Billionaire success stories usually start with an educated, ambitious, and courageous man of extreme charisma and brilliance making a life-changing investment decision. Dr. Herbert Wertheim was none of these things… until he made his first billion. What’s his secret?
A Zero-Expectations Kid
Herbie Wertheim was born in Philadelphia in 1939. His parents, Jewish immigrants, had moved to Florida right after WW2 and ran a small bakery. Herbie had trouble in school: he had dyslexia and started skipping classes to hang out with local hoodlums. At age 16, he faced a judge on truancy charges. He was given a hard choice: the U.S. Navy, or a reformatory school. Young Herbie chose the Navy. If there’s a turning point in his life, this might be it.
The Long Way to Success
The Navy turned a “dumb” boy with a history of school and family abuse into a confident young man, and revealed the ambition that lay in the depths of Herbie’s heart. Suddenly, he became a wiz, and started studying chemistry, physics, and mechanics. It was also in the Navy that the idea of investing money first crossed his mind. The Cold War was in full swing, and American aerospace stocks were on the rise. Wertheim used his Navy stipend to buy stock in Lear Jet, and this is when it all began for him.
After the Navy, Herbie worked as a salesman while he figured out what to do next. He went to college in 1963 to study optometry and got a private practice, which he ran for the next 12 years. He invented a chemical neutralizer for eyeglasses that restored tinted lenses back to their original clear state – and this is what made him rich. Well, almost.
Getting Into Big Investing
Wertheim founded Brain Power Inc. to monetize his continuing experiments with eye care supplies. Eventually, he would sell his products to Bausch & Lomb, Zeiss, and Polaroid. Over time, the company started making Herbert good money, but if he had settled for it, he wouldn’t be the protagonist of such an inspiring story.
BPI wasn’t very big – basically, Herbert never wanted to run a gigantic business. All he wished for was to have enough money to invest, and BPI served those purposes just fine. Herbert used the money he made from his patents to invest in industries he knew – tech, chemistry, aviation, etc. Once an outcast, he became a man who bought Apple, IBM, 3M, Microsoft, and Intel shares long before everybody else knew those were killer investments. Eventually, these investments brought him a fortune of $2.3 billion.
Lessons Learned
So, how did he pick the companies to invest in? What rules and principles did he use? Here are some of them.
Invest in what you believe in
If you believe in a company’s intellectual property, i.e. if you truly think it sells a good product, you need to stay loyal to your choice even if its value seems to be going down. “If you like something at $13 a share, you should like it at $12, $11 or $10 a share,” – he would say. Double your investment and wait. The decline will only make it more profitable over time.