The Unknown Billionaires: The life stories of 50 self-made men and women

Xin

INTRODUCTION

When you hear the word billionaire, the usual suspects come to mind – Bill Gates, Warren Buffett, Mark Zuckerberg, Sergei Brin, Larry Ellison, and occasionally, the indefatigable Donald Trump.

What most people don’t realize is that the world’s billionaire population has increased a staggering 1000 percent in only the last 25 years. Almost a century ago – 1916 – the first person to become a billionaire was John D. Rockefeller. If you convert dollars from then to now, he was worth over $500 billion. It gives new meaning to the phrase ‘set the bar high.’

For our new book, we chose fifty self-made men and women from the Forbes list of over 1,600 billionaires in sixty-nine countries.

And while you may not know their names, you will probably know of their achievements – many of which are products that enjoy worldwide distribution.

Some of these stories will surprise you. Most of the featured billionaires are good people. However, all is not honey and sunshine.

You will read about gambling and cocaine addictions, billion-dollar divorce, suicide, forgery, sweatshops, forced labor, bribery, fraud, embezzlement, tax evasion, an execution-style killing and an international spy.

Although they are all very gifted and very rich, in the end, minus five or six zeroes, most of these unknown billionaires are just like you and me – both fantastic and flawed.

S. Daniel Abraham

S Daniel Abraham

Birth date: August 15, 1924

Net worth: $2 billion

Residence: Palm Beach, Florida

On June 6, 1978, a twenty-six-year-old mother of four in Georgia named Gloria Jean Davis developed a severe headache accompanied by bright, flashing lights. When her right arm and leg became partly paralyzed an ambulance was called. On her way to the hospital, Davis slipped into unconsciousness. Doctors determined she had suffered a stroke caused by her nonprescription diet pills, Appedrine.

Davis sued the pill maker, Thompson Medical Company, claiming the pills’ active ingredient phenylpropanolamine (PPA) had caused her stroke. Thompson Medical denied any culpability and maintained PPA was safe but agreed to pay a $125,000 out-of-court settlement. According to a company spokesman they paid to avoid expensive litigation.

Margaret Forgnone, director of the University of Florida Drug Information Center in Gainesville, called diet pills the most abused drugs sold legally or illegally. I think the drug is dangerous and should be taken off the market.

The New York Times reported, "The National Clearing House for poison control centers in August estimated that it handles each year 10,000 reports of phenylpropanolamine poisoning and that the drug forces at least 1,000 to seek emergency care. The Medical Letter, a nonprofit publication that keeps doctors abreast of the latest developments on drugs, is also skeptical about the effectiveness of chemical dietary aids, as is the American Medical Association."

Thompson Medical Company, which marketed several products fueled by PPA, took issue with all the reports that suggested the pills in recommended dosages caused hypertension, strokes, or psychoses. Spokesmen insisted the benefits far exceeded the risks for the vast majority of the American public. But the writing was on the wall now that the Federal Drug Administration had PPA in its sights. (The FDA eventually outlawed PPA in over the counter diet aids due to an increased risk of stroke in younger women.)

By the 1970s, dieting was a $10-billion-a-year industry and growing. The owner of Thompson Medical, a World War II veteran named S. Daniel Abraham, needed a new product that tapped into the United States’ national obsession with weight loss.

The irony was that Abraham, who owned a medical company, was not a doctor or even a researcher. In fact, he had no college education at all. He was simply an entrepreneur with a nose for what the public wanted.

Abraham was born in Long Beach, New York in 1924 and after graduating from high school he eventually went into the military, fighting in the Army infantry corps in Europe during World War II. After his discharge in 1945, Abraham went to work at his uncle’s small drug company in New York. One day he came across an advertisement in a trade journal for an itch-relief cream and decided to purchase the product and its manufacturer for $5,000. Abraham traveled neighboring states offering doctors and pharmacists samples of his product and leaving advertising posters. Abraham called his company the Thompson Medical Company.

