How To Be Rich
J Paul Getty
How To Be Rich is essentially a series of articles that Getty was commissioned to write by Playboy magazine.
Getty's intention was to explain himself and why he was a businessman, and secondly get behind the myths of what it was like to have great wealth. Hence the title of the book: not how to get rich, how to be rich.
JP Getty's father, George Getty, had grown up poor on an Ohio farm, but later managed to get through law school supported by his wife. He became a successful Minneapolis attorney and later did well in the Oklahoma oil rush.
Into this relative prosperity John Paul was born in 1892, an only child. He writes fondly of a teenage apprenticeship as a roustabout in the oilfields, then very much a dusty frontier place of rough men, "where gambling halls were viewed as the ultimate in civic improvements." In utter contrast, he then spent two years at Oxford before returning to the States.
He had planned to enter the US Diplomatic Service, but at 22 he went into business on his own as a 'wildcatter' (an independent oil driller and speculator) and got lucky with some oil leases. He was a millionaire by age 24. Deciding to 'retire', he enjoyed himself for a couple of years, but his parents were not pleased, his father telling him that he had a duty to build and operate businesses which created wealth and a better life for people.
The oil rush had shifted to California, and Getty decided to invest in new oil leases near Los Angeles. His business rapidly expanded over the next few years, but his father's death in 1930 was a setback. It was said that Getty Snr left John Paul $15 million. In fact it was $500,000.
Amidst the Depression of the 1930s, Getty came up with the idea of an integrated oil company spanning exploration, refining and retail marketing. He bought up oil stocks which were now very cheap, purchased the Pierre Hotel in New York at a bargain price, and began a difficult 15 year takeover of the Tidewater oil company, then one of California's largest. After WWII, Getty Oil gambled $12 million on oil concessions in Saudi Arabia. Though it took a further four years and $18 million for the wells to produce, by then the world had become aware of the vast reserves in the area, and the gamble paid off handsomely.
In 1957, Fortune magazine named Getty the richest man in America with an estimated worth of $1 billion. He would from then on receive on average 3,000 letters a week from strangers requesting money.
JPG's tips on success in business and in life:
Beat your own path
The book was written at the zenith of large-company capitalism, when the species 'organization man' evolved to make the most of his small place in the corporate machinery. Getty describes this person as "dedicated to serving the complex rituals of memorandum and buck-passing." In contrast, Getty's 'office' in his early years in the oilfields was the front seat of a battered Model T Ford.
As the Wall Street Crash of 1929 took hold, Getty bought up huge amounts of oil stock at very low prices. He does not mention this as a boast, but to demonstrate that the businessperson who did not follow the pack often 'reaps fantastic rewards.' Most executives, Getty observed, would rather become 'bootlickers' to those above them than risk rocking the boat. This was actually counter-productive, because the only real security in the workplace was reserved for those who demonstrated they could add value. Successful businesspeople, he believed, were usually rebels of some description whose wealth was built on rejection of the status quo.
At a dinner party at his Sutton Place mansion outside London, Getty had invited an outspoken socialist. Another guest, a fellow American, was appalled. Getty did not apologise; in fact he felt he was honouring the great American tradition of encouragement of dissent. Hearing views different to one's own, he believed, "adds spice, spirit and an invigorating quality to life."
Writing at the beginning of the 1960s, he correctly forecast that the 'vanished dissenters' would soon reappear, and knew that the economic future would be brighter because of it. Getty's moral was that wealth was only ever generated by open minds, because only such intellectual openness enables us to see opportunities others do not. The alternative was a society "lulled into a perilous somnolence", unable to tell the difference between spin and truth, prey to lobbyists and propagandists. Despite appearances, like many of the truly rich Getty was something of a radical.
Enrich your life with art
Getty humbly saw himself as a patron of the arts on a scale at least equalling the Medicis of Renaissance Florence, and is amusing when discussing the lack of cultural knowledge of the average American. He called art 'the finest investment' not just because it more than held its own financially, but because of the pleasure of living with beautiful things. In return for enriching the world, the wealth creator had a duty to support those who lived for their art. Yet he also saw business itself in creative terms, noting that those at the top are 'creative artists' instead of simply 'artisans of business.'
On collecting itself, the author dissolves the myth that it is a rarefied pastime for the rich, mentioning several acquaintances in regular jobs who had built up excellent collections. Anyone with enough money can pay top dollar at Sotheby's, but the true collector is a scholar who appreciates the background of each piece she buys. As Getty rather poetically puts it: "To me, they are vital embodiments of their creators. They mirror the hopes and frustrations of those who created them - and the times and places in which they were created." What could be more fascinating or enriching?
Get the facts, then act
In a chapter titled 'Business blunders and booby traps', Getty says that many mistakes in business and in life result from a failure to distinguish between fact and opinion or hearsay.
He once commissioned a geologist to report on the potential of an oil lease. The report said there was little chance of finding oil, so he sold it. The lease later turned out to be part of the huge Yale oil pool. Getty writes. Yet he did not blame the expert, only himself for not getting another opinion and accepting it without question.
Businesspeople frequently accept as fact anything they have heard or read without doing their own investigation or study. This is not so bad on its own, but when the results will affect a whole enterprise and the livelihoods of workers, it is an important point. If you have made a decision that is based on facts, stick to it. Have the courage of your convictions. The relaxed businessperson, Getty says, is always much more effective, and if you have done your homework your resolve will be less likely to be sabotaged by worry.
Getty himself gained a reputation as a miser because he famously put a payphone in the hall of his Sutton Place mansion. (Guests had been using the regular phones to make transatlantic calls). Yet with the passage of time, we can see that if it were not for the man's dedication to eliminating waste and maximising resources, millions today would not be enjoying what he left. The author is now, after all, more famous as 'Getty the art collector and philanthropist'. The collection he created is one of the world's best - as anyone who has been to the Getty Museum at Malibu, California, will attest.
The man was a great believer in the free enterprise system, but was not the arch-capitalist many people think he was. He never complained about high wages, taking the Henry Ford view that a workforce that was not well-paid would not buy the products you were trying to sell. As for unions, he respected their desire to better the lot of the worker he considered them a legitimate part of a productive economy.
When he was named 'richest man in the world', he had a hard time explaining to journalists that he did not sit on mountains of cash; nearly all his wealth was tied up in infrastructure and operations, and he was working 16-18 hours a day to keep it all going. He admits his marriages suffered and fell apart as the result of his dedication, and there were books he had wanted to read and didn't have the time for - but on the whole, he reflected, he had led a rich and rewarding life.
Source: 50 Success Classics: Winning Wisdom For Work and Life from 50 Landmark Books by Tom Butler-Bowdon (London & Boston: Nicholas Brealey)
"To be truly rich, regardless of his fortune or lack of it, a man must live by his own values. If those values are not personally meaningful, then no amount of money gained can hide the emptiness of life without them."