How High School Dropout Berry Gordy Turned An $800 Loan Into Motown Records And Massive Fortune

Berry Gordy, the founder of Motown Records, is a man who perfectly embodies the American Dream. After dropping out of high school, he unsuccessfully tried to launch a career as a professional boxer. Boxing fizzled fast. But Berry was undeterred. Within just a few years, Berry had managed to pick himself up by the bootstraps and was on his way to becoming one of the most successful record executives of all time.

His Motown empire was, quite literally, built from nothing. Berry's seemingly never-ending ability to find and mentor young musicians into chart-topping superstars has resulted in an enduring musical legacy. This same talent for finding talent also made Berry a very wealthy man. How wealthy? As of this writing, Berry's personal net worth is $400 million.

Berry's life and success should be inspirational to absolutely everyone out there dreaming of making it big, especially if you're starting from scratch. This is the story of how a young man from Detroit, with next to nothing going for him, changed the American musical landscape forever.

Berry Gordy / Theo Wargo/Getty Images

From Boxing Gloves to Songwriting

Berry Gordy was born on November 28, 1929, in Detroit, Michigan, the second youngest of eight children.  His family was very close and everyone worked hard to become prominent citizens in Detroit.  Berry had other plans, however.  He wanted to be a boxer.  The lure of fame and fortune that boxing offered was too difficult to resist.  Much to the chagrin of his family, he dropped out of high school his junior year, and set out to make a name for himself on the amateur boxing circuit.  For the next five years, he attempted to make a go at the sport but did not have much luck.  In 1950, he was drafted by the US Army to fight in the Korean War.  He left Detroit for Korea and hung up his boxing gloves at the same time.

By the time he returned to the US in 1953, Berry had given up on the idea of a boxing career totally and was instead interested in pursuing a career in music.  He opened a record store near his childhood home that was exclusively dedicated to jazz. He also began writing his own songs.  The record store went under, and like most men and women of working age in Detroit, he attempted to secure a job at the local Lincoln-Mercury plant.  At the same time, his family's prominence in the community came to his rescue.  An introduction to a local club owner led to his meeting singer Jackie Wilson.  Mr. Wilson went on to record "Reet Petite," a song that Berry Gordy co-wrote with his sister Gwen and writer-producer Billy Davis.  The track was a hit overseas and a moderate success in the US.  That was all Berry needed to stir up a little heat and attention in the music biz.  Over the next few years, he would go on to write several more songs for Jackie Wilson, one of which became a #1 hit.  He then began writing for other artists, including Etta James. As Berry racked up a few modest hits, he had a very important revelation. It seemed clear to him that there was a very specific sound missing from the musical landscape at that time. At this moment, Berry decided to shift his focus to producing.

$800 Loan Births An Empire

Between 1957 and 1959, Berry produced tracks and albums for a number of up-and-coming artists, including "The Miracles," led by a young musician named Smokey Robinson.  Smokey knew a good thing when he saw it and encouraged Berry Gordy to think bigger.

In 1959, with an $800 loan from his family, Berry launched Tamla Records, an R&B label.  The first track released by Tamla was Marv Johnson's "Come to Me."  It was a success.  "Bad Girl" by The Miracles was released the same year under Gordy's second label, Motown, and proved to be a success as well.  He soon merged Tamla and Motown into the Motown Record Corporation in late 1959 and then set out to take over the airwaves.  Within the first decade, Motown had grown to nearly 500 employees and was pulling in $20 million annually.  In today's dollars, that's nearly $215 million per year.

Motown's Golden Era: A Hit Machine Unlike Any Other

Over the next couple of decades, Motown released hit track after hit track, introducing American audiences to an amazing array of music artists, including:

• Mary Wells
• The Supremes
• Marvin Gaye
• Jimmy Ruffin
• The Temptations
• Stevie Wonder
• Martha and the Vandellas
• The Commodores
• Gladys Knight & the Pips
• The Four Tops
• The Jackson 5

The name "Motown" also became synonymous with a particular type of music and artist.  Everyone who came out of the Motown stable had massive cross-over appeal.  Though his roster of talent was largely African-American, Berry Gordy's artists performed everywhere and were popular with both white and black audiences in the US and abroad.

Ruthless Control

Berry Gordy didn't just sign artists—he crafted them. At Motown, talent alone wasn't enough. Gordy believed that to break into mainstream America, his artists needed more than great voices—they needed flawless presentation, discipline, and crossover appeal. To achieve this, he controlled every aspect of their image, training them like elite athletes preparing for the big leagues.

Motown artists went through an intensive finishing school—formally called "Artist Development"—run by Maxine Powell, a former modeling instructor, and choreographer Cholly Atkins. Powell drilled artists on how to walk, talk, and carry themselves in public, ensuring they radiated class and sophistication. Cholly Atkins choreographed every dance step so that performances looked sharp and polished. No flailing arms, no uncoordinated movements—everything was precision and perfection.

Gordy also controlled their behavior offstage. He banned swearing, lateness, and unprofessional conduct. He monitored their diets, dictated hairstyles and wardrobe, and even had strict rules on how they addressed the press. If an artist broke the rules, they weren't just scolded—they were punished. Some were pulled from recording sessions, while others were temporarily benched from touring.