Abraham used his first profits to hire chemists and pharmacologists to modify other company’s products. He also purchased the rights to smaller and less-successful product lines from other pharmaceutical companies, which he modified and then marketed as Thompson Medical products.

In 1956, the company introduced its first diet product, called Slim-Mint gum that contained a hunger suppressant called benzocaine. By 1960, Abraham added a line of diet pills called Figure-Aid. That was followed by Dexatrim, which became the best-selling diet pill on the market and pushed the company past $50 million in sales by the end of the 1970s.

In the late 1970s Abraham decided to bring back an old product idea from the 1950s that may have been ahead of its time. Metrecal, a liquid diet product, had enjoyed some success but weight loss had not become a consuming issue for most Americans at that time. But the cultural revolution of the mid 1960s coupled with new fashion trends that celebrated thinness above all, had made dieting the true national pastime. He was convinced the United States was ready for a convenient, fast meal promising weight loss. He called it Slim-Fast.

However, just as Abraham was getting his diet drink division off the ground, a story came out attributing more than 50 deaths to a liquid protein drink. It was discovered that the heart attacks were caused by the lack of vitamins and minerals in the diet drink. In 1976, the FDA outlawed liquid protein diets due to missing amino acids and complex proteins. All fluid meal-replacement products were pulled from the shelves.

To make up for the loss of earnings, Abraham went public in 1979. The offering brought in $8.4 million in earnings, which he mostly spent on advertising and promotion.

Through his medical community connections he teamed up with MIT physician George Blackburn to come up with a nutritional shake recipe that could be substituted for a proper meal. Blackburn’s formula included the 24 vitamins and minerals found in today’s product. For a convenience-seeking culture, a slimming meal on the go was a perfect fit. But they key now was getting the buying public to believe that his drink was slimming, nutritious, and safe.

Abraham named his product Slim-Fast and its slogan—a shake for breakfast, a shake for lunch, then a sensible dinner—was one of the most recognizable ads of the time. And Americans responded.

Slim-Fast’s hook was offering a product that was modeled after a tasty milkshake. Abraham’s diet system was based on restricted caloric intake. Each Slim-Fast contains between 200-250 calories. To lose weight the consumer drinks two shakes a day totaling five hundred calories and an average dinner of around eight hundred calories. While many people claimed the diet worked, there were also critics who argued that Slim-Fast took weight off at first but as soon as the person stopped using it they gained back their lost weight plus additional pounds.

No matter. The product sold and its success brought similar products into the market. To stay ahead of the competition Abraham added snack items, new shake flavors, and offered Slim-Fast in cans as well as powder. In the mid-1990s, Slim-Fast would offer meal bars that could also be used as meal replacements. He used celebrity endorsements to give his product additional appeal. To further the brand, Abraham also published The Slim-Fast Body-Mind-Life Makeover.

Dexatrim wasn’t Thompson Medical’s only headache. In 1981 the Federal Trade Commission (FTC) filed a complaint against Thompson Medical for false advertising for insinuating Aspercreme contains aspirin when it didn’t. One television advertisement used by Thompson stated:

‘When you suffer from arthritis, imagine putting the strong relief of aspirin right where you hurt. Aspercreme is an odorless rub which concentrates the relief of aspirin. When you take regular aspirin, it goes throughout your body. But, in seconds, Aspercreme starts concentrating all the temporary relief of two aspirin directly at the point of minor arthritis pain…Aspercreme. The strong relief of aspirin right where you hurt.’

The case went to the Supreme Court, which ruled in February 1987 to let stand the ruling that Thompson Medical had engaged in false and misleading advertising. The company was also banned from claiming that any of its non-prescription analgesic drug products were effective in relieving minor pain unless the statement was supported by at least two adequate and well-controlled clinical studies. At the time, Aspercreme was the second leading ointment sold for arthritis relief.

