okay so this episode's going to be a little different what I'm going to do first is go into detail about what I learned from having a 2-hour lunch with Sam zel he sat directly across from me for two hours I got to stare in his eyes and hear crazy crazy stories uh that this from his amazing you know more than six decade career of being an entrepreneur and then after that you're
going to hear a normal Founders episode where I go into detail about what I learned from Reading William zor's autobiography so and that came about because as I was talking to Sam zel I was like hey uh when I was reading your autobiography Sam you mentioned reading zondor autobiography when you were a young man and you thought it was very valuable you got a you got a good idea out of there and I was like I bought the
book after reading about it in your autobiography and then he said to me he's like have you read it I go no not yet and then he said in his like deep voice he's like read it and so that was good enough for me if Sam zel tells me to read a book then I will do I will read the book and so that is what the episode's going to be about so I want to start at the end first and then I'll
talk to you about how this came to be and all the stuff uh a lot of the stuff that we talked about so I get home after spending over two hours with them and the first thing I say to my wife this is what I mean by starting at the end I was like I want that I want that to be 81 years old still fired up about your work still unbelievably curious around about the world traveling all over the world
still reading books still listening to podcasts still uh doing deals one of the first things we talked about is this deal that he was doing it just lit up like completely in love with his work and and life in general and just unbelievably curious he's got this uh famous quote that he says like people sometimes ask ask me when I'll retire and he says retire from what I love what I do and just his energy and his
enthusiasm and his sure like full zest of life life I got back and I was on like a high like I was like high from the conversation right and so that's I was like I want that when I'm 81 that's what I want to be like I want to still be fired up I still want to be you know working like this idea where you know as entrepreneurs like our life and our work is really Inseparable it's not a job
it's not some you know even though they can be very difficult it's not drudgery it's not something that we do like we do it because Sam has he could have if it was just about money he could have retired you know 50 years ago 40 years ago whatever it was he's not doing it for the money he's doing it because he loves to do it because he has to do it because he wants to do it and then the other thing that I
told my wife too was like I know without a shadow of doubt that I'm on the right track this idea of hey we need to go back through the history of Entrepreneurship we need to read the biographies and autobiographies of the people that came before us to learn from them I'm supposed to be you know like I've read almost 300 biographies I've been doing this project for seven years
so far you know like the business history guy so to speak I there was not one thing that I could bring up that Sam did not already know this guy has deep historical knowledge about the history of business real estate entrepreneurship any obscure person I could bring up right I pulled everything I could think of I bring up a name he knew the name he knew the company the person owned he had
read the book and so having the opportunity to have lunch with samel and then a few weeks later have dinner with Charlie Monger what you notice is the similarities is like okay Sam sold his company you know for almost $40 billion it's like you don't build a company and sell it for $40 billion and then learn all this stuff like he was had an insatiable thirst for knowledge and
information that could be useful to his life and his career his entire life he knew this stuff as he was building his company same thing with Charlie Munger it's like he didn't you don't become a multi-billionaire then in your 90s decide hey I'm going to start learning from history it's like no they did this from when they were unbelievably young and they never stopped that is how I know that you and
I are on the right without a doubt we're on the right track with what we're doing here okay so that was the end let me tell you the beginning and how this came about and this goes back to something that I F I firmly believe and I feel that podcasts podcasting in general is a miracle um you really never ever know who is listening and so I get a DM from Rick gon who has been friends a close
friend of Sam for like two decades Sam has been a mentor of his and like really helped and guided and a like been an inspiration in his career and so he he I I get this and I thought it was fake like I guess just to start there right because you get all kinds of bizarre messages um like when you have a podcast obviously and this came from a like a Twitter account where it's just like
there was no picture there was no content they didn't follow anybody it's just saying hey this is who I am I also live in Miami I run in investment firm and I I was going to see if you wanted to have dinner with Sam zel and me in Miami he's in Miami all the time and he's like he's always hungry for information and he's like I actually turned him on to Founders which he loves
and he really liked the episode that you did on his in on his autobiography and So I responded I was like this would be incredible I would love to absolutely but I thought it was fake like that was just like there's nowhere in the world like why would Sam zel want to meet me I had read his biography I'd heard him on podcast I watch videos of him and first of all get into like when you meet him
it's like he's the same dude the same guy that you see on TV the same guy giving interviews same guy giving speeches like that's him and that's another thing that I found so admirable I found the same thing when I was meeting with Charlie Monger is like they are authentic to themselves and I that's something obviously trying to start to be but like I just love seeing that because sometimes you see like the
public Persona is fake and it's not who they are and yet with Sam zel and Charlie M like oh you're the exact same person and a lot of people have said that like when they hear me on the podcast they meet me like oh this is like having a having dinner with you is like having like a three-hour long Founders episode and so I was like okay yeah I would love to and then I just forgot about it cuz I was like there's
like Sam zel does not want to meet me like this is absurd like I'm just some little podcaster you know reading biographies in in a room by himself like why the hell would he want to meet me that's just so bizarre and so then I uh then I went up like a week or two passes and then Rick texts me and he's like okay he's coming to give a speech at this conference on this date are you
available that day and first of all I'm like okay it's Sam zel like there's nothing else in my [ __ ] calendar right like this guy sold a company for $40 billion like yes I am available anytime and and I will I would even fly to anywhere in the world to meet this guy like are you kidding me and so anyways now we have a date we have a time I still do not believe that this is
going to happen I was like no this isn't going to happen and then a couple days later it's like okay yeah now it's set for this restaurant at this time I'm like okay now we're getting really specific like this is some kind of weird hoax you're doing like this is pretty crazy but I still didn't tell anybody about it because I didn't believe that it was is actually going to happen and
