Life In Perspective: J. Paul Getty

“The Meek Shall Inherit The Earth—But Not Its Mineral Rights.” -J. Paul Getty

Lived From 1892-1976
Billionaire Industrialist, Oil Magnate
Founder of Getty Oil

Memorable Quotes:

“If you can count your money, you don’t have a billion dollars.”

“Formula for success: rise early, work hard, strike oil.”

“There are one hundred men seeking security to one able man who is willing to risk his fortune.”

“In the Depression I did what the experts said one should not do—I was a very big buyer of oil company stocks.”

“The individual who wants to reach the top in business must appreciate the might of the force of habit and must understand that practices are what create habits. He must be quick to break those habits that can break him and hasten to adopt those practices that will become the habits that help him achieve the success he desires.”

History:

-Was born into his father’s oil business in Minneapolis, and spent summers working on oil fields.

-Graduated college in 1914 at the age of 21 with degrees in economics and political science, vowing to make a million dollars within two years. He achieved that goal in 1916 by buying oil leases in “red-bed” (red dirt) areas of Oklahoma, and discovering oil where most believed there was nothing to be found.

-He then retired under the age of 24 to a California mansion and playboy lifestyle. After partying and enjoying women for two years, he returned to work in 1919 with father.

-During the following years, he and his father amassed millions trading leases and drilling new wells.

-As the great depression hit and the stock market crashed, J. Paul bought millions of oil shares and took control of Pacific Western Oil Corporation, which held large reserves and heavy cash balances. Over the next 20 years, using Pacific Western, he gained control over Tidewater Oil and Skelly Oil–which grew vertically to include reserves, refineries, and retail concerns. Merging all his petroleum business interests, he formed the multi-billion dollar Getty Oil Company.

-In his riskiest gamble, in 1949 J. Paul paid Ibn Saud, the first monarch of Saudia Arabia, $9.5 million and $1 million annually, for a 60 year lease on a barren tract of desert land. After 4 years, and an additional $30 million in exploration expenditures, J. Paul hit pay–discovering fields which produced over 16 million barrels of oil annually. Following this discovery, and later oil price spikes of the 1970s, he was said by some to be the richest man on earth.

-In 1973, his rebellious 16 year old grandson was kidnapped while visiting Rome. The captors demanded $17mm for his safe return. J. Paul refused to pay the ransom on the grounds that paying would immediately place his other 14 grandchildren at similar risk of kidnapping. The captors cut off the 16 year old’s ear and a lock of his hair, mailing these to J. Paul. Refusing to pay the ransom still, the captors dropped their demands to $3mm, and J. Paul paid $2.2mm–the maximum allowed for a tax deductible payment, and loaned his son the remaining $800k at 4% interest.

Lifestyle: 

-J. Paul was known for his many failed marriages and affairs. He once said, ”A lasting relationship with a woman is only possible if you are a business failure”.

-He had a great interest in art, and amassed a collection which has become the J. Paul Getty Museum, with two centers available for visitation in southern California.

-Despite his great wealth he was reputed for being a miser. He installed payphones in his London home, and took pride in washing his own socks to save money. Additionally, he enjoyed telling the story of how he waited with a group of friends to get into a dog exhibition at a reduced price. “I’ve always watched things like that,” he would say.

Philosophy:

-In a 1958 article entitled, ”The World Is Mean to Millionaires”, J. Paul commented that, “If I were convinced that by giving away my fortune I could make a real contribution toward solving the problems of world poverty, I’d give away 99.5 percent of all I have immediately. But a hard-eyed appraisal of the situation convinces me this is not the case…however admirable the work of the best charitable foundation, it would accustom people to the passive acceptance of money.” 

-Always Develop Successors – J. Paul once said, “I’m a bad boss…A good boss develops successors. There is nobody to step into my shoes.” Indeed, a Getty successor was sorely needed, as when J. Paul died, Getty Oil was left in confusion, and later became the center of a historical corporate battle between family and board members over control and operations of the company.

Learning More

-To learn more about J. Paul Getty, see:

Wikipedia.
“The Getty Oil Takeover Fiasco”
“J. Paul Getty Dead at 83; Amassed Billions From Oil”
“Oil & Honor: The Texaco-Pennzoil Wars”

Photo source 1, 2.

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  • http://twitter.com/jmorf James

    Thanks, interesting summary! He’s a great story of determination and drive. There are a number of similarly interesting tails in the early days of the oil industry, well highlighted by a book you’ve missed in your “Learning more” section: Pulitzer Prize Winning “The Prize” by Daniel Yergin. It’s quite a tomb, but, at the risk of using a far too overused phrase, it is a “must read” for anyone interested in resource economics or resource investing.