The sun has not caught me in bed in fifty years.
—Thomas Jefferson
The greatest advantage we are all given is youth. It’s the ultimate equal-opportunity gift. What do Bill Gates, Steve Jobs, Google co-founder Sergey Brin, and Facebook founder Mark Zuckerberg all have in common? They all started what became billion-dollar companies before their twenty-fifth birthdays.
Risk only increases with age, so RMITs concur: You’ve got less to risk when you start young, plus you have much more time—not to mention more of what Bruton Smith calls essential energy—to get it done. Ron Rice, who began selling his Hawaiian Tropic suntan lotion on the beaches of Daytona as a young high school teacher, feels strongly about this: “Youth is your greatest asset. It’s the last time it will be risk-free.” Hartley Peavey began building his Meridian, Mississippi–based guitar and music amplifying business when he was a junior in college. Michael Dell, the richest man in Austin, Texas, started his computer company out of his dorm room at the University of Texas.
But Dell Computer wasn’t Michael’s first business. He didn’t start out as a tech titan, but rather as a philatelist. At the age of twelve, he started Dell Stamps. In his book Direct from Dell, he writes, “I got a bunch of people in the neighborhood to consign their stamps to me. Then I advertised Dell Stamps in Linn’s Stamp Journal, the trade journal of the day. And then I typed with one finger, a twelve-page catalog and mailed it out. Much to my surprise, I made $2,000.” Dell writes, “I learned an early powerful lesson about the rewards of eliminating the middleman. I also learned that if you have a good idea, it pays to do something about it.” When he was sixteen, he got a summer job hawking subscriptions for the Houston Post. The newspaper gave Dell a list of phone numbers and instructed him to begin dialing for dollars.
In the style of a true RMIT, he found a better way. He learned from his random calls that the people most likely to buy subscriptions were those who had just gotten married or received a new mortgage—what is called in marketing parlance “key transition periods.” He procured public-records lists from the state of Texas and proceeded to make $18,000 in one summer by targeting the right market. Dell was already a serial entrepreneur by the time he started building computers out of his dorm room.
Pat McGovern started even earlier by delivering newspapers when he was only eight years old. He remembers the book that first fired his imagination. Giant Brains; or, Machines That Think by Edmund Callis Berkeley, first published in 1949, helped determine the destiny of this young man from Philadelphia. Berkeley’s book “was all about how these new computer systems were going to amplify the human brain by amplifying your memory and by giving you access to more facts than your own brain can readily recall,” McGovern explains. “I was fascinated that these machines could quickly analyze patterns in information and give instant insights into the significance of the facts and data, thereby multiplying your analytical intelligence.”
McGovern, though, was not your typical science nerd. In fact, there is nothing average about McGovern or his intelligence. He says, “When I got this book at the Philadelphia library, I thought, Wow this is great, because the unique characteristic of Homo sapiens is our brain, and this machine is an amplifier of our brains. I took my newspaper delivery money and went down to the hardware store and bought plywood boards, electronic relays, switches, and lightbulbs, and hand-wired a device that was an automatic computer that played tic-tac-toe in a way that was unbeatable. I entered the science fair and won the prize.”
It would be the first of many prizes for McGovern. “At the science fair, I was discovered by an alumnus of MIT who said, ‘I think you should study the brain as a model for designing electronic systems, and I think we can get you a scholarship to MIT.’ ” That prized scholarship became a reality, and so did McGovern’s dreams of marrying the brain and the computer. While still in college, he saw an ad for an associate editor position posted by the only computer magazine in existence at the time. As you might suspect, he got the prize job. A major perk was his high-level access to the key people in the computer industry.
One fateful day, he met with the head of Univac, the company that created the original computer that forecasted Eisenhower’s presidential victory. The gentleman said to McGovern, “Our industry is being held back because we don’t have a good database of where the computers are installed and how they are configured or what the future buying needs of the users are going to be.” Just like the lightbulb on the science-fair-winning tic-tac-toe computer of his youth, the lightbulb of a new idea went on in McGovern’s brain. He informed the Univac executive that he was aware of about ten thousand computer sites at the time; he could call the companies, banks, and hospitals that used computers and put together such a database. The executive asked him, “How much would that cost?” McGovern quickly said, “I could probably do that for about $40,000.” The executive responded, “Pat, that won’t work.” McGovern assumed he simply wanted a discount and said, “Well, if I hire high school students where I live to crunch the data, maybe I can do it for $36,000.” To McGovern’s surprise, the Univac honcho said, “You don’t understand, Pat. No one would trust information as cheap as you’re proposing to provide it. Make it $80,000 and we will take it seriously. Information is intangible, and the higher the cost, the higher the perceived value.” By starting early, McGovern learned a valuable lesson that he never would have gotten as a middle-aged man. People like to help the young. He also learned to never underprice his product. His company today has revenues in excess of $3 billion—and his personal net worth is double that. Pat McGovern is proof positive that it pays to start early.
