Word: buying
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Dates: during 1960-1969
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Bluhdorn then decided on a strategically wise maneuver. He used his profits to buy into a more secure and promising business: auto replacement parts. In a Balkanized industry that has thousands of small suppliers, he figured that the best goal was to knit together a nationwide network of manufacturing plants, warehouses and distributors. First he bought and merged a small-parts manufacturer and a parts distributor, then gradually parlayed profits and loans to add more companies...
Last year he joined with two other millionaire land investors, Bernard Selwyn and Herbert Edwards, both 42, to form Rammco. The company's aim: to make money by letting other investors in on the land boom. The partners buy up huge plots in Southern California, then sell chunks to investors and manage the land for them until its value rises and the owners sell out to other investors. Rammco earns its profit by charging a 10% commission on each transaction, now manages $50 million worth of land...
...that they have climbed high, the newly rich are sensitive about the "millionaire" title and seldom brag about it. But they respect the power of money, like what it can buy. Great wealth seems to produce a security and mobility that usually enables the rich to grow richer. By putting $1,000,000 into municipal bonds, an investor can get an annual income of $35,000 tax free. Most of today's newly rich entrepreneurs use their money in a more venturesome way, but few of them live on as grand a scale as the ostentatious millionaires...
...sturdy and prosperous, the owner should either float a stock issue to expand it or sell it out to a bigger company that might be willing to pay generously for a well-established specialty business. With his profits, plus any borrowing he may need, the young entrepreneur can then buy control of a still more promising business...
...millionaires also detect tempting prospects in recreation. Among them: marinas and vacation homes. The growth of leisure and the youth market will also strengthen businesses involved with education, including secretarial schools and accounting schools. Oakland Lawyer Michael Rafton tapped that market: In 1960 he put up $31,000 to buy a struggling company that had been making big cargo boxes, switched it into the manufacture of portable classrooms, and last year sold out at a huge profit. The demand for time-saving conveniences can be turned into wealth. Chicago Millionaire Charles Stein, 37, got started by squeezing oranges into juice...