Born in Boston, Massachusetts, on September 6, 1888, Joseph Patrick Kennedy was the son of Mary Hickey and Patrick Joseph Kennedy, an important figure in the Irish community of Boston. Familiarly known as "P.J.," Patrick J. Kennedy had risen from common laborer to highly successful businessman, and was eventually instrumental in the organization of two different Boston financial institutions, the Columbia Trust Company and the Sumner Savings Bank. Early on, Patrick J. Kennedy had also entered politics, and Joseph, his first child, was born during P.J.'s third term in the Massachusetts House of Representatives. Patrick J. Kennedy also served in the Massachusetts Senate, but his enduring political power was in the unofficial capacity of a "ward boss" who held sway in the East Boston Ward 2 for more than thirty years.
Young Joseph grew up in East Boston and attended Catholic schools until the eighth grade when his family enrolled him in Boston Latin School, a college preparatory academy in the Boston Public School system. Despite an aptitude for mathematics, Joseph P. Kennedy's academic record at Boston Latin was mediocre at best. Nonetheless, he found favor with teachers and was popular with fellow students, who elected him class president during his senior year. Upon graduating from Boston Latin in 1908, he entered Harvard University, where he earned his B.A. in 1912. In the fall of 1912, Kennedy procured the position of assistant state bank examiner for Massachusetts, the first step in a career in finance that would bring him great wealth.
In his last years at Harvard and as he embarked upon his career, Joseph P. Kennedy began in earnest to court Rose Fitzgerald, daughter of Boston Mayor John F. "Honey Fitz" Fitzgerald. As the scions of important and influential men, the two had grown up in the same circles, and had even spent a summer vacation together when they were children. In their adolescent years, Joseph Kennedy started accompanying Rose to dances and parties; he would later say that he was "never seriously interested in anyone else." But after Rose Fitzgerald's debut in society and Kennedy's graduation, the courtship became more firmly established. The couple was married on October 7, 1914 and after a two-week honeymoon, they settled in the Boston suburb of Brookline. Their first son, Joseph P. Kennedy Jr., was born on July 28, 1915, while Rose Kennedy was staying at a summer cottage in Hull, Massachusetts.
In the meantime, Joseph Kennedy had taken a significant business step. Columbia Trust, the bank his father had helped start, was ailing and its stockholders were on the verge of selling out. Sensing an opportunity, the younger Kennedy sought and obtained the backing to purchase a controlling interest, becoming, according to the press, the youngest bank president in the country, at twenty-five. As head of Columbia Trust, Kennedy worked hard to cultivate connections both high and low, maintaining good relations with his working class client base but always seeking new links to Boston's business elite. His entry into that circle was confirmed by his election to the Board of Trustees of the Massachusetts Electric Company, New England's leading public utility at the time. He was named to the Board on May 29, 1917, the same day his second child, John Fitzgerald, was born.
Even apart from his election to the Board, however, Kennedy's connections were beginning to pay off. In 1917, fellow Board member Guy Currier, a prominent Boston lawyer and counsel for Bethlehem Steel, recommended Kennedy to Bethlehem chief executive Charles M. Schwab for the position of assistant general manager at the company's Fore River Shipyard in Quincy, Massachusetts. Already one of the largest shipyards in the country, Fore River was booming with orders as a result of the United States' entry into World War I, and a companion yard was being built at nearby Squantum. Kennedy's close supervision would keep this work under control. It was during his tenure at Fore River that Kennedy would first meet – and sometimes clash with – Franklin D. Roosevelt, then Assistant Secretary of the Navy.
By the time the War entered its final months, the weight of work at Fore River had pushed Kennedy to exhaustion, which was compounded by worry over Rose who was expecting in the midst of the deadly Spanish flu epidemic that was proving a particular threat to pregnant women. But Rose safely gave birth to her first daughter Rosemary on September 13, 1918, and within a couple of months the war had ended and the flu had subsided. Observing the inevitable peacetime slackening of pace at Bethlehem Shipbuilding, Kennedy realized that there would not be the same challenges and, more importantly, prospects with the company. He determined to return to finance, and cast about for the best option. He found it in the person of Galen Stone, an associate from the Massachusetts Electric Company Board and a partner at the brokerage firm of Hayden, Stone and Company. With Stone as mentor, Joseph Kennedy absorbed the precepts and practicalities of the stock market, increasingly investing his own capital. Setbacks occurred, but Kennedy's progress – and success – were notable. When Stone retired at the beginning of 1923, Kennedy decided to move on. He left the firm of Hayden, Stone – though not the physical address – and established himself in his own right as "Joseph P. Kennedy, Banker," offering a range of financial services based on the knowledge and skills he had developed working with Galen Stone. For the next three years, on his own behalf and that of others, Kennedy would undertake a series of business ventures that would make him a wealthy man, with a net worth of 2 million dollars.