so on the day um on the day of like now we have a date in time now it's the morning so I'm like okay well this this might happen like I'm supposed to go to lunch with Sam zel and then I was like okay as it got closer I was like okay maybe it is a lunch with Sam zel but maybe like it's not gonna like I'm not maybe he invited a bunch of people and I'm like the token podcaster or something like that to be like 25 people
there I won't actually get to talk to them that's not what it was at all it was just me Rick and Sam for for 2 hours it was incredible he and Sam sat right like directly across from me I looked him eye in eye got to talk I got to ask him any question I wanted it was absolutely incredible but the morning of I'm like okay I tell my wife listen I'm going to share my location with you uh
in case they kidnap me there's some crazy [ __ ] Happening Here I might get kidnapped at least you know where I am and so I drive to the restaurant at the time I'm supposed to be there and uh me me and Rick agreed to meet like I think like 30 or 45 minutes or maybe even an hour hour in advance and we wind up having this really interesting conversation because he's got all these
crazy interesting stories as well he's got a really interesting career and then he's telling me this this story and then uh he looks over my shoulder and he goes oh there's Sam and I turn around and it's Sam zel by himself like I was like expecting like maybe an Entourage or I don't even know what I was expecting him to be carried in carried in like a like an Egyptian pharaoh or something and so
he shakes my hand he sits down right in front of me and the first thing I say I was like you're [ __ ] Sam cell and he just laughed and laughed and laughed and so one of the first things I got to talk to him about was something that his family has uh in common with my family if you read Sam's autobiography uh you know that his father uh it was actually very interesting I think his
father was like a grain Traer if I remember correctly and so we had inside information he knew like the the stuff going on with Hitler was not good and so his father escapes with with his his wife Sam's older sister uh Sam's not born at this time I think his wife his his mom is going to get pregnant on the way over because I think uh they're in America for like 90 days by the time Sam
is born so what we have in common is the fact that they had to escape uh like I mean Hitler is way worse than Castro but Castro is pretty bad too and so they leave on the last train of Poland and then the Nazis wind up bombing that train they didn't know that so what was interesting is how many people that Sam's father he was trying to convince the rest of his family like this is bad
we need to get out of here and imagine how difficult a decision that is like you've lived in this country your whole life you have family friends jobs and you're you're somebody's trying to convince you like you have to get up and leave so it just takes like a different kind of person and I was like Sam like I had a very similar experience my grandfather was the same age as your father when this was happening he was
married he had a baby and he just saw that bad [ __ ] was coming with Castro and he wind up leaving everything you know didn't have any money came to a country uh he wasn't a citizen of didn't even speak the language and just literally has to flee to try to protect his family and so I was thinking about that story before meeting Sam and when you hear Sam talking also in his autobiography it's
like this guy's obsessed with learning he even says like in um I think he did he did this fantastic episode on the uh Tim Ferris podcast uh Peter Tia actually interviews Sam zel for the Tim Ferris podcast and he says this like like I just read and read read I'm never without something that I'm reading he's constantly searching for interesting information so one of the questions I
got to ask him is just like I can't help but notice that your life your family's life was changed because your father had access to valuable information and yet and I'm reading your story and it seems like you did that all your life and in his case he he applied it to the B like is there am I right to pick up on that like you're insatiable hungry like uh thirst for knowledge you saw the benefit
it could it could literally save your life not only could it stumble onto an idea that you can use it's helpful in your business but like in your case it literally saved your life and he's like yes that's exactly it and he's just been this voracious reader like the crazy thing is right I'm this guy like it speaks to a lot like the idea that Sam's how valuable Sam's time like it's insane like that I got two
hours of it is is just I'm so thankful like I got back and I was like that is uh you know a lunch he may not remember and I'll never forget you know because I'm sure he meets a ton of people he's got all kinds of you know contacts and business deals and everything going on and I still I really do appreciate the fact that you know I'll never forget this like I'll remember till the day I
die and uh what's so interesting about it though is like he's telling crazy stories from his six day six decade long career about all different business deals building companies buying companies uh selling companies just all all kinds of fascinating interesting stories right and you would bring up something and he would explain like oh yeah that business that's happening
today is like what this guy did this you know I'm making up names because I wasn't taking notes while we no one looked at their phone it's actually funny the one time he looked at his phone uh he was we were talking about one of the pieces of advice that he had um was you know listen the wealthier you get you're just buying like it's just nicer things of the same stuff that always happens he's like you don't want
to own a bunch of things cuz then you have to take care of them you know you have to manage them he's talking about out in your personal life and so his whole point is just like you know he he has a place Chicago and the place in Malibu and it was funny because you know how rich and famous you are when he wanted to show me pictures of his house he Googled he h me his phone and it was
Google images and it says Sam zel Malibu house and I was like all right man that that's a goal of mine like that's pretty crazy um but one thing he was saying is like listen you know you don't want to get caught up in that you don't want to own a bunch of stuff you know you're going to make a lot of money in your lifetime and you just realize like okay now you have a house and you just keep
like you're just buying more it's the same things that just gets a little nicer don't get caught up in that and so his main thing that he said to me over and over and over again his main piece of advice that you know we probably talked about in like six different contexts was go for Freedom optimize for Freedom I'm going to read some of the notes that I took after he's everything
comes down to Freedom I'm paraphrasing obviously right he's like if you get the freedom you can control what you do every day and you'll love it and if you love it you'll be very good at it and then the money will come with it you have to love the dayto day does not mean it will be easy that does not mean there won't be pain but you have to love it and he's like I never chased money I
chased freedom and freedom got me the money and his point is is like there's no point in being rich if you're not having fun he say this was very fascinating too um you know CU imagine the kind of people that Sam zel talks to and meets and he's like I meet a lot of Rich guys and they aren't having fun I'm still having fun then he said he's still riding his motorcycle I know he's still traveling all over the world and
actually this brings up another thing that Sam has in common with a lot of history great entrepreneurs like why do so many of the people that you and I study on this podcast like think of Sam Walton he knows he's dying and he takes time out he's got cancer all over his body and he takes time out of the few precious time months he has or maybe year left on this Earth and he writes an
