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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You don’t have to be Regis Philbin to know that everyone wants to get rich these days, but is Texas a good place to do it? Consider this fun fact: In September 1993, the last time we published “The Texas 100,” a ranking of the hundred richest Texans, H. Ross Perot, Robert H. Dedman, Sr., and at least one of the five Basses (whose combined net worth was $7 billion) were the state’s only billionaires. A scant six years later, when Forbes published its 1999 Forbes 400, a roster of the four hundred richest Americans, 25 of them were Texas billionaires. And they weren’t the only Texans on the list: In the basement of the 400 were another 5 who made the cut despite being mere several-hundred-millionaires.
• Who are these superwealthy Texans? The answer is right there on the page: Michael Dell (worth a measly $240 million in ‘93; today, his $20 billion makes him the fifth-richest person in the world); Perot (nearly $4 billion; take that, Jesse Ventura); each of the five Basses (finally!) and one quasi-Bass, family investment adviser Richard Rainwater; and other dynastic types, like Ray Hunt, who’ve added a ninth zero to their net worth. But there are also names you haven’t heard before, both dot-com (42-year-old Sanjiv Sidhu of Dallas’ i2 Technologies) and not-com (82-year-old Albert Ueltschi of Irving, the founder of FlightSafety International, which has the morbid distinction of being the company that taught JFK Jr. to fly).
• Okay, but how did they get so rich? We put a version of that question—“How do you create wealth in Texas today?”—to ten of the billionaires. Read on for their final answers.
Be the Go-To Guy, And Get Paid by Billie Joe “Red” McCombs
“The way to grow rich is to do better than the guy around you; it doesn’t matter what industry you’re in. I was always driven to do better—to be, as we say in sports, the ‘go-to guy.’ I’ve always wanted to be the go-to guy in my little world. I don’t know what drives other people, but recognition is what’s important to me. And once you do better than others, things fall into place….
“I got a lot out of the paper route I had at age ten. On my route I had to throw the paper to the customer, I had to create new customers, and I had to collect every week. You find out who pays you and who doesn’t pay you. You have to think about what you can do to get them to pay you, and you have to make a decision as to when you cut off the deadbeats. It was quite a learning experience. It made an impression on what I’ve done for the rest of my life.”
Billie Joe “Red” McCombs, 72, owns the Minnesota Vikings and several automobile dealerships and co-founded Clear Channel Communications. He lives in San Antonio. Estimated net worth: $2.1 billion.<hr noshade
Be Positive, and Respect the Other Guy by Charles Butt
“There’s an air of optimism in Texas that inspires people to want to try new things. That’s very important to begin with. People feel it’s a place where they can start something small and, hopefully, watch it grow. And there’s generally a positive attitude toward business as a job-creation process that’s good for society and community….
“In a business like ours, someone in a position like mine is perpetually aware that his people are what make it a success. That’s been my focus: trying to find the right folks. We have about fifty thousand people in our company. They are a terrific group. We’re proud of them, and we feel they’re the best….
“Our business is extremely competitive. It has consolidated in recent years, and we compete against the big four in the supermarket industry: Kroger, Albertson’s, Safeway, and Wal-Mart, which is rapidly becoming the nation’s number one grocer. We have to scramble because they have the advantages that size brings. Hopefully we can be more nimble and have a better local touch. The biggest pitfall in business, though, is underestimating the competition. I’ve done it a few times, to my detriment and my regret—but not very often.”
Charles Butt, 62, is the chairman and CEO of H-E-B. He lives in San Antonio. Estimated net worth: $1.2 billion.<hr noshade
Know a Good Idea When You See One by Robert H. Dedman, Sr.
“At twenty-three, I was a partner in a major law firm in Dallas, and I had a superb practice. But I had heard there were only two ways to get rich as a lawyer: One was to get out of law school and marry a rich woman, and the other was to get out of law school, work your tail off for fifty years, and then marry a rich woman. At thirty I stumbled upon my destiny on a golf course in Palm Springs, California. I thought if somebody made a business of running country clubs, they would have an edge over the clubs run by amateurs. I founded ClubCorp when I was thirty-one, and I quit practicing law when I was thirty-eight.”
Robert H. Dedman, Sr., 74, is the founder and chairman of ClubCorp International. He lives in Dallas. Estimated net worth: $1.2 billion.<hr noshade
Don’t Talk Down to People by Joseph D. Jamail
“I don’t invest in start-up companies. I invest my money—which I made in my successful law practice—in stocks and municipal bonds; that’s where the billion-plus comes from. I’m kind of wild-eyed except on economics. I’ve been pretty conservative about that….
“My strongest suit in making the life that I’ve had is understanding people. You can’t fool anyone; I can’t, and I never saw anybody who could. You just talk to people on a level that’s higher than their level, and they’ll reach up to grab the thread of whatever you’re trying to tell them. In the courtroom I never talk down to a jury. You talk down to a jury, it’s over. I’ve seen country bumpkins say, ‘I’m a country boy, and I’m going to tell you now …’ And I say to the jury, ‘This is an insult to you, and you need to send this country bumpkin back home to pick cotton.’ …
“Beyond that, how do you get rich in Texas? Have a rich daddy. And how do you avoid losing your shirt? Don’t have a mistress.”
Joseph D. Jamail, 74, is a trial lawyer. He lives in Houston. Estimated net worth: $1.2 billion.<hr noshade
Take Risks, Stay Liquid, and Create Value, Not Wealth by Robert C. McNair
“You have to be a risk taker; people who aren’t risk takers probably aren’t going to reap significant rewards. You also have to try to zero in on some industry that is a growth industry, because if you go into a mature industry, someone with a lot of capital is going to beat you up, and you aren’t going to be a long-term survivor….
“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.<hr noshade
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.<hr noshade
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.<hr noshade
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.<hr noshade
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.<hr noshade
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.