Who Wants to Be a Billionaire?
You do? Is that your final answer? Then read these words of wisdom from ten of the wealthiest Texans.
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“The thing that causes problems for most people is being illiquid. Quite often, businesses can work through problems if they have liquidity. But if they don’t have liquidity and they have a problem, it’s over. I worked for years with no capital, so I never had any liquidity. I was always trying to expand the business and bring in new revenue and constantly trying to get additional debt or raise money. It took me more than two decades to get to the point that I could adequately capitalize my business. Never again. Today, I try to maintain a lot of liquidity. I’ve probably got sixty percent in blue-chip stocks, twenty percent in private equities, ten percent in horse racing, and ten percent in other assets....
“I’ve done some investing in start-ups, but I haven’t spent a lot of time on it. Venture capital is different: You have to be willing to make an investment of not only money but also human resources, to help the companies out when they get in trouble. It’s like picking the right horse, but you do more than pick the horse: You pick a trainer, you pick a farrier to take care of the shoes, you pick riders to work the horse in the morning, and you pick a jockey for the race. It takes a whole effort. You can’t just be an investor, the way you can with blue-chip stocks....
“I think you’re misdirected if you go out planning to make a lot of money. What you do is try and determine how you can add value, and that added value can be in the form of something manufactured or a service. Ask yourself what you can do that adds the most value based on your talents. If you look for that and position yourself in a growing market, you have a good chance of succeeding.”
Robert C. McNair, 63, founded Cogen Technologies, which was the nation’s largest privately held power company until he sold it to Enron for $1.4 billion in 1999. He lives in Houston, where he is pro football’s latest franchisee. Estimated net worth: $1.1 billion.
Take Your Time by Fayez Sarofim
“Pick the right investments and be patient. I’m a long-term investor; I try to double my wealth every four or five years.”
Fayez Sarofim, 71, is a money manager and an investment adviser. He lives in Houston. Estimated net worth: $1.8 billion.
Don’t Get Sued—and Don’t Make Me Sue You by E. Pierce Marshall
“Stay away from litigation. Other than that, I can’t really comment. I’m nowhere near as wealthy as you think I am. I don’t belong on the Forbes 400. I’ve told Forbes I don’t belong in their magazine, and they’ve ignored me. So be careful. I’m involved in a tax case. I don’t want to hurt anybody, but I don’t want to be damaged. If I’m damaged, I do something about it.”
E. Pierce Marshall, 60, inherited his fortune from his father, J. Howard Marshall, who owned a 16 percent interest in Koch Industries. He is currently embroiled in a legal battle over his father’s estate with his father’s widow, Anna Nicole Smith. He lives in Houston. Estimated net worth (according to Forbes): $1.5 billion.
Stick With What You Know, And Don’t Get Discouraged by Drayton McLane, Jr.
“The stock market has been extremely good the past twelve years. It has taken a little courage to invest because there are variations in the market, but you have to be a long-term investor; it’s not what a stock is doing one day or a few days later. I’ve invested in a lot of technology. It’s not for the weak-hearted but that’s where the real growth is. I’ve also invested a lot in start-up businesses and companies that are merging, including those in the food industry....
“In business, every problem can come along; the trick is having enough capital to see you through. That’s why it’s good to bring in partners who have finances and are able to see things through, in case things don’t go well. Another key is that you have to be incredibly honest. You can take shortcuts that will make you a faster profit, but it won’t build your business long-term. You’ve got to do what’s right. You’ve got to treat your employees right, and you’ve got to treat your customers right....
“Don’t get real excited when things go well, and definitely don’t get discouraged. You’ve just got to stay and work at it every day. People ask me what my job is, and I tell them to visualize a football coach on the sidelines. He stands there, and when things aren’t going well, he’s still encouraging his players. That’s what a good leader is: Someone who encourages people, gives them hope, and tells them there’s always tomorrow.”
Drayton McLane, Jr., 63, the owner of the Houston Astros, sold his family’s wholesale food business to Sam Walton in 1990 for cash and 5.6 million shares of Wal-Mart stock. He lives in Cameron. Estimated net worth: $1.1 billion.
Location, Location, Location by Sanjiv Sidhu
“It’s easier to get rich in Texas because you can do business on the East Coast, the West Coast, and in between. If you’re based in New York, it’s tougher to do business in California and Japan. From Dallas, you can do business with Asian countries. You can also do business with Europe more easily than you can from California, which is much farther. This is a great location to do business all over the world.”
Sanjiv Sidhu, 42, is the founder of i2 Technologies. He lives in Dallas. Estimated net worth: $1.1 billion.
Be Passionate And Stay Humble by Mark Cuban
“Find an idea that you’re passionate about and go for it, knowing there’s nothing in Texas that’s ever going to hold you back and there’s a lot that can help you: It’s an income tax-free state, and it has an unpretentious workforce. If you go to Silicon Valley or Silicon Alley, there’s a caste system, and a lot of people have an inflated value of themselves. Texans are ready, willing, and able to work....
“I invest my money in stocks more than anything else. I’ve got a fund I’ve put a lot of my money into, the Precept Fund out of Dallas. When I invest in companies, it’s mostly technology companies, because tech’s the thing I understand. That’s been one of my tenets: Stick to the things that you feel you have an advantage in. If you go outside of your specialty, you’re at a disadvantage....
“The key to keeping wealth is never thinking you’re smart. Many people think they’re so smart that they know things other people don’t, and that’s when they start making mistakes. You have to stay humble.”
Mark Cuban, 41, co-founded Broadcast.com, which was bought by Yahoo! last April for $5.7 billion. He lives in Dallas. Estimated net worth: $1.2 billion.
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