autobiography and he summarizes what he learned in 60 years of his retail for the benefit of future generations of entrepreneurs we may compete to against each other while we're living but in the end like they all want to pass on what they learn for the benefit of future uh generations and so that led me to something I was asking Sam was like like he flies in also let me go back to this
he did say one thing he's like listen you know don't get caught up in owning a bunch of [ __ ] it's just like you're just going to keep buying nicer versions of the same stuff like it's just not worth it that's not what life is about he goes there's a true luxury in life he's like he's like there's one exception try to get to private jet he's like that makes a big difference he loves his jet he had um we
talked about this because he had just given the speech at this really uh like impressive conference um and he gave the speech and then went directly uh to to lunch with me which is such a silly I can't believe that that even that sentence just came out of my mouth and it's actually real I I don't believe that but uh I was like oh so we talking about like oh so you didn't like spend
the night here goes no he's like I fly in on my jet I give a speech I'm having lunch to do and I leave again and so he's talking about he was telling me like what he was doing he's like flying to you know London to give a speech to a bunch of other entrepreneurs investors flying all over the world doing this he does this constantly and I'm like Sam why are you giving these speeches you
don't have to do this like like why are you doing this and what he said is exactly what you and I have discovered in all these autobiographies he says it's an obl obligation I'm getting Goosebumps it's an obligation for me to share with other entrepreneurs what I learned think about how crazy this next sentence I'm about to tell you is right because we're history shows that humans are terrible
predictors of what we actually think we will make us happy right and so he's like listen I hated writing the autobiography it was very difficult but I'm so glad I I did it and he says my favorite day of the week is Monday and I was like okay why is that he goes because that is the time that's the day that me and my team go over all the inbound messages that we get from people that read my book and they tell them how
it changed their lives they got ideas they got the inspiration they got and it's exactly when you read and you're going to hear me talk about it in this episode because I've already recorded the episode I'm doing this intro after and I quote directly from Sam's autobiography where he's sitting there talking about it's like listen uh he was this is 1971 uh zor's book comes out 1970s Sam
is a 30-year-old man already you know 10 years into this uh this real estate career of his and he's like I I read Z and dorf's book and I found a really valuable idea and he tells you what it is how cool is that like that's exactly it's the same thing when when me like when you listen to found podcast when you're reading the biography you're doing exactly today what a young Sam zel
did you know you never stopped doing he's still reading I mean one of the first things we talked about is some of the books he's reading oh this is another crazy thing and I'm sorry this is like disorganized I don't have like you know I didn't write this out in advance but what was fascinating was he's obsessed with podcasts he's obsessed with information in general like he's reading books reading uh you
know newspapers magazines everything talking to a bunch of people doing deals you know he says I'm doing deals this is what I wrote down in my notes after so I don't know if this is a direct quote but I hope it is he's like I'm gonna be doing deals I'm gonna be doing deals till I [ __ ] die and I hope I'm that the same way too man I don't want to retire like why like you find work that you love to to do you
know like what what did Coco Chanel do Enzo Ferrari Steve Jobs what are Charlie Munger and Warren Buffett doing they're still doing this Charlie's 99 when I went to his house and he can still tell you what's going on still telling you different deals like it's crazy it's like why would you ever quit um but what was fascinating is like brings up the fact that he likes podcast he starts
asking me questions like why did you start a podcast how do you start a podcast what's the business model like and then at one point I I said I go Sam you've been building businesses and making millions literally making millions decades before I was even born I need to be asking you questions but again that ties into this just like insatiable level of curiosity that you're going to
find that the top entrepreneurs have it's like they're they want to know about the world around them and obviously some of that information is going to flow down so they can use it in their business right but even if it doesn't like this guy's not going to get rich off of podcasting right he could he'd have the number one show if it was just him talking [ __ ] um I'd listen to
that I'd listen to every single episode but he just insatiably curious still reading books still asking questions you know decades after ever needing to work again and the best way to summarize this is a quote that I pulled from his interview on Tim ferus podcast I'm con this is Sam talking I'm constantly adding and increasing my knowledge in every direction I can and then there's
two other things that I wrote down uh after I met him that was fascinating because you know I'm obsessed with Michael Jordan episode 212 if you haven't listened to it yet that book is a 600 Page biography of Michael Jordan uh literally changed my life and he he he's like yeah I know Michael Jordan he knew him when he was a young man Jordan used to go to Sam Zelf for advice and I was like what do you think about Jordan
and he goes Jordan is an extraordinary individual the other thing that was fascinating is everybody knows that I'm obsessed with Edwin land right I keep talking about Edwin land over and over again I'm like man like if Steve Jobs is studying Edward land calling him a hero pattering his his uh his own work after after Edward land we should really pay attention to them you I've read five
I've read every single book I can find an edland I've read five five biographies I've edland three of those I've read twice and I think I've done like six or seven episodes on them Sam zel knew exactly who Edwin land was right where a lot of young entrepreneurs don't and I think that's devastating and they should but not only did he know Edwin land he told me an Edwin land story that I had never even heard cuz it
turns out check this out in like the 1960s I think this is when it's happening Sam Z went to law school with Edwin Lance's Patton attorney's daughter his daughter was there and remembers the night that in New Mexico when Edwin Lan goes and meets with her father to write down and to put on paper his ideas for the creation of a new industry the industry that Edwin L is literally going to
invent which is instant photography I do want to wrap this up with really what Sam was saying like the main message he's just like he's like I optimize for freedom and I only do [ __ ] that's fun and he was having fun forever and if it's fun if you enjoy it like if you can find work that feels like play which is the exact line that I learned from Nal Ravon but also I found in Michael
Jordan's autobiography that's exactly what he said people in his autobiography people like oh they always talk about work ethic they don't realize like to me it was play this like I was able I I had a bad work his mom would talk Michael J's mom would say that like you know with outside of outside of sports he was actually kind of lazy which was shocking and his whole point he's followed up on