The court ruling did little to impact Thompson Medical’s healthy bottom line, and in 2000 Abraham sold Slim-Fast to Unilever for $2.3 billion. The sale gave Abraham, who has very close ties to Israel, the means to fund his expansive philanthropy by putting his money where his heart was. In March 1988, after returning from a trip to the Middle East region, Abraham formed the Center for Middle East Peace & Economic Cooperation with then-Utah Congressman Wayne Owens.

I was in World War II, Abraham noted. I lived in fox holes. I saw my buddies get killed. The horrors of war are unbelievable. It’s not the way to solve problems. We have to learn that peace is worth everything. We have to learn how to live together."

Over the years he has also endowed an S. Daniel Abraham Chair in Middle East Policy Studies at Princeton University, and a Chair in Nutritional Medicine at Harvard University Medical School. He built a wellness facility for Mayo Clinic employees. He has funded the Dan Abraham School for Business Administration and Economics at Bar-Ilan University in Israel, and the S. Daniel Abraham Israel Program at Yeshiva University, and Honors Program at Stern College for Women. Abraham is vocal in his belief that Israel needs to give Palestinians their own country in order to finally secure a lasting peace. To that end he authored the book Peace is Possible. His second book, Everything is Possible: Life and Business Lessons from a Self-Made Billionaire and the Founder of Slim-Fast was published in 2010.

It turns out the timing of selling Slim-Fast to Unilever could not have been better. After reaching sales of more than a billion dollars in 2002, Slim-Fast sales nose-dived 21 percent in 2003 as low-carb programs like Atkins and South Beach became the diets du jour.

Trying to keep up, Unilever reduced the sugar in Slim-Fast by half and rebranded it as Slim-Fast Optima. The company also offered discounts in hopes of keeping dieters from jumping ship. It didn’t work. In 2005 Unilever wrote down more than $850 million to account for the decline of the brand’s value. In 2009 Unilever recalled all cans in the U.S. over concerns of bacterial contamination. In mid 2014, it appeared Unilever was looking to sell the company to recoup whatever it could.

Abraham offered to help revitalize the brand he created, saying, If I still owned it, it would not be that way. I would be fighting harder.

Even as he neared ninety years of age, Abraham showed no signs of slowing down or of stepping back from his philanthropy. If you can’t give what you have, then you don’t own what you have. If you don’t use it for the proper things, then you don’t own it — you’re just holding it.

Andrew Beal

Daniel Andrew Beal

Birth date: November 11, 1952

Net worth: $8.4 billion

Residence: Dallas, Texas

Some become billionaires because they are born with that greed-is-good gene that makes wheeling, dealing, and making money the equivalent of human catnip; others are inventors who come up with the next great service or product, whether mechanical or digital, that people suddenly can’t live without; and then there are those like Daniel Andrew Andy Beal who have the smarts, savvy, and foresight to identify and capitalize on less obvious opportunities.

Part financial divining rod, part innate risk-taker, Beal is a self-made billionaire who approaches business like a math problem, and the challenge of finding the solution is just as important as his growing net worth.

Beal’s close friend, former Welcome Back, Kotter actor-turned-poker player Gabe Kaplan, calls him one of the last really independent men in America, who does exactly what he wants to do whenever he wants to do it. Most of the time he goes against the grain.

It’s a trait, along with his entrepreneurial spirit, that was apparent even as a youth. Beal grew up in blue-collar Lansing, Michigan, the son of a mechanical engineer father and state government secretary mother. He had an instinctive sense of supply and demand. As kids he and his brother charged other neighborhood children to throw darts at balloons attached to wooden boards in his family’s backyard. He also mowed lawns and installed security systems.

But his gift was thinking outside the box. One of his first enterprises as a teenager was repairing used televisions then selling them to low income families who couldn’t afford new models. He also started a business that physically relocated houses from one part of Lansing to another after a planned freeway left abandoned houses in its wake. In 1971 when he was nineteen, Beal bought a house in Lansing for $6,500 and rented it out for $119 a month, which became his most profitable business venture to date.

