George Soros is rightfully considered one of the wealthiest individuals of modern times. His influence extends even to global political processes, which has led many to accuse him of various sins. He has founded numerous funds operating worldwide and is renowned for his highly successful investments. How did Soros achieve such success?
Brief Biography
Soros, an American financier of Jewish descent, was born in 1930 in Hungary. He grew up in a modest family. Although his parents did not leave him a substantial inheritance, they imparted several important lessons. His mother, Elizabeth, instilled in him a genuine passion for creativity and the arts, which helped him develop creative thinking. This ability to see opportunities that others missed contributed significantly to his future success. Soros’s father, a lawyer, was exiled to Siberia during World War I. During the fascist occupation of Hungary, he forged documents for Jewish community members, saving many lives.
Later, Soros reflected that his father taught him an invaluable lesson through his example. He learned that the ability to take risks is crucial. Those who avoid risk may lose everything, including their lives. This idea helped Soros become the person he would later be. With his sharp mind, excellent memory, and unconventional thinking, Soros mastered four languages.
During World War II, George had to hide in attics and basements to avoid being killed by Nazi soldiers. This was not surprising given Hungary’s large Jewish community and the significant efforts of German forces to find and eliminate people of this ethnicity, whom Hitler despised.
In 1944, George migrated to the United Kingdom. Just a year later, after the defeat of German forces, he returned to Hungary to resume his schooling. However, his time in Britain had made him fall in love with the country and realize that Western Europe offered better chances for success.
In 1947, at the age of 17, Soros moved to London. The money his father gave him quickly ran out. To survive, the future billionaire worked as a porter, waiter, painter, and even as a farm laborer.
At 19, Soros enrolled in the London School of Economics, graduating two years later. During this time, he read “The Open Society and Its Enemies,” a book that greatly influenced him. Soros realized that the ideas in this book could be used to become wealthy, and he was particularly drawn to investment business.
Soon, Soros found a job at a bank where he began earning money by buying and selling shares in gold mining companies. He enjoyed this work, although he did not become wealthy quickly. In 1956, Soros decided to migrate to the United States, believing that he would achieve greater success in the investment business there.
Moving to New York
In New York, Soros secured a position in a business center through a colleague’s recommendation. He soon engaged in currency arbitrage. Gaining experience, Soros joined a larger firm in 1963 that invested in foreign markets. His experience and excellent knowledge of several foreign languages were significant advantages in securing this position.
Soros believed that although the economy operates by clear “laws,” it is still highly subjective and unpredictable. After all, behind every action are specific individuals who are sometimes guided not by reason but by emotional impulses.
Interestingly, in the 1960s, there was no global information network or quick access to data. Therefore, Soros later admitted that he sometimes falsified data to maximize profit, as verifying its accuracy was impossible. Soros understood that businessmen try to profit by predicting risks and events. By falsifying data, he gained considerable profit.
Offshore Funds
In 1967, Soros persuaded his superiors to create several independent funds and allow him to manage them. Within two years, he was in charge of two funds with $250,000 to manage as he saw fit. Thanks to his connections, he managed to attract an additional $6 million. He also gained access to funds from wealthy Arabs. Interestingly, the funds were registered in an offshore zone, allowing them to avoid taxes.
Soros began to make money by buying and selling shares in Europe and Japan. During the 1970s economic crisis, many companies went bankrupt. However, the funds Soros managed not only survived but also increased their capital. For example, in 1976 and 1977, the value of the funds nearly doubled, while the Dow Jones index fell by 13% during that period. In 1979, the fund earned over $100 million from the fall of the British pound. At that time, British bonds were in high demand. Soros first bought them for nearly a billion dollars and then sold them. Soon, the currency value plummeted.
Soros’s work earned him respect and authority from financiers worldwide, as well as substantial capital. By 1980, his capital was approximately $100 million.
However, Soros also faced setbacks. In 1981, the value of his fund’s securities dropped by 23%, marking the first year without profit. Nonetheless, by 1982, the share price increased by 53%, causing regret among investors who had withdrawn their funds.
Soros understood the importance of adapting to new conditions and economies. In 1983, he hired a new fund manager, Jim Rogers. Under Rogers’s leadership, the assets began to grow rapidly. Soros managed about 50% of the investments, allowing him to focus on other activities, such as traveling.
Rises and Falls
1985 was a pivotal and successful year for Soros’s Quantum Fund. The fund’s value increased by 122%, from $450 million to $1 billion. Soros himself earned over $90 million.
One memorable event involved Japanese currency. On September 22, Soros bought several million bonds. The next day, the dollar fell against the yen, and Soros managed to earn about $40 million overnight.
Through another currency deal, Soros earned the reputation of being the man who broke the British banking system. In 1992, he took a $10 billion position against the British pound, resulting in a profit of over $1 billion. However, the value of the British currency significantly decreased.
By 1993, Soros became one of the wealthiest people in the world, with a personal fortune exceeding the combined finances of 42 UN member states.
But in 1997, Soros faced a series of failures. He bought shares in a Russian company while working with businessman Vladimir Potanin. However, the 1998 crisis led to a devaluation of the shares. Soros sold them, incurring massive losses. If he had waited a bit longer, he could have sold his assets at double the price to recover his costs. Unfortunately, his intuition failed him this time.
In 1999, the fund lost nearly a billion dollars. There were rumors that Soros had lost his touch and was no longer fortunate. However, Soros did not give up and continued to attract new investors, investing heavily in internet technologies.
Initially, this strategy yielded some results. The fund’s value reached $10 billion. But a series of events led to significant losses, and Soros realized it was time to close the fund, abandon “big deals,” and focus on writing books and philanthropy.
In 1979, Soros established the Open Society Foundation, which focuses on charitable activities. The foundation funds projects in education, healthcare, and civil society. It also operated in Russia. However, many criticized its work. For instance, there were cases where talented scientists were taken abroad to work for U.S. interests. It is difficult to expect someone who considers Russia “enemy number one” to act in the best interests of our country!
Soros’s funds are believed to have been involved in organizing “color revolutions” in Ukraine, Georgia, and other countries. The foundation’s work is banned in Austria, and an operation is underway against all Soros foundation institutions in Turkey. Interestingly, Soros is one of the few businessmen who profited from Britain’s exit from the EU.
Soros’s activities raise many questions. Who is he? A talented financier or someone behind a shadowy global government? Only speculation remains. However, it is undeniable that Soros’s experience can be valuable to anyone who wants to learn how to invest wisely and manage their finances effectively!