that Jordan followed up on that he's like oh what you see as work ethic I just see as as playing and I feel there's a lot of uh there's a parallel between Sam zel you know who's still on it seven days a week still doing deals still trying to find interesting things to to work on and interesting people to work with and it's because he's optimized for freedom and he only did [ __ ] that was fun and so there's one
other thing and I'll wrap this up and we'll get into the episode on zindorf which again if Sam zel is telling you to read the book If you haven't read the book I talked about this in the episode especially if you're in real estate Nob brainer you have to read the book there's so much stuff in that book that you'll be able to understand that I won't because I'm you know that's not my
industry and it's just a fun book like full of crazy stories but I do want to I pulled this transcript because right after I had lunch with Sam zel I went on Jim o Shan's podcast which is called infinite loops and I pulled a transcript because some of the stuff I was like okay that was like fresh in my mind I want to make sure that I'm not missing anything and I found something and I've
already like alluded to it previously I'll wrap this up here I'm just going to read I'm going to read read this paragraph and it's talking about something me and Sam had in common is that the fact that you know I think 18 members of his family died I had a bunch of family members that never left Cuba and his father Sam zel's father would tell him over and over again you don't know how lucky you are to be born in
this country right and so that's the way Sam still feels to this day and it's like I had that experience too uh you know when you're the son of a Cuban immigrant like people literally the unit uh the University of Miami this is this is hard data to come by because if it's not like people are announcing in advance that they're going to the shore of Cuba and sending their children on
these rafts and hopefully they they land in America because because you're not announcing it beforehand they had it's they're they have a hard time figuring out like how many people have died you know how many people didn't make it like you can go and look I I've seen this in person I actually grew up meeting people that came over on rafts like a little kid and you hear these stories like
that's going to impact your the way you think about that and so uh the University of Miami estimates I think somewhere like quar million people maybe 200 to 300,000 people uh died at Sea and so this idea where it's like you're raised same as I was raised by a father saying you know like you're very blessed to be born in this country where you know you not you don't have to worry about a Hitler or
the stuff that we had to run from or the the amount of just genocide that took place where we where our family is from and so I I heard that same story like you know you're very you have no idea how lucky you are to be and my dad's not an American citizen to this day to this day and I just happen to be American citizen because decades before I was born my grandfather had the the foresight like
oh we got to get the hell out of here and I just happen to be born here something that uh Sam saw when he was younger that his family was watching videos uh and when he was like six years old of all these like Jewish bodies in dump Chucks and it was just dead bodies that the Nazis had killed and then put in dump trucks and when we were talking about this this is what I referenced
earlier I said Sam here's the weird thing this is me now quoting myself from his other podcast it's going to weird here your dad was vicious for information and that saved his life and yet when you tell the story of you being a teenager a young man you were like 19 or 20 years old and you were also for racious information and I asked them is that the same thing is that the same
concept and it's like oh I know how valuable information is it can literally save your life and in an entrepreneurs case the right information can literally build a fortune and he's like it's the exact same thing and so if you and I could ask Sam zel for advice I think his advice would be constantly add and increase your knowledge in any direction that you can and I sincerely hope that the work that
I'm doing on Founders podcasts helps play a role in your life and in your work we were not meeting our obligations for more than 3 years i' had been maneuvering to keep a suddenly greatly overextended company from actually falling over the edge of the cliff to this end I had gone deep into personal debt but on that Friday afternoon in May 1965 time ran out 26 years of work was
now moving down the shoot I told my driver to take me back to our Madison Avenue office this is where I had started web and naps climb and here I would stay with it to its fall in large part it was a matter of my own personality I like to build I had ideas all kinds of ideas that nobody else was willing to carry out so I carried them out myself we branched off in several directions at once that is an entire
story in one sentence and leads to his bankruptcy we branched off in several directions at once we were buying land and properties putting up individual buildings in various cities creating a string of new shopping centers and industrial parks across Canada and drilling for oil off the coast of South America The Secret of any great project is to keep it moving keep it from losing
momentum that's actually good advice and this for me meant a constant flow of telephone calls and trips Often by company plane to Montreal Chicago Washington Cleveland Philadelphia Denver and Points West in New York and in every town where we had interest there was a constantly changing scheme of contracts agreements And Trades to be kept in motion I have never been afraid of debt one day when the head of the Morgan Bank
stuck out his hand at a gathering of bankers and said to me Bill you look like a million dollars I said back I'd better I owe you 3 million at that time we all laughed but in May 1965 no one was laughing web and nap had been wiped out and his reaction might surprise you once we had completely gone under there was almost a welcomed Stillness for month after month we had
been working to raise cash to make one last deal to fend off or pay off creditors now all actions ceased even our phones were disconnected I could no longer act for the company I became in effect a b standard at a wake and an official nonperson a role both unfamiliar and unenjoyable a number of people who used to call on me vanished quite a few people who I tried to call were suddenly not available only my
creditors were ever anxious for a chat I learned that there was betting that I would choose to end the drama Samurai Style by committing suicide there were moments when my depression was absolute but killing myself was something I was not about to do only my personal assets not my brains were in Hawk I still knew how to make money for people moreover with the Fantastic pressures of web and
naps last few years off my back I was beginning to feel like a man suddenly released from solitary confinement my conscience was now clear for the present I was busy and relaxed Maran that's his wife Maran and I saw more of each other we went out to play and we traveled we spent our summer in France I had turned over our home to creditors but we had acquired a quiet place and we were happy
we were planning another trip in the spring of 1968 Marian flew to South America for a month from there she had fly to Guadalupe in the Caribbean I flew down to Guadalupe to meet her there I arrived 2 hours before Marian's plane was due the scheduled arrival time came and went but no plane landed a few moments later the announcement came over the loudspeaker the plane had crashed
The Sensation from then on was one of being in a Dream from which I couldn't wake up after Marin's death I declared personal bankruptcy wow what a start to this book this guy goes from being the greatest real estate man in New York maybe the entire country in the 40s and 60s to blowing up his company after 26 years then a year later his wife dies in a plane crash and then two years later in 1970 he publishes