Leroy Landhuis, a former air force pilot and current real estate regent of his adopted hometown of Colorado Springs, grew up in the small town of Leota, Minnesota, the son of a farmer who believed, perhaps too fervently, in the biblical passage, “Spare the rod, spoil the child.” Landhuis built up his work ethic and his muscles on the family farm, doing every chore his strict father demanded, including what he calls “picking rock” to clear the farmland for planting. A good athlete who played football and ran track, he found what he terms a “noble way” to leave home: enlisting in the air force, where he earned a whopping $200 a month. “It was more money than I had ever seen,” he says.
Landhuis learned to fly and actually enjoyed the disciplined environment of the air force (a piece of cake compared with working for his father). Unfortunately, he developed bleeding ulcers and was forced to leave the service, but he never returned to the family farm. He decided to stay in Colorado Springs and build a new life. Landhuis, however, never let those emotional scars of his childhood affect his desire to become a major American success. By his early twenties, he had become a hugely successful residential real estate salesperson. In his spare time, he started buying homes and renovating them. “I slept on the floor for three years eating nothing but rice in order to be able to afford the improvements,” he says. Today the Landhuis Company is the premier real estate development and management firm in Colorado Springs, owning thousands of acres of land for development, and his Paradigm Realty Advisors in Tulsa, Oklahoma, manages several thousand square feet of office and commercial space. Landhuis started early, and—even more important—he started building assets early.
A common trait of all RMITs is their early work experience. Air force brat and biotech billionaire Randal “RJ” Kirk of Belspring, Virginia, began selling greeting cards door to door when he was nine. He boasts, “I had an 85 percent success rate!” The richest, boldest, and, at least at Halloween, the scariest (I’ll explain shortly) man in Cleveland, Tennessee, Allan Jones (no relation) had a paper route when he was in the sixth grade. He got up at 4:00 a.m. to deliver the Chattanooga Times to the eighty-one homes on his route. He would finish two hours later, then grab his fishing rod and fish until it was time to devour a quick breakfast before going to school at 7:45. “I failed the sixth grade… twice,” he says, “but I never missed a day of work.”
Jones started early, and he developed a work ethic that has served him well. During the holidays each year, he led a group of his friends to collect post-celebration Christmas trees, just to see how many he could gather. Ultimately he staged a big bonfire party to end the holiday season before returning to school. By the fourth year of his venture, he had filled his parents’ yard with more than twenty-seven hundred discarded Christmas trees. It was the beginning of his lifelong fascination with trees. He says, “I kept a homemade sales thermometer in the front yard posting the number of trees collected for all of Cleveland to see.” In our interview, I commented to Jones that he must have loved the money this early venture brought in, assuming he and his buddies were paid to take away the ornament-free trees. He replied, “I didn’t make any money on this. I was never motivated by the money, I was simply motivated to be the best of the best.” (See RMIT Commandment #1.)
Money became more of a motivator when, as a teenager, Jones founded his first official business with the rarefied name City Bushogging. He took his tractor door to door, offering to mow the large expanses of grass inside the city limits of Cleveland, Tennessee, for $8 per hour with a $10 minimum.
Harvard psychiatrist George Valliant spent the majority of his career studying the predictors of future success, and he proved that childhood work ethic was one of the most accurate ways to predict adult success, mental health, and even the capacity to love. Valliant’s conclusion was based on a longitudinal study of 456 young men from inner-city Boston whom he began studying when they were fourteen. As a teenager, each young man was assigned a rating for his ability to work. They were then re-interviewed at ages twenty-five, thirty-one, and forty-seven. The results were impressive: Those who had the highest work ethic rating at fourteen earned five times more than their cohorts who ranked lower. Not only did they far outpace their less motivated compatriots financially, but they were happier and had far more successful marriages and social relationships.
William D. Sanders, one of the most respected real estate investors in America and the richest man in El Paso, Texas, was on the board of the University of Chicago when he learned that the school boasted more Nobel Prize winners than any other college in the country: fifty-eight, to be exact, twenty-three more than Harvard. He says, “What is interesting is not just the sheer number of Nobel laureates that have come out of the University of Chicago; it is their analysis that 90 percent of them did their prizewinning work between the ages of twenty-one and twenty-nine.” Fittingly, Sanders wrote his first business plan when he was just eight years old. He remembers, “I always knew I wanted to be a businessman. Some kids wanted to be firemen, some wanted to be lawyers; I wanted to be in business, my own business.” He found his perfect pitch and started his own business early. (See RMIT Commandments #2 and #3.) That’s why he is the richest man in town.