He attended Michigan State and studied math but dropped out and enrolled in night classes at Lansing Community College. After turning 21, Beal went to Las Vegas and used his math skills to become a successful card counter. His abilities won him a lot of money and eventually got him kicked out of most casinos.

There were no such limitations in real estate. So in 1976 Beal attended a federal auction sponsored by the Department of Housing and Urban Development (HUD) in Washington, D.C. with plans to bid on an apartment complex in Gulfport, Mississippi. Instead, he ended up bidding $217,000 on a Waco, Texas, apartment building. He won the bid and paid with $17,500 of his own money and a $200,000 loan.

Beal later admitted, I had never been to Texas. My plan was to finish college at Baylor, but I got busy starting little businesses and never did.

Waco city officials wanted a $300,000 bond guaranteeing that Beal would continue renting solely to low-income tenants. Clifton Robinson, who owned a local insurance company, agreed to put up the bond. Beal moved to Texas to oversee his investment and sold the building three years later with an estimated million dollar profit.

Inspiration can hit Beal almost anywhere. While attending a real-estate seminar in Washington, DC, he was fascinated that so many people in nearly all industries were happy to pay for the privilege of listening to the advice of designated experts. So he founded the National Institute for Continuing Professional Development (NICPD). From the late 1970s to the early 1980s, the company hosted seminars in major cities across the United States, earning Beal a tidy profit. But such businesses were almost sidelines because his primary focus remained on real estate.

In 1981 Beal and Robinson teamed up again and purchased two blighted, HUD-owned Newark, New Jersey, apartment buildings. The exterior bricks were chipped and falling off. The elevator doors were missing and the shafts were filled with discarded furniture. They paid a relative pittance of $25,000 and then repaired the building, which a New York physician bought two years later for $3.2 million.

Beal used the profits from the Newark deal to open Dallas-based Allegiance Savings and Loan Association that was later renamed Beal Financial. It was 1988 in the middle of the Texas Savings & Loan (S&L) crisis and many of his peers thought he was taking a questionable risk jumping into a foundering industry. But Beal saw it as a golden opportunity.

I’m not sure I’d call it taking chances. I think of it as attributing a different level of risk to a problem than the rest of the world attributes to it. I’m not that much of a risk taker. I just take situations that people perceive to be high risk, and I decide that they can be managed to low risk. I’m really very conservative. All the other banks were failing. What better time to start a bank? If everybody else is going broke, that simply means your competition is going away, Beal reasons.

He bought nonperforming loans at steep discounts from the Resolution Trust Corporation (RTC), a temporary federal agency established in 1989 to oversee the disposal of assets from failed S&L’s. He then worked to secure payments on the loans, a process many other institutions found too cumbersome. But it generated more than $27 million in income for Beal in 1995 and helped the bank increase it assets to $1.2 billion by the time the RTC closed in December 1995.

Not all of Beal’s hunches paid off. For example, his expansion efforts to markets such as Russia and Mexico ultimately failed. As did his venture into outer space. In 1997, Beal started an aerospace company designed to compete with NASA. His original idea was to start a satellite company but the cost of getting them into space was daunting. That gave Beal the idea to provide the rockets that carried communications satellites in orbit. Some of his staunchest business defenders thought the idea was perhaps overly ambitious, even by Beal’s standards. He was aware of the skepticism.

People told me I was crazy. Someone said I was having a midlife crisis, Beal said shortly after the company opened. I thought it was a reasoned decision and continue to believe it’s a reasoned decision. It can be managed to very acceptable risk.

At its peak, Beal Aerospace employed more than 200 workers and it is estimated he spent at least $200 million of his own money on the project. Despite his steadfast belief the cosmos was an opportunity waiting to happen, Beal Aerospace closed in 2000, unable to compete with what he termed NASA’s subsidized launch systems.

The ironic footnote to this is that NASA has adopted the policy of supporting private-sector companies, such as Elon Musk’s Space Exploration Technologies, or SpaceX, which manufactures and launches advanced rockets and spacecraft. It was a case of Beal being a little too ahead of the times.