this book so that was an extra from the book I'm going to talk to you about today and the one Sam zel told me that I had to read uh one that Sam zel talks about in his autobiography that he read when he was a young man he's actually around 30 years old when he read this book and that book is zindorf the autobiography of the man who played a real life game of Monopoly and won the
largest real estate Empire in history and so before I jump into his early life something I was thinking about this morning before I sat down to talk to you you cuz this book is over 50 years old and what is interesting is I I'll go into more detail on this later but there's so many times where what makes this book so fascinating not only this guy had an incredible career he's got a lot of good ideas about building
businesses and a lot of bad ideas that you and I definitely need to avoid right but he also knew everybody like there is uh four five maybe 10 different well-known historical figures that are historical figures to you and I today because they've all passed on that are alive in this book and there was just something that hit me real heavy this morning where this guy's been dead for I
don't know 40 years uh I think he died shortly after the book uh was published and it's un like we can't talk to him we can't interview him and what I realize is like reading this book is first of all to have a one-sided conversation with somebody that went through one of the most unique life experiences and work experiences that that has ever lived and it's also a form of like being
able to interview or to ask him questions because you you'll understand if you read this book and I hopefully I can convince you to buy it and read it I mean if Sam zel tells to read it I think that's good enough right but um what happens is by the time you get to the end like you know who he is some I told you before in some of these cases where you and I go over these books like
sometimes you feel like wow I know who this person is and sometimes they're still kind of like they're more of like a figure that's far away where I feel like Z and derf by the end of the book becomes like this old friend of yours and you just live through it's like you gather around you're like his grandson you gather around and he's just recounting the story of his life to you and by the end you you feel like you
definitely know who is as a person and the reason I bring that up is because that feeling is a good feeling I my life is better off for having read this like spent the last week going over bunch of red material on zindorf and I feel like getting to that end that completion is first of all it's not something that we see in modern day life like every single thing if especially we're on audio
devices all the time like those are just never- ending feeds everything we're looking at whether you're scrolling Netflix or scrolling you know Instagram it never ends where you get to the end there's a completeness to this it's like this is over the time I spent with zorf will be longlasting so I'm not sure why I was thinking about that this morning or where that idea or feeling came from
but anytime that that happens I'm I'm sure to tell you about it so I want to jump right into his early life we don't spend much time there because we get right into we get right into this guy's insane career but there are just a few sentences you know there is you know two or three chapters on his early life I just pulled out a few sentences that I think give you will give you an idea
exactly who he is and so he says by the time I was eight or N9 years old I had discovered that if I acted up enough I could get thrown out of Sunday school each weekend and spend the day fishing what may be the greatest quote about entrepreneurs ever came from the book that I covered last week which is comes from Avant shenard and he says if you want to understand the entrepreneur study the juvenile delinquent and if you
sit there and actually think about what Ivon is think what is saying like that's exactly what we're seeing here it's like you'll understand the way they think if you look at the juvenile delinquent talks about his dad uh my dad was a cultured quiet and kindly man who did not believe in strict authoritarian controls and I was his only son so what he's telling us is his parents and he's
going to say his mom did as well his parents let him follow his natural drift mother also let us grow in our own way and zorf is the rare high school and college Dropout and then he has a great line about this I did not finish High School most of the courses bored me completely so he takes like their version of like I guess what we' call call uh today in America the GED uh so
you drop out of high school but you can take a an exam if you pass the exam you get like the equivalent so he enrolls in college he says at age 17 I entered New York University and then he has a great line here though I now hold four honorary degrees I was a college drop out classes were dull and a waste of time I was anxious to be in the real world of business so I quit college so
then he's in his early 20s and he starts working his first job in the real estate industry for his uncle there's actually a really good description I'm going to tell you I think that there's actually better description in this uh this article that was sent to me by a listener who knew I was doing uh this book and so it's called Uh zindorf revisiting the legacy of a master builder I'll leave the link down below
you can read it in you know five minutes but it's just going and reflecting back on his career many decades after he passed away and so I read the article and I just pulled out some quotes and I want to give you this overview now before we go into the rest of the book because I think it gives you like colors it in beforehand and kind of will make the ideas that you and I talk about
later uh stick even more so first it says a glance back at the life of the developer William zindorf Sor is proof that there are no new ideas Under the Sun that is the main thesis of this podcast when I was sitting here thinking I was like I went and looked up I was like okay this this book came out in 1970 if you read Sam zel's autobiography he says it was around 1971 where he picks up the book that
means Sam zel was like in his early 30s made he was around 30 years old when he first read the book and later on in this book we'll get into what Sam zel said about the Hawaiian technique which is like the main idea that he took away from this this uh book that he got from zorf that he used not only his real estate career but also his business career as well but what I was thinking
is like oh he's doing this line a glance at the life of developer zorf is proved that there are no new ideas Under the Sun we are doing the exact same thing now together that Sam zel was doing 50 years ago when he was a young man trying to learn from the great people that came before him looking for ideas that help them in their work I just love that idea and then this another quote from the
article no question he was the greatest real estate guy New York has ever seen he dominated the nation's real estate industry from the 1940s through the early 1960s in a climate like today he would have been worth a trillion dollars and then this is the part that I want to read to you because a description it's a summary of where we are in this book where zondor is about to tell you and I
about this his first job and why he had to leave because he felt his uncle was screwing him over early on zor's Uncle challenged him to fill a half empty building at 30 2 Broadway which The Firm had just purchased by the time the uncle returned from a European trip zondor filled all but two small offices but instead of praise his uncle demanded to know when he would rent the remaining spaces zindorf quit the next day and