Whether it was delivering newspapers, working on the farm, or mowing lawns, RMITs didn’t just fantasize about becoming successful when they grew up; they got out there and began the march toward that future. Many did so because they had to, in order to help support their family or to have any disposable income of their own, but most worked early because they wanted to accomplish something, to prove to themselves that they could be a success. Buzz Oates, the California real estate baron, says, “I grew up in Sacramento one block from the old fairgrounds, and during fair time each year, I would sell newspapers and collect Coke bottles to resell. I would also happily mow lawns for 50 cents.”
Oates couldn’t have dreamed then that only a few years later, he would own the very fairgrounds where he’d picked up cola bottles. The fairgrounds of his youth became a small part of his vast real estate holdings. Ron Rice thinks it’s never too early to take the plunge into new waters. “You don’t have to know everything about a business to start a business,” he says. “If you wait until you know everything—something impossible, by the way—you’ll never get a business off the ground.” When Albany, New York’s Karthik Bala and his brother Guha started their video gaming business in their parents’ basement, both were still in high school. “We were young,” Karthik says, “and we had nothing to lose by pursuing our passion.”
Philadelphia’s Josh Kopelman says, “I started my first business [Infonautics] in college, because when you’re young you enjoy a vastly different risk–reward ratio.” As a sign of what the future would hold, he also notes, “I had business cards for all my entrepreneurial ideas when I was seven years old.” Inexperience can actually be an advantage: George Johnson, the Spartanburg, South Carolina, serial entrepreneur, says, “I like to hire young people because they haven’t learned what they can’t do.” Youth may be the single greatest advantage we are all given. Don’t waste it. RMITs didn’t.
Bruton Smith, the richest man in Charlotte, North Carolina, brought automobile racing to Wall Street. But before he did that, he built the Charlotte Motor Speedway, which he opened in 1960. It all started for Smith when he was seventeen and bought his first race car. He says, “Mozart got a piano. I got a car and my passion became my vocation.” David Green, founder and CEO of Hobby Lobby and Oklahoma City’s richest and perhaps most low-key citizen, recalls that a woman came to him recently requesting a loan of $100,000 to build a business selling salad dressings to the national grocery chains. Green suggested to her that she should just make a few cases of the salad dressing and sell it to the local IGA first. She almost fell out of her chair laughing at what she thought was such an antiquated notion.
He said to her, “Well, I’m sorry, ma’am, but that is the only way I know how to start a business.” He told her about how he and his wife started out making and selling picture frames in their garage, and on their kitchen table, while still in their twenties. That little business, thirty years later, is a $2 billion concern giving Green a $4 billion net worth. Starting early and starting small is one of the surest paths to a large fortune.
RMITs also believe that it is never too late to make that crop, because wisdom truly does come with age and late blooming is, of course, better than never blooming at all. The average richest man in town earned the title when he (or she) was fifty-one. Dan Duncan, now in his seventies and the majority owner of the $7 billion Fortune 500 company Enterprise Partners (the second largest publicly traded midstream energy partnership in North America), became the richest man in Houston, Texas, in his sixth decade. He believes strongly that wisdom is acquired over a lifetime of experiences, both good and bad. He cautions that one of his greatest life lessons was to stick to what he knows: “Every time I ventured into businesses that were not my main expertise, I lost money. It took me a lifetime, it seems, to realize that.”
The average age of America’s RMITs is currently sixty-five, proving that wisdom truly does come with age—no matter how brilliant or dedicated you are, there is no substitute for experience. And real experience requires more than a few laps around the track of life. The sooner you begin building that wealth of experience and wisdom, the sooner the financial remuneration rolls in.
The early morning has gold in its mouth.
—Benjamin Franklin
To start early, you must also start your day early and show up early. “Don’t procrastinate,” posits Mal Mixon of Cleveland, Ohio, “because in only two days, tomorrow will be yesterday.”
RMITs don’t put off until tomorrow what should be done today, and they are scrupulously punctual. Ninety-eight percent cite the ability to show up, and show up on time, as being integral to their success. Punctuality demonstrates discipline and respect for others. Karthik Bala of Albany, New York, says “Nothing is more destructive to one’s personal success than the inability to be on time, because it sends a powerful statement of arrogance, self-absorption, and disrespect to those with whom you are meeting.” Dennis Albaugh—famous within his company for saying, “Nothing is beneath me or beyond me”—was a very typical RMIT when he set a phone appointment for our first interview; he called two minutes early. He respects his time and he respects the time of others.
