003 - I Interview My Friend Worth Hundreds of Millions
It's endlessly easier to build wealth if you have insight into how a self-made wealthy person thinks...
I’ve had a unique life in that, due to the amazing success of my Dad, I grew up around a lot of wealthy people. I was educated in fancy-pants schools, I lived in fancy-pants neighborhoods and, basically, I “hit the jackpot” through the genetic lottery.
It doesn’t seem fair.
At any rate, I’ve never much cared about someone’s “net worth,” simply because I’ve “been there and done that.” As a result, rich people (much richer than I am) seem to feel comfortable around me. I think they sense that I’m not out to profit from them in some way.
I thought it would be fun to interview my friend Jack. He’s 69 years old and he’s worth about $250,000,000 give or take a few million. He’s generally a pretty private guy, as I think most uber-wealthy people are, and he agreed to do this provided I keep his identity a secret.
I recorded our talk and condensed the best bits below for you to glean from it what you will.
Jack, Can you Start Out With a General Synopsis of Your Childhood and Background?
Sure. I grew up on a Farm in Rural Iowa and pretty much was consumed with chores when I wasn’t going to school. We farmed about 400 acres, which was really a pretty good sized operation at that time, and we raised various livestock, mainly beef, but we also had of course chickens, often pigs, etc. etc.
No creature comforts to speak of like air conditioning, for example. For a good part of my childhood we had no indoor plumbing. Life was pretty demanding, but I didn’t know any different because everyone around us pretty well lived the way we did.
What is the Extent of Your Education?
We had a little Catholic school that I attended through 8th grade. I went to a tiny high school with a graduating class of 24 kids. Pretty basic education but I was lucky enough to have a few very caring teachers who really took an interest in me and encouraged me to push myself academically.
I went to Iowa State for Ag (Agriculture) but only for one year. That’s about the extent of my formal education.
My real education was working on the farm as a kid and then working in corporate life later on. Those were the experiences that truly made the difference.
That’s how I see it any way.
Did You Ever Think You Would Be a Lifelong Farmer and Why Did You Leave the Farm?
Well my Dad certainly expected that I would carry on the family tradition of farming, and all my aunts, uncles, cousins, etc. were farmers, so I suppose everyone thought I would continue on. I thought so too, but I never really felt great about that plan.
For one thing my Dad and I just didn’t get along very well together as co-workers. We were always just kind of like oil and water. It was frustrating.
Also, over time growing up, I started to notice that I just seemed to be wired differently than the rest of my family. I was interested in bigger picture things. I was very curious about life outside of small-town Iowa for some reason.
So I was always probably a “flight risk” just because of my nature. I didn’t have a plan to leave, though. I ultimately was given an opportunity to leave just through sheer luck.
One day we had a vet over to the farm to look at a sick cow. I’ve always had the gift of gab and so I was just naturally hanging out with him and chatting him up. He told me his nephew was in town visiting from Chicago, and he happened to be in the computer business. Said he was in charge of putting together a sales team pushing “mainframe computers,” which were all the rage back then (only I didn’t really know it at the time).
Well, for some reason I really keyed in on this. I don’t even know why. Maybe it was just this curious nature I have.
I reached back out to the vet that evening and asked if I could meet this nephew of his. Long story short, he saw something in me that he thought he could leverage, and a month later I was in training to sell IBM mainframe computers.
Did You Have Any Pushback From Your Family?
Well, my Dad thought I was crazy of course, but you know I think he might have actually been relieved. We butted heads enough on the farm that he may have already suspected that I wasn’t cut out for that kind of life.
I’m pretty sure he expected I would return in a few months time with my tail between my legs, which of course I never did.
The rest of my extended family, once they heard what is was doing, thought I was completely from Mars, but I think some of them were excited to see how it all went.
And so How Did Your Early Career Go?
Well, it generally went extremely well. IBM had excellent training, and I just sort of took to it like a duck to water. I was worried at first about having no technical background to speak of, but I found that those things could be learned and understood over time.
I think I also lucked out due to timing. I was selling the right product at the right time. Businesses sorely needed our equipment if they wanted to compete. Those that didn’t innovate were eventually left in the dust.
I was with IBM for five years and then Xerox for another three years. All very fruitful and financially rewarding far beyond anything I could have generated selling beef and corn, etc.
Eventually You Transitioned Into an Ownership Interest. Tell Me About That.
Yes, there was a fellow who had roots with IBM but had branched out into his own operation. He had assembled a little team of “turnaround experts” who would take over a failing business and fairly quickly bring it back to life. Once the business was squarely in the black, he would sell it at a great profit.