this is the punchline if he was going to make any money uh any real money in real estate he decided he would have to do it on his own and just two more things from this article this is the anti- advice this is the advice where I feel we're sitting down and we're having this oneid conversation with zorf he's telling us hey avoid this uh zorf employees were having to sneak them down back elevators
to avoid the growing number of creditors banging on the front doors this is the early 1960s when everything starts to unravel and really the anti- advice uh that I got from zindorf would be what Charlie wer says like your job in life is to get in a great business and then stay there and Charlie's point here is like I can tell you that advice you're just not going to do it uh it's so hard
to build a wonderful business you're not going to be assaulted from the outside most most likely you're the one that's is actually going to screw it up it's goes against human nature to get into something good and actually stay there and so this is the description of the business that zorf he had it it was in his hands if we were to take the assets that web and nap had in 1961 and value them at today's
values this article is being written in the uh early 2000s so maybe like 2007 I think if we were take his assets uh in 1961 and put them in today's values uh they'd be worth between 25 and $30 billion so all he had to do was sit still and this is a description of him he had to do every deal that came down the pike whatever the deal was he wanted to do it that's not an exaggeration I
try to keep track of every single weird this guy did not contain himself just a real estate I'll get into some of the stuff he buys one the funniest things I've been telling stories with friends today or this week I was like dude I'm reading this book about this guy he's like in his 30s he's working for web and na they're like oh we like this club so they buy a nightclub right and then he
uses it he uses the nightclub as his office it's like if today me and you buy a club and they're like hey we have to have a meeting and our office is essentially like the VIP room of the club every night he's just and he has like this phone set up it's just he's a hilarious guy but the point is like he'll just do all kinds of deals uh which you know we'll obviously go into
so it says uh whatever he whatever the deal was he wanted to do it so talks about the fact that that was his first uh his first job working for his uncle I really just want to pull out I don't want to go into much detail there because I'm just looking for ideas that you I can use in our business right and so this was very fascinating this is his sales technique his his uncle gives him
the job and then takes off to Europe and so he's like okay well how do I fill a half empty building I have no experience and so then he just goes to every single building this guy's Relentless every single building on Wall Street I tackled the job by taking the elevator to the top floor of every building on Wall Street then I would work my day my my way down floor by floor canvasing each office on each floor I would March in
with the Bold statement I understand you're Le is expiring and I'd like to show you a space at 32 Broadway of the prospective tenants I approached one out of five would come over to 32 Broadway to have a look one of every five that looked would take a lease but that was enough and so he gets back and he he does the calculations like how much money he made his uncle he was paying
him $25 a week so his uncle doesn't give him any praise but he also the reason he quits is because he's like why okay $25 a week I'll bump you up to $40 a week and and z I was like what are you talking about that did it the commission to an outside broker would have come close to $25,000 I told Sam what he could do with this $40 a week and I left and that right there is what I wrote on this page
an entrepreneur is born even when technically he's a junior partner and he's he's working for somebody's company he's got founder mentality he acts like an entrepreneur all the way through and eventually he's in complete control of the company another anti-ice on him this is something that's going to come up a lot and I'm going to repeat myself because it's the main theme of the book
this Guy cannot stop spending money as soon as money hits his pocket from the time he's a young man until he's older he just spends and spends and spends it and then he is addicted to debt which obviously leads to his downfall unfortunately and again I'm not trying to criticize this guy we're trying to learn from him I think he's extremely likable like this is one of my favorite books I cannot believe the stories that
are in the book and you'll just fall in love with like his gregariousness he's a promoter I feel like he's the wise old man telling us hey don't don't do this even if he says if he could do it all over again he would just do the same but he would do it bigger so I don't even know if he learned his own lesson so he says uh he's doing a bunch of deals my commission on this on the sale of this
building came to $8,000 so he was wise to be an entrepreneur why would I take 40 bucks a week I do one deal and make $8,000 now here's where he messes up I was 23 years old and I never had so much money before it made me uncomfortable and I thought we had better spend it quickly so he takes this uh it's going to be his first wife but he's just dating her there's not they're not
married yet actually they get married and then he's like okay I have $8,000 I need to spend it immediately and he goes and takes this like long ass honeymoon to Europe and he goes to Paris and he meets all these other high rollers and he gets back he's got no money and that's not good because this is the 1929 crash in the Great Depression and so there's there's a few interesting things
like what he's doing during the Great Depression I do want to pull out something here because this isn't there's parts of this book so obviously if you're in real estate you probably already know who zindorf is I would imagine you've already read the book if not obviously pick it up there's a lot of things in here that you will understand that I won't understand because real estate's not my business
but he has these just drastic examples of and I guess real estate's really no different than other asset prices that have that we seen these these uh these like uh Financial panics where he he's detailing all these crazy deals that are happening because all these people are overleveraged and I'm like zorf you notic this when you were a young man why didn't like how could you not avoid the
same fate so he talks about the the the people that own the Ritz Carlton Hotel and he says what was happening is the people that were not leveraged the people that had a bunch of cash no debt he said they were corner Ing and squeezing these are the words that he used right and so one example he says the Ritz H hotel which cost $25 million to build sold for $725,000 and it had
$100,000 worth of liquor in it at the time and he goes into such great detail that's when I wrote I was like I wonder why he didn't learn this lesson like he was addicted to leverage he's so close because he starts working his big break he works for the the Aster family these are the descendants of John Jacob Aster which we'll get to in a minute he was actually the first multi-millionaire in
uh US History he he points this out on the same page he says the non-borrowers right the people that owned it free and clear which we're going to get into this is absolutely insane the non-borrowers such as the Asters who owned all their properties free and clear could ride through almost any storm and so when I got to this part another real estate guy that I did a podcast on which was