His tough love approach worked. Thanks to his discipline, Motown artists transcended racial barriers, winning over white and Black audiences alike. Gordy's rules created superstars, but they also frustrated some artists, including Marvin Gaye and Diana Ross, who later clashed with his tight grip over their careers. But in the end, Motown's polish and discipline set it apart, making it one of the most successful and enduring labels of all time.

Hollywood Calling

By the early 70s, it was clear the label needed to expand. Berry launched the Los Angeles-based arm of Motown, putting himself on the map right away by producing the Oscar-nominated film, "Lady Sings the Blues," starring Diana Ross.  He then went on to produce other hit films, including "Mahogany," "The Wiz," and the now cult classic, "The Last Dragon".

Along the way, he continued to sign and nurture more great musical talent, including:

• Rick James
• Lionel Richie
• 98 Degrees
• Erykah Badu
• Boyz II Men
• El DeBarge
• Johnny Gill
• Teena Marie
• Brian McKnight
• The Pointer Sisters
• Queen Latifah
• Tony! Toni! Toné!

Berry Gordy / Jemal Countess/Getty Images

Cashing Out

In 1988, Berry decided to sell his interests in Motown Records to MCA and Boston Ventures.  The sale was finalized in June of that year for $61 million.  That's $160 million in today's dollars. Subtract his initial investment in the label, and he made an astonishing $60,999,200 profit.  🙂

Berry also sold his interests in the Motown song catalog controlled by his subsidiary, Jobete Publishing. The catalog contained 15,000 songs, 240 of which he wrote himself. Berry Gordy Jobete Music Co. to EMI Music Publishing through a series of transactions between 1997 and 2004. Here's a breakdown of the sales:

• 1997: Gordy sold a 50% stake in Jobete to EMI for $132 million.
• 2003: He sold an additional 30% stake for $110 million.
• 2004: Gordy sold the remaining 20% stake for $80 million, giving EMI full ownership of Jobete's catalog.

In total, Gordy received $322 million for the complete sale of Jobete Music Co.

The Motown label still exists and has changed hands multiple times.  After many years as part of other labels, it reemerged as its own entity under The Island Def Jam Universal Music Group in 2011.  Its main offices are now in New York City.

The Legacy

Berry Gordy has gone on to publish a successful book about his life titled, "To Be Loved."  He has been inducted into the Rock and Roll Hall of Fame and the U.S. Business Hall of Fame and received honorary degrees from Michigan State University and Occidental College.

In 2013, he became the first living musician to receive the Pioneer Award from the Songwriters Hall of Fame.  He's widely recognized as one of the most indelible influences on the American music scene.  He changed how artists should be treated.  He broke down barriers regarding where artists could play.  He introduced the world to some of the most successful musicians of all time.  He utterly altered American musical taste.

He's also a high school dropout, a failed pugilist, and a Korean War vet.  The next time you are questioning whether you will ever find success – remember Berry Gordy.  He's living proof that success is a matter of doing the best with what you have.  Keep that in mind, and at age 84, you too might have over 100 #1 hits to your name and be worth $400 million.

Anecdotes About Berry Gordy & Motown

A $3.19 Investment That Launched a Superstar

• Diana Ross and The Supremes are one of the biggest groups to come out of Motown, but did you know Berry Gordy almost gave up on them? Before they became household names, the group (then called The Primettes) recorded several songs—but nothing hit. Frustrated, Gordy was hesitant to invest more in them.
• Then came "Where Did Our Love Go."
• The song wasn't originally meant for The Supremes—it was written for The Marvelettes, who rejected it. The Supremes recorded it instead, and Gordy paid just $3.19 to register the song with copyright.
• It became their first #1 hit and launched their legendary career. Not a bad return on investment!

The Song That Was Written in 30 Minutes in a Bathroom

• Many of Motown's biggest hits were written and recorded at lightning speed, but one stands out: "My Girl" by The Temptations (1964).
• Smokey Robinson wrote it in less than 30 minutes while hanging out in a Motown bathroom.
• He knew immediately it was something special and insisted on giving it to The Temptations instead of keeping it for himself. The result? One of the most beloved songs of all time and The Temptations' first #1 hit.

Marvin Gaye's Accidental Hit That Berry Gordy Hated

• In 1971, Marvin Gaye was fed up with Motown's "stick to love songs" policy and wanted to make socially conscious music. He recorded "What's Going On", inspired by the Vietnam War and racial injustice.
• Berry Gordy hated it and refused to release it, calling it "the worst thing I've ever heard."
• Marvin didn't back down—he told Motown he wouldn't record another song unless they released it.
• It became one of the most important songs of the decade and is now considered one of the greatest songs of all time.

How The Jackson 5 Blew Berry Gordy's Mind

• When Berry Gordy first saw 11-year-old Michael Jackson perform, he wasn't just impressed—he was stunned.
• The Jackson 5 auditioned for Motown in 1968, performing James Brown's "I Got the Feelin'" in front of a small room of executives.
• By the time young Michael dropped to his knees and belted the final note, Berry Gordy turned to his team and said:
• "That kid is going to be the biggest star in the world."
• He was right. Just two years later, The Jackson 5 became the first group in history to have their first four singles go straight to #1.