Jim Harrison of Tuscaloosa says, “Procrastination is really just the fear of success. People procrastinate because they are afraid of the success that they know will result if they move forward. Success is difficult. It carries with it huge responsibility, so it is far simpler to put off responsibility than it is to accept it.” Many of us choose inaction over action. As San Antonio’s Red McCombs says, “Action can at times cause pain, often sharp pain, but would you rather have a few sharp pains or a lifetime of chronic, consistent pain? Who wants to be a coward?” Not McCombs. Bob Stiller of Burlington, Vermont, says, “Nike got it right when they launched the advertising slogan ‘Just Do It.’ ” So just do it and do it early—do it now.
RMITs believe that there are more opportunities for new businesses with lower barriers to entry now than at any time in history. George Johnson of Spartanburg, South Carolina, says, “It helps, however, to fall in love with the right business. To be successful, you’ve got to pick the right business. If you pick a terrible business, no amount of hard work will save you. If you pick a great business, you can be a mediocre performer and still succeed.” Johnson’s partner, Wayne Huizenga, adds that the new opportunities most likely will not be in the glamour fields.
They’re both right. Spend a month in Hollywood and you’ll see the law of supply and demand in all its splendor. It seems everyone there thinks they are destined to be the next Steven Spielberg. Every year more than three thousand filmmakers submit their independent films to the Sundance Film Festival. Approximately 120 of those films, less than 5 percent, are chosen to debut at the festival, and only a small handful of those are picked up for distribution by the Hollywood studios. Considering the investment required to make a movie, that’s not a surefire way to make money.
So if not Hollywood, then where are the big opportunities? Observes Omaha’s Joe Ricketts, “We have just scratched the surface of the effect the Internet will have on business and society.” Ricketts also sees opportunities in alternative energy sources, given the world’s reliance on oil. RJ Kirk cites biotech, especially human genomics, as a particularly fertile area for future wealth creation. Pat McGovern, the founder of computer publishing giant IDG, says there will be major opportunities in the WiMAX space and also in alternative energy sources. With the proliferation of handheld wireless devices that have the potential to do more and more for the end user and with the seemingly endless rising cost of oil, there are new business opportunities right in your backyard, if you have the aptitude and the right attitude.
Every year, major publications run cover stories analyzing the financial benefit of higher education, especially the wisdom of getting an MBA. Usually the conclusion is that, on a strictly financial basis, higher education doesn’t provide a proven return on investment. The personal psychological return, however, may be worth it. Do you need an Ivy League degree to become the richest man in town? Absolutely not. In fact, David Rubenstein—who went to prestigious schools Duke University and the University of Chicago on scholarship—doesn’t believe that an Ivy League education or a degree from a top school will make you the most successful person in town. He says, “The only reason people go to Harvard is for the bragging rights.” Rubenstein believes in persistence more than fancy educations. Only ten of the one hundred RMITs attended Ivy League schools. Most made their fortunes after four years at the state universities near their hometown. Three were college dropouts (Bill Gates is the most famous one), fourteen didn’t attend college at all, and one went to community college. Among America’s RMITs, level of education doesn’t seem to be predictive of ultimate success or wealth creation. Dennis Albaugh says, “I don’t put much stock in higher education. I would rather have someone who is going to get the job done than someone who tries to impress me with their résumé. The longer the résumé, the less I look at them.”
But while you don’t have to attend Harvard or Princeton to enjoy the American Dream and to become the richest man in town, every RMIT recognizes the value of a good education and makes certain that his or her progeny pursues it. Clayton Mathile, who grew up in modest circumstances on a farm in Ohio, said his mother always told him, “Education is the great equalizer. That’s how poor kids get to be rich kids.”
Education, no doubt, affects self-esteem, so it can’t be a bad thing. Jim Oelschlager wryly advises, “Finish your degree so you can start your education.” He likes to “hire smart, energetic people and teach them what I want them to know about the investment business. College degrees aren’t as important as a willingness to learn and work hard.” Oelschlager places great importance on real-world experience and what he calls “collateral learning,” which he defines as “learning that occurs when you go someplace to learn one thing and end up learning something else—something you may have never known existed.” He also thinks travel is one of the best ways to experience this collateral learning: “You cannot anticipate collateral learning, but you can put yourself in places where it might occur.”
• Start young.
• Show up early.
• Don’t let education insecurity hold you back.
• Put yourself in situations where you experience collateral learning.