fascinating this guy named Francis greenberger it was episode 243 he became a billionaire because he's one of the first people to do co-ops in New York City I think this is like in the 1970s but he has a line in his autobiography which I thought was fascinating and he says this ruthless industry talking about real estate right everybody's like oh it's so easy to make money in real
estate and Creber is like no it's not this ruthless industry has created far more bankruptcies than it has billionaires that is a great line saying no is the most important judgment you could make so that is francis's advice to us what I the reason I came up is because you know there's a lot of real estate billionaires a lot of people that make a lot of money in real estate but the pages that I'm on when they're in
the Great Depression they are Francis is right this ruthless industry is creating far more bankruptcies than it does billionaires and so even during the Great Depression he never left the real estate industry he just kept working in it till he died so at this point he's a young man this is what he's doing he's a New York City real estate broker he made his living uh by two ways one he was a
negotiator for property owners trying to salvage their Estates by renegotiating mortgages and he also was busy scouting out increasingly scarce buyers for properties that the banks and insurance companies were doing their best to unload says though I didn't always earn it this is the point this is why I'm reading this to you though though I didn't always earn it I managed to spend
close to $220,000 a year during the the depression so he'd spend 20,000 even if he didn't make it you see are we seeing a reoccurring theme already early into the book by the standards of the 1930s we were affluent but we were often broke and so he is married he's also this wild party like crazy guy so as we can imagine he's this isn't going to last very long he's going to go through his
uh this is his first wife so he's going to get divorced my personal life though was not nearly so successful as my business career it was becoming increasingly obvious to both Irma and me that we were mismatched I thought of little else but working and then having a good time we drifted apart and I began to find other women increasingly interest interesting and a divorce seemed the only reasonable conclusion
and so then zindorf goes back into his poor money man managing habits unfortunately my road to affluence was erratic I was often in debt sometimes little more than two steps ahead of a sheriff and forever scrambling for some way to turn an extra dollar whenever I did get a little money money I put it I try to put it to work I led an active social life I was especially fond of restaurants this is the not the last
time he's going to say he's like having hard time paying his bills this is I'm only 30 pages into the book and this has already happened so many times that I wrote to myself I feel I should quote James J Hill here uh was so fascinating about sitting down and talking to Sam zel is that every single person this is not an exaggeration every single entrepreneur from history that I brought
up to samel there's not one thing that I could tell like he knew who everybody was even these obscure people so I brought up in the flow of conversation we were talking about something with JP Morgan and James J Hill and the railroads and everything else so I bring up James J Hill he knew exactly who he was had read his biography knew the name of his company off the top of his head there was no
notes in this entire time no one looked at their phone the entire time and so the reason I bring that up is because J like Sam zel knows who James J Hill is Charlie Monger knows who James J Hill is Warren Buffett knows who James Jay Hill is this is who I actually heard like I I think I was listening to them either talk or was reading their shareholder letters and they're like hey they always
I think it might have been Port alac actually they talk about the operators that they really respect and admire and they kept mention this James J Hill guys who the hell is James Jay Hill and so I went up reading a biography on him that was episode 96 I think but the reason I I got to this part I'm thinking about everything that's going on this book I was like one thing that stuck out of my
mind and I hadn't read it says I read the James J Hill back in 2019 this quote from James J Hill I never forgot so I want to read it to you cuz well but unfortunately zindorf is not never is not learning in the 1930s and you know obviously had a hard time learning his his entire life James je HOA understood in the 1800s and this is what he said uh if you want to know
whether you are destined to be a success or a failure in life you can easily find out the test is simple and it is invaluable are you able to save money if not drop out you will lose you may you may think not but you will lose as sure as you live the seed of success is not in you if you want to learn from one of the hardest most formidable entrepreneurs to walk the face of the planet listen to episode 96 I really
need to do to read that that book again I don't think you know i' only did 96 podcast at that point so I don't know if I did it disservice like I have a lot more practice now three times as much practice so but man and and read that book that that guy was absolutely incredible he was the only entrepreneur that if I if I recall correctly he's the only entrepreneur in history to ever
successfully uh build build a profitable railroad without going into bankruptcy first the less successful the less formidable railroad operators were actually easy prey for JP Morgan it was interesting because JP Morgan and James Hill would hang around with each other they didn't really like each other but they kind of like frenemies they would do deals and stuff and so it's like
financial success and financial like Fortress of cash and a profitable company which James J Hill had was like Kryptonite to JP Morgan because JP Morgan would he would he would take over these these crappy run companies these over lever companies these people with you know c and b player entrepreneurs and he did this so often made so much money that they didn't call it reorganization of the railroads they
called it morganization so moving back to this story he's doing he's got about 12 years of just experience he's got like this middling success he's not really figuring things out though he does have this good Network he knows the buildings and knows a lot of people but he's not making a ton of money and so essentially like where we're coming in this book is like he is 33 and frustratingly unsuccessful says the many
dozens of business projects schemes and coups with which I struggled although they ate up time and energy did not seem to be getting me anywhere in by 1938 I felt listen to this I think every entrepreneur has felt this before I felt that all I was doing was scrambling up straight walls imagine if he would have quit here and so he does a good deal with this other there's a private
partnership called web and nap and he winds up we'll get into he I think he fills up one of their buildings and so he says when the rep reputable but if not very profitable firm of web and nap offer me a partnership I accept it so web and nap app is the company it's private eventually he's going to take it over he's going to buy out his partners for I think $5 million we'll get there
later in the book takes it public that is the vehicle that he uses and builds up uh and dominates you know for for in the 40s and all the way to early 1960s but this idea and again I think uh learning from history is a form of Leverage right because at 33 he is frustratingly unsuccessful middling success think about a 30-year-old Sam zel picking up this book learning from using the the life experience of zorf is
leverage Z zel was already at 30 further ahead than zindorf was at 33 obviously never went down the same path like it sold his company for almost $40 billion one of the most successful entrepreneurs ever live but I love this idea like I you know sing Sam Zell he's 81 when I met him and that's what he looks like like you like that's a an older wise man right but that's not the Sam zel that
