgrounds, most of whom came from lower class families. That experience helped him better understand them, their challenges, how they react, how to better motivate them to work, how to treat them fairly.
That knowledge served him well in founding and running FedEx, where every employee feels they own a part of the company. During his time in the military, he also observed the intricate procedures of military procurement and delivery, soaking up all the necessary information and details.
After leaving the military, Fred confessed that he was tired of blowing things up and would rather build something instead. His first business adventure was helping his stepfather run a struggling company that modified aircraft and overhauled their engines.
But logistical problems caused the company to fail, forcing Fred to rethink his idea of an overnight delivery system.
On June 18, 1971, Fred founded Federal Express with his $4 million inheritance, and between 1971 and the end of 1972 he raised $80 million in equity and investments. With 14 Flacon20 jets, Federal Express began service in 25 cities, delivering small packages and documents.
Business was slow at first (the company delivered just 186 packages the first night), but things soon picked up and FedEx was turning a good profit. But suddenly the tide turned and the company lost money as the cost of aviation fuel rose rapidly.
In two years, Fred had lost more than $27 million, and the company was on the verge of bankruptcy. Fred desperately tried to keep FedEx afloat, even going to Las Vegas to play blackjack with the company’s $5,000. He eventually won $27,000, which he used to pay the company’s fuel bill.
Thanks to his persistence and tireless efforts, Fred managed to raise another $11 million, which helped the company survive the difficult times. Soon the company began to make a profit again. In 1976, it recorded a profit of $3.6 million, and in 1980, a profit of $38.7 million. Since then, the company’s profits have steadily increased.
Currently, the company delivers over 9 million packages each business day. The lessons Fred learned during his military service have played an important role in the company’s overall success.
He makes sure every employee feels they can share in the company’s success and insists that managers treat their employees appropriately. Managers are evaluated by both supervisors and employees to ensure good working relationships at all levels. FedEx pilots are among the highest paid and best compensated in the industry.
2 Success Lessons From Frederick Smith
1. Treat them fairly, and they will move mountains for you
I have a friend who once worked in a place where 70% of the employees would set the establishment on fire if given the chance. Why? Because, not only are they not treated fairly, they do not feel like they have a stake in the establishment; profit or loss, it makes no difference to them.
UPS was the biggest rival to FedEx, during one of its strikes, FedEx was swarmed with close to a million extra packages. Thousands of FedEx workers, who had already completed their shifts, voluntarily poured in to help sort out the packages.
At the end of the strike, FedEx had increased its share of the express transportation market to more than 43%. FedEx workers felt like they own a part of the company, so they didn’t mind that they were off duty or that it was some minutes before midnight, they came in and moved mountains for their company.
Learn to appreciate your workers, they may have flaws here and there, but appreciate their effort all the same, for one day, your own ‘UPS strike day’ would come, and those workers would either make you or break you.
2. Only you can see it…
Only you can see it, that’s why it is called a dream. No one else can see your dreams as clearly as you, they can only try to imagine it, but it would never be so clear to them.
When Fred submitted the paper on FedEx to his professor, the professor, despite how knowledgeable he was, could not see what young Fred was seeing, hence, he concluded it was impossible. Never be discouraged when other people say your dreams are not ‘feasible’.
Of course, your dream may need a little adjustment here and there, but never shove it away completely because of what people say. Keep at it, remembering that Fred’s professor said FedEx was not feasible, but today, over 9 million packages are transported daily.
Frederick Smith Quotes
A manager is not a person who can do the work better than his men; he is a person who can get his men to do the work better than he can.
Leaders get out in front and stay there by raising the standards by which they judge themselves – and by which they are willing to be judged.
A lot of the economy is indeed being supplied by goods that are produced offshore. And much of the reason for that is societal.
Leadership is simply the ability of an individual to coalesce the efforts of other individuals toward achieving common goals. It boils down to looking after your people and ensuring that, from top to bottom, everyone feels part of the team.
I do not believe I could have built FedEx without the skills I learned from the Marine Corps.
If you look historically, what creates growth and wealth is innovation and investment, and increase in scale – more customers.
Every time we make an investment decision at FedEx, we ask ourselves: ‘What is the return on this investment?’
Beginning in 1973 and then acts in ’77, ’78, 1980, 1994 and then into the 21st century in the international arena, governments have steadily gotten out of the transportation business.
View our larger collection of Frederick Smith quotes.
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