He had heard of my sales exploits and recruited me over to his organization. He ultimately “made me an offer I couldn’t refuse.”
The arrangement was that I would get substantial shares in the failing business in exchange for managing the sales team. This was really challenging in the beginning because I didn’t take any kind of salary for the first nine months I worked with him.
How I got my wife to let me work that long without a paycheck I’ll never know.
But nine months in we finally had the turnaround to a point where I could start to draw a reasonably salary. That of course helped immensely with morale at home.
Finally after six years, we sold that company at a handsome profit and I finally had my first taste of substantial wealth. At least it was more money that I had ever seen in my life. Small potatoes compared to today, but it was a tremendous payday nonetheless.
We then turned around and did the same routine again. He purchased a failing organization, gave me (and a few other key team members) shares, and we set about turning around the business.
We ultimately did this routine on six businesses. They each averaged about a five year process from purchase to sale. Five of the six were profitable. One was a disaster and never netted us a dime. Still, that’s an excellent track record.
Is This The Main Source of Your Wealth, Then?
Well, for sure I became what you would call “rich” after this great run we had. I didn’t really become “filthy rich” until the next phase of my career.
I mentioned that we did this little “turn around a failing business” routine six different times. You might wonder why I stopped.
Well, Thomas, the gentleman leading up our team - the main visionary, had a heart attack. He survived it, but he basically didn’t work another day after that. This ended up being a critical juncture for me.
I spent a lot of time thinking about what I was going to do next. Finally one day I realized that I could simply replicate the formula that Thomas had put together. I pretty much copied his model, only this time I had full ownership.
To make a long story short, I purchased a failing software company, turned it around and sold it for a very nice profit. The rest is history.
What are Some Key Factors to Your Success?
I think first and foremost is consistent effort over time. I’ve always been one to take my time seriously, and one of the ways that I honor my time is to put forth great effort in whatever I’m doing.
I don’t “phone it in” if you know what I mean.
I really learned this lesson on the farm, by the way. I couldn’t ever take a day off or the animals wouldn’t get what they needed.
I also was very good at surrounding myself with people smarter than I am. I built an excellent network of talented friends who really saved my bacon several times over the years.
If I had a finance question, I could call upon any number of friends who were expert. Logistics problems? No problem, just open up my rolodex and phone a friend.
You can save years of effort simply by asking advice from someone who has already done what you hope to do.
Who you know is key. Make friends with talented and accomplished individuals before you need their advice.
Are There Any Downsides to Having Such a High Net-Worth?
Well sure. For one thing great wealth brings great responsibility. You have the means to help many other people out, but you need to be very careful in how you do it. You can spoil a person rotten and almost do more harm than good if you’re not careful.
Also wealth tends to create complexity. You buy more “stuff” because you can. Then you eventually accumulate enough “stuff” that you need to buy a bigger place to house it all in.
Then one house isn’t enough.
Then one country isn’t enough.
Finally, you start worrying about all your stuff. You have to take care of it. You have to protect it. It’s not all fun and games if you know what I mean.
What Advice Would You Give to a Young Person Making Their Own Way?
Well, I would say whatever you do, just try to be productive. Try to be of value. Certainly produce well more than you consume. This is really the only path to wealth that I know of.
By the way, you don’t necessarily need to be rich. In fact, the wealthier you get, you will find a diminishing returns in the way of happiness.
What you REALLY want, and the good news is you can get this almost no matter what profession you end up in, is financial independence.
You want to get to the point where you are fully self-supportive and self-sustaining. THAT’S where the good life lies.
What does this look like? Well maybe you have a business that generates enough steady income that you can get your time and freedom back. Whether or not you work for yourself, certainly financial independence involves being a good saver. Always pay yourself first no matter what.
I know a lady who worked at a laundry her whole career. Hourly wages all the way through. She was an incredibly good saver and an average investor. She travels the world now because she has all the resources she needs. Happy as a clam!
Any Closing Thoughts?
Just stay true to yourself and try each day to be a little better than you were the day before. Nothing happens as fast as you want it to. The real winners are the one who stick with it. Life is a marathon, not a sprint.
My Final Word…
It was tons of fun introducing you to the wisdom of my friend Jack. I hope you can tell from his testimony that he’s “one of the good guys!” I would encourage YOU to seek out a wise old friend and visit regularly.
Hey, if you liked this newsletter, why not pass it on to someone who might enjoy it?
See you next time!!!
Tony