#402 Thomas Peterffy: The $80 Billion Founder Who Automates Everything

**David Senra** (0:00)
Before, a few days ago, I didn't know who Thomas Peterffy was, and I was shocked to learn that he's 81 years old, he's worth $80 billion, and he's built his $120 billion company, Interactive Brokers, into one of the most efficient companies in the world. So, for example, in 2024, they generated $3.7 billion in profits on just $5.2 billion in revenue. And I discovered Peterffy by reading this incredible profile about him that was written by Colossus, and I actually couldn't put it down, and immediately called my friend Patrick, who's the founder of Colossus, and I told him that I wanted to make an episode on Peterffy's incredible life story. So that is what this episode is about. I want to get right into the profile, which will be linked below, and is written by Dom Cook. And so Dom writes, I'm at the $108 million Aspen house of Thomas Peterffy. Once inside, I find Peterffy hunched over his chair. His piercing eyes look up at me in confusion as I was introduced. I thought we were doing this over Zoom, he said. My stomach dropped. Where have you come from? He asked. London. That's crazy, he said, as if I'd come by boat. To a man who has spent the past 60 years automating as much of his business as possible, to the point where Interactive Brokers has 71% profit margins, my journey to meet him was an absurd misallocation of resources. Peterffy is the 23rd richest person in the world. He pioneered automated trading and built one of the largest options market makers on earth. He is the reason that you can trade stocks in your pajamas. His second act, Interactive Brokers, is worth over $100 billion dollars. I was surprised that he was surprised that anyone would travel to hear his story. He settled down in his chair and began to explain how he got his start in life by dragging a metal bathtub through the rubble of post-war Budapest. I was born during a Soviet bombing raid, Peterffy began. It was September 30th, 1944, and the Red Army was pushing into Hungary. He remembers nothing until he was five, by which time Hungary belonged to the communists and his father had vanished, having divorced his mother and fled the country when Peterffy was two. I often remember my mother crying and I'd ask mom, why are you crying? And she'd reply, we're going to starve to death. And she was dead serious about that. At school, Peterffy had no hope, but his grandmother's library had survived the war. And through the 19th century French classics written by Bolzac and Hugo and Zola, he learned about capitalism. I always wanted to make some money because we didn't have any, he said. At 12, he went into business with a classmate who returned from Austria with packets of gum. Peterffy took out a knife, cut each stick into five pieces, and worked the schoolyard until they were sold. The principal, upon hearing about his venture, confronted him. Where is your communist conscience, he said. A year later, he was organizing platoons of children to hunt for metal in bombed out buildings. 70% of Budapest had been hit during the war, and Hungary desperately needed steel. Signs throughout the capital offered to buy scrap by the pound. Once we found a humongous metal bathtub, which was incredibly heavy, it took eight of us all afternoon to drag it to the way station, but we got a lot of money for it. When Peterffy was 21 through what he called a series of very, very lucky mistakes, he managed to secure a short term visa to West Germany on the premise of visiting distant relatives. From there, he walked into the American Consulate and applied to immigrate. When the papers came through, he bought a one-way ticket to New York City. Each month throughout his childhood, a letter had arrived from America. This letter was from his father. Peterffy paid little attention to the words. What interested him was the envelope, and in particular, the green stamp showing the Statue of Liberty. America had those stamps for something like 30 years, he said. That was extremely effective advertising. On December 12, 1965, he landed in New York. He remembers a building in the middle of the street. It was the New York General Building, and it straddled the avenue as cars moved under its arches. He learned why it was there. The New York Central Railroad had dug beneath the avenue to lay the railway. Then they used the space above to build its headquarters.
For a young man who had grown up in a world defined by limits, the building was proof that in America, someone could take an established system and simply build over it. He soon found work at a highway engineering firm earning $65 a week drawing roadmaps. He spent his days converting surveyor's field notes into highway drawings, plotting elevation changes, sight lines and banking angles for new roads.