Life is a Business – Chapter 10
A series of essays on the past, the present, and the future
Since my Father had great intellect, but no business savvy, I had to look outside the house for advice as a young man. My first blessing was hanging around Jan’s house and learning new family dynamics at their dinner table. Joe Storey was an unassuming schoolteacher and potato farmer who was an astute investor while Vera was a tough as nails Director of Nursing at the local hospital. She was “herding cats”, with hundreds of nurses and aides, while working as a respected peer to doctors and corporate heads on a daily basis in an era when women were not often allowed to be leaders. Emotionally, financially and psychologically, I grew more between 13 and 17 at their house than mine. My senior year in high school, I studied the men in town who had the best long term reputation for business success and integrity, then made appointments to visit them and ask for guidance. The response I got from these men was amazing-several had tears in their eyes and said I was the first young person who ever asked their advice. They opened up their hearts to me as what they remembered that they were so long ago in the Great Depression. They respected me because I respected them. Don’t ever forget this-you must respect others to earn respect…don’t confuse fear with respect. They all told me a similar story about saving 10 cents a week in the 1930’s, then 25 cents in the 1940’s and a little more each year. One man said: “If you leave the bath tub stopper in an empty bathtub and the faucet drips just a little…aren’t you amazed to find the tub half full in the morning?” I shared this with an economics professor who laughed and said that they had just given me proof of one of the most important economic theories: “The Time Value of Money”. He went on to explain the Rule of 72, which states that, in the absence of taxes, you divide the rate of annual return into 72 and you will know how many years it takes to double your money. Now, that got my attention!
Capital formation is a factor of time and money, so when I did the Rule of 72 calculations, I realized that I could be a millionaire by age 65 by investing just a small amount in IRA’s, if I did it early enough. At 10% APR, my money would double every 7.2 years and I had over six cycles at age 20, so do the math: start with $5,000 and double to $10,000/20,000/40,000/80,000/160,000…then, $320,000!!! If I could just find and invest $5,000 for four years, I could guarantee reaching millionaire status at 65, even if the rest of my career was unproductive. I saw the roadmap and how to drive on it with what I had until I could get something better. I had time and a burning desire to achieve my goal of financial independence and personal freedom from being under the thumb of others who viewed me as just “part of their strategy”. I started walking, then I started running, then I started flying by the time I hit my 50’s.
Now, let’s talk about the day I decided that I would go to that “Hollywood and Vine in seven days”, no matter the cost, no matter how hard, no matter the pain and sacrifice…I had to go.
At age 15, my Dad rented me out one Saturday to do some yard work for Mrs. Mary Florence Smith, my favorite high school teacher. Just like in the car magazine ads, I peeked in the windows of the garage underneath the garage apartment out back near the alley and BAM! I saw a 1951 MG Roadster on blocks with pleated leather seats, running boards, tear drop headlights, wire-spoke original wheels, and a rumble seat. I asked Mrs. Smith if she would sell me that car and she said: “I sure will- Cleve has gone to college and will never fix it up…” I said how much? She said “$300…I had the car of my dreams in my grasp and could see keeping it for the rest of my life…and would have except for what happened next.
My Dad pulled up in our old Ford farm truck, he got out with a tired walk, covered with dust from plowing fields as I raced towards him with bursting excitement. I told him of the deal and asked him if I could borrow the $300 to get the car…his eyes saddened, his lip quivered as his head bowed and tears ran tracks through the dust on his cheeks and splashed on the gravels under my feet. In a broken voice, this great bear of a man, at 47 years of age, after surviving the Great Depression and D Day at Utah Beach said “Son, I don’t have $300 and I can’t borrow $300…I’m sorry.” I no longer cared about the car, I hurt to my bones for what this man had to do-humiliate himself before his son. I stared down at those tears on those gravels and swore to God that that would never be me-I might not give my kids what they want, but it would not because I did not have the money.
I realized that Mom and Dad were broke and had my older brother at UT in Knoxville, hanging on by a financial thread and I was a burden to them all. I went out to South Pittsburg Knitting Mills and got a job as a janitor, which paid $1.35 per hour part-time at night and on Saturdays and paid for my own clothes the rest of the time I lived at home in high school.
It is painful to tell that story and I can walk to the exact spot I was standing that day and likely pick up the gravels, but my friends, that is the real reason Metalworking Solutions exists today…I committed that day to a trip, found a road map, set goals, checked my progress and hustled up the resources for each leg of the way until today, when I can see the bright lights of Hollywood and Vine with two years to spare until my deadline of 65.
As Paul Harvey would say on the radio “And…that’s the rest of the story!”
By Bill Hewgley