Unlike the stereotyped workaholic billionaire, Beal’s wealth gives him the freedom to pursue outside interests such as mathematics. For example, he was fascinated by Fermat’s Last Conjecture (which theorized that no three positive integers a, b, and c can satisfy the equation an + bn = cn when n is greater than two.) In 1908 an award was offered to the first person who could prove the Fermat’s conjecture. A British mathematician finally succeeded in 1995.

Inspired, Beal has offered a $1 million prize to anyone able to prove or disprove his own Beal’s Conjecture. (For those interested, his conjecture states that if Ax + By = Cz, where A, B, C, x, y and z are positive integers and x, y and z are all greater than two, then A, B and C must have a common prime factor.) Some billionaires buy islands; Beal enjoys uber brain teasers. But his motivation was to use the prize as a carrot to get young people engaged with math, which he credits with helping him make many of his business decisions.

A less altruistic pursuit that has truly set Beal apart from his business peers is his passion—some would say obsession—with poker. Texas Hold ‘Em, of course. When they say things are bigger in Texas, they might be referring to Beal’s penchant for high stakes poker games. Shortly after the aerospace company closed, Beal went to the Bellagio Hotel Las Vegas and challenged some of the world’s top poker players. While his skill was debatable, his enthusiasm was unquestioned—as were his deep pockets.

Between 2001 and 2004 Beal played a team of professional poker players who anted up a combined $10 million against his $20 million in a series of private matches. Dubbing themselves The Corporation, the pros included Chip Reese, Jennifer Harman, Phil Ivey and several others. Beal’s play ran hot and cold. He lost as much as $9.3 million one day and won $11.7 million another—the latter considered the world’s record. The three-year game ended in 2004, but Beal returned to Las Vegas in February 2006 for a rematch. According to reports after being up approximately $13.6 million one week, Beal lost $16.6 million to Phil Ivey over the course of three days.

Afterwards, he said he was through with the high-stakes gambling and calls his competition with The Corporation not much of a story. I went to Las Vegas, got interested in playing poker and that’s it. I happen to love rolling the dice sometimes, he said in spectacular understatement.

But, perhaps the worst hand ever dealt to Andy was the divorce lawsuit filed by his wife, Simona. She attempted to sue him for $20 billion. Beal’s lawyer called it ‘extortion,’ but remained calm through it all. That is probably because Andy Beal had a prenup and a postnup agreement in place. The results are sealed by the court, but it is a safe bet Simona didn’t get what she was demanding. If she had, Beal wouldn’t be here.

Andrew Beal usually makes headlines for his uncanny ability to read the economic winds. During the real estate and credit boom in the early 2000s, Beal restricted lending, believing the bubble had to burst. Then after the severe 2008 financial crisis, he bought aggressively acquiring a failed Alabama bank in 2009 and another in New Mexico the following year. When the dust from the recession cleared, he had increased Beal Bank’s assets to over $10 billion.

There’s no real secret to Beal’s formula: he looks for assets, generally packages of loans and bonds, which are worth more than their market prices. What sets him apart, however, is his knack for picking the right assets time and again.

Danny Payne, a former commissioner of the Texas Department of Savings and Mortgage Lending, observes, There’s a lot of Beal wannabes, but with all due respect I don’t know of a single individual who would have the same ability that Andy does to manage those risks. It took me years to get that comfort level and realize how unique this person is.

Arthur Blank

Arthur Blank

Birth date: September 27, 1942

Net worth: $1.8 billion

Residence: Atlanta, Georgia

Necessity isn’t just the mother of invention; it can also fuel the fire of ambition. For Atlanta Falcons owner and Home Depot co-founder Arthur Blank, growing up in a family of modest means—coupled with a deeply competitive nature—instilled the drive to succeed and continues to compel his personal and professional pursuits.

Blank grew up in Queens, NY, where he, his older brother Michael, and parents lived