picked up this book that always blows my my mind when I people probably think I'm some kind of weirdo like I go back and stare at like pictures of what they look like when they were young when they were the one the version of themselves that built the success that the older versions of them get to enjoy that's what you and I are doing right now I just love that idea I can never um I
never stop I never stop thinking about it so really way you think about zorf he's a master salesman this is what he was doing and how he came into web and app in 1937 I had been the broker in the sale of an office building uh to web and naap that the the next year when several major tenants moved out the building began to lose money web and naap asked me to bring in some new
tenants I was able to repopulate the empty floors rather quickly sounds like what he was doing for his uncle you know 15 years earlier they invited me to join the firm and I accepted what I this is why I'm reading the section to you what I brought with me to the company were 13 journeyman years of experience in the buying selling financing and renting of New York real estate I was familiar with
almost every block of property in town I also brought energy and personal drive if some of my partners were rich I was ambitious I became the chief Enthusiast and he takes his enthusiasm to the club I'm just going to read this to you because I just thought it was so funny uh we had a part ownership of a nightclub it turned out to be great fun I had my own corner table with a phone and for 5 years I did as much business
there as for my Madison's Avenue office I just love the fact This Guy's in his 30s in Manhattan doing a business out of a night Club every night that's just hilarious and so this is the part of his life that's really important if we were watching the movie you'd pause right here and you're like oh he's starting to figure out he's starting to figure out how to create value but he's still low
on money but as long as he's focused on creating value he'll get the money and so at this point in the story it's also obvious why this guy went bankrupt so it says uh we started drawing on our own modest Capital Weston nap does not have a lot bunch of money uh we began to do a bit of buying and selling of other people's properties where web and nap did not have the financial weight to
swing a deal alone so they don't have their own money so what do they do they Syndicate and so this is also something that that zor is really good at he built a bunch of relationships and so you know he plays I think he he says at one time in the book he played like instead of musical chairs he played like musical Banks um so he he would take money from you know all different kinds of banks
insurance companies uh wealthy families also would syndicate with people wanting to put money into real estate all over the country and so this is the first uh mention of that we syndicated our projects with other investors but my personal financial situation was unchanged the check for my son's first term at school was returned with the notation insufficient funds and my tailor was waiting payment for my last
two suits and so this middling success may have never changed if he didn't get his first big break this is where he's going to work for the descendants of John Jacob Aster that is the first multi-million multi-millionaire United States when Aster dies in 1848 he was actually the richest man in America now check this out so he dies in 1848 he he had made money in like fur trapping and
then took that money and started buying a bunch of real estate in New York so he dies 1848 almost 100 years later by 1942 his family his descendants owned $50 million of New York real estate free and clear no debt so 100 years later and that's 50 million in 1942 money imagine what that real estate would be worth today and so zorf and his firm are the ones that are actually going to organize
reorganize all their properties they're going to sell off some and this is where he's learning the the the value of Brands the ma a great brand is like magic that applies to a family name just as it does to a company name and so it says once they get the deal it says on June 1942 we were engaged as exclusive consultants for the reorganization of the aster Holdings the next morning the
New York Times printed on the front page the story the front page coverage made us overnight the most important real estate firm in America first he goes into like the nonrational aspects of real estate and brands in general I soon learned that there was an invisible but tangible or about the asra properties that made them attractive remember this part for the very very end cuz he experiences the
reverse so the Asters are like unbelievably valuable has a great brand name eventually web and nap the brand name gets so bad people just essentially waited for him to to starve it'll make more sense when we get there but it's the reverse of what's Happening uh early in his career so he says they had an aura that the Astro properties made them attractive if the great Aster estate had
owned them they must have extra virtues because old Aster had been so shrewd and so he goes to sell off some of these properties but this is what I meant about he's really good at reacting to changes on the board what does that mean this is post Hitler controlled Europe a number of refugees who had come to Hitler or come to United States from Hitler controlled Europe uh these new
buyers were far less interested in the total price of a property than what the actual down payment would be a low down payment gave them maximum leverage for the inflationary rise and values that they were anticipating so what did he do changed he increased the prices right got more for the actual price but uh lowered the down payment I sold for very low cash down payments but steep prices
uh on a sales price of say a million doll for a property that would have sold on the cash market for $400,000 so this might go for $400,000 if you had all cash he's going to charge you a million because you don't have all cash but you only have to pay $50,000 or less as a down payment then he didn't stop there then I would take the mortgage uh I would then turn to the mortgage
companies and sell off my paper when they asked what we wanted from them in cash I would suggest $660,000 I would immediately follow this with the announcement that Aster would accept a second mortgage for the remaining $284,000 of the million million dollar price I hate using numbers and audio but I think if I read through this you'll understand what he's doing here the fact that Aster would take a subordinate
mortgage served as a psychological guarantee making the mortgage buyers courageous enough to take our paper having then converted our paper mortgage Into Cash we then went for and bought more Blue Chip properties at Cash discounts and then we repeated this process if you read the book we are on page 48 and 49 when they go into great detail about the numbers and what he is doing here so that was his first good
idea this second good idea was the fact that he refused A flat fee he wanted to bet on himself when we made our initial proposal regarding the management of the aster estate I had refused A flat fee I explain that when we delivered that he which is the the guy what is his name his name this is there's so many asers this is Vincent Aster that he's dealing with uh that Vincent Aster uh could pay
us what we were worth if we didn't deliver he didn't have to pay us anything at the end of the first year o he he enormously uh enor he tripled essentially tripled uh the earnings from Aster's assets so it says at the end of the first year uh he kept asking us to present him with a bill and I finally did so for the amount of $350,000 when I presented my bill as said pay