Warren Buffett and Bill Gates have nothing on Jacob Fugger, a German financier during the Renaissance who monopolized the silver business, became the banker of kings, convinced the papacy to legalize moneylending and paved the way for today's bond market.
At the height of his career in the 16th century, Fugger (rhymes with "cougar") accumulated a fortune amounting to a significant portion of Europe's economic activity. And, yet, few people have ever heard of him.
A new book about Fugger, "The Richest Man Who Ever Lived," includes the money lessons for investors. Below is an edited interview with the book's author, Greg Steinmetz, who is a securities analyst and former journalist in New York.
Q. What impact did Fugger make on the long-term world of money?
A. Before Fugger came along, Christians could not legally charge interest on loans. That's why the Jews were the moneylenders. It's in the Book of Luke that one should loan without expecting anything in return. The church enforced that.
Christian lenders such as the Medicis got around this by calling interest a penalty or handling fee. It made lending cumbersome.
Fugger said enough of that. He orchestrated a lobbying campaign with the Vatican. The pope came around and said if you are a lender taking risks, it is fair to charge interest.
Q. What money lessons can we learn from Fugger?