Book Review: How to be Rich

How to be Rich - J. Paul Getty

In How to be Rich, which was interestingly published by Playboy, Getty covers a wide variety of topics, ranging from autobiographical stories on how he made his money (starting as a wildcatter in Oklahoma), various desirable behaviors and traits of executives, his views on non-conformity and culture, a quick guide to investing in stocks, real estate, and fine art, and his thoughts on money and values.  While many portions were fairly straight-forward and mostly common-sense, I did enjoy his anecdotes and the history involved in his stories.

Here are a couple that I particularly enjoyed, the first one habit:
There was a time when I was a fairly heavy cigarette smoker.  Then, several years ago, I was on a vacation and motoring through France.  One day, after driving for hours through some particularly foul rainy weather, I stopped for the night at a hotel in a small town in the Auvergne.  Tired after the long and difficult drive, I had dinner and went up to my room.  I undressed, got into bed and quickly fell asleep.

For some reason, I awoke about two A.M., acutely aware that I wanted a cigarette. Switching on the light, I reached for the cigarette package I'd placed on the nightstand before retiring. It proved to be empty. Annoyed--but still wanting a cigarette--I got out of bed and searched the pockets of the clothes I had been wearing. The search proved fruitless, and I went on to group through my luggage in hopes that I might have accidentally left a pack of cigarettes in one of my suitcases. Again I was disappointed. I knew the hotel bar and restaurant had closed long before and guessed that it would be worse than useless to summon the crotchety night porter at such an hour. The only way I could hope to obtain any cigarettes was by dressing and then going to the railroad station, which was located at least six blocks away.

The prospect was not very pleasant. The rain still pelted down outside. My car was garaged a considerable distance from the hotel and, in any event, I had been warned the garage closed at midnight and did not reopen until six o'clock in the morning. The chances of getting a taxi were nil.

All in all, it was clear that if I was to have the cigarette I wanted so badly, I would have to walk to the railroad station--and back--through the pouring rain. But the desire to smoke gnawed at me and, perversely, the more I contemplated the difficulties entailed in getting a cigarette, the more desperately I wanted to have one. And so I took off my pajamas and started putting on my clothes. I was completely dressed and reaching for my raincoat when I abruptly stopped and began to laugh--at myself. It had suddenly struck me that my actions were illogical, even ludicrous.

There I stood, a supposedly intelligent human being, a supposedly responsible and fairly successful businessman who considered himself sensible enough to give other people orders. Yet I was ready to leave my comfortable hotel room in the middle of the night and slosh a dozen blocks through a driving rainstorm for no other reason than that I wanted a cigarette--because I felt that I "had" to have one.

For the first time in my life, I was brought face to face with the realization that I had developed a habit so strong that I was willing--automatically and unthinkingly--to let myself in for a very great deal of personal discomfort merely to satisfy it. Instead of simply enjoying the pleasure of an occasional smoke, I'd allowed myself to form a habit that had grown completely out of hand and was obviously operating contrary to my best interests, producing no commensurately beneficial results. Suddenly sharply aware of this, I rebelled mentally. I needed only a moment to arrive at a decision. I considered it an excellent idea--and an ideal time and place--to rid myself of a habit that was certainly doing me no good.

Having made up my mind, I took the empty cigarette packet that still lay on the nightstand, crumpled it up and tossed it into the wastebasket. Then I undressed, once more put on my pajamas and got back into bed. It was with some sense of relief--even triumph--that I switched off the light, closed my eyes and listened to the rain beating against the windows of the room. In a few minutes, I drifted off into a sound and contented sleep. I haven't smoked a cigarette--nor have I felt any desire to smoke one--since that night.
And another on labor negotiations:
Some years ago, for example, representatives of a labor union sought to negotiate a new contract with a company I owned and I met with them at the bargaining table. Their demands centered around an hourly wage increase which I knew the company could not afford to grant in full. I did, however, believe we could meet the demands halfway and felt that such an increase was justified.

Before the negotiations began, my labor-relations "experts" urged me to give no hint of this in the early bargaining sessions. "Play it close to the vest," they advised. "Offer nothing at all until the last possible moment, when the talks reach an apparent impasse--as they doubtless will. Then start low and edge the offer up slowly, raising it only as much as is absolutely necessary."

To my way of thinking, this approach smacked strongly of bazaar haggling. It seemed to me that such a strategy was beneath the dignity of the company and an affront to the union representatives' intelligence and could only serve to cause lasting bitterness on both sides. As I owned the company outright and thus would not be taking risks with the interests of other stockholders, I had no compunction about following my own, and in my opinion, wiser, counsel. I decided to try an experiment.

I went to the initial bargaining session armed with a few simple--but accurate, informative--reports. These showed the company's production costs and output, its profit-and-loss statement for the previous year, and reviewed its over-all financial situation and the outlook for the immediate future. I listened patiently while labor stated its position and demands. Then I handed the documents I'd brought with me to the union spokesman and took the floor.

"I suppose we could be here for days, arguing back and forth," I said. "But, as far as I'm concerned, it's more sensible to start off where we'd have to end up in any case. The company is unable to give you all you're asking--the reports I just handed you will prove that. You can have half the wage boost--and that's the absolute limit at present time. If production and profits rise in the next year, I'll be glad to talk seriously with you about the other half."

Having said my piece, I glanced around the table, noting with considerable amusement that my aides looked horrified, and the union representative appeared astounded. I thereupon suggested a recess--a suggestion the labor side seized upon gratefully. We adjourned the meeting, agreeing to resume it in the late afternoon.

My assistants were glum. They were certain I had taken the first steps toward giving away not only my company, but my shirt and theirs as well. They were convinced I'd handed the union the proverbial inch--and that it would consequently insist on taking its mile. At best, they expected the union to double its demands; at worst, they feared a long, costly strike.

When the meeting resumed, my aides filed into the conference room with the air of men being led to the tumbrel.s I said nothing, but grinned inwardly at their discomfiture. I still believed I had assessed the situation correctly and had followed the right course, a belief soon verified by the union spokesman's opening remarks.

"To tell you the truth, we thought we were in for a long, tough fight," he declared. "But you laid everything on the line and gave us all the facts at the beginning--so there's really nothing to argue about." He paused and reached across the table to shake my hand.

"Mr. Getty, you've just gotten yourself a new contract," he announced with a broad smile. The remaining details were quickly agreed upon and the contract duly signed. My "experiment" proved to be a success that had long-lasting and beneficial aftereffects.

Within the next 12 months, production and profits rose sufficiently to justify granting an additional wage increase. A lasting bond of mutual respect was established between management and labor. To this day, any disputes are still discussed and settled in the same sort of atmosphere, and the company has been singularly free of labor strife. The straightforward approach backed by facts worked--just as it has in most similar situations I've encountered during my years as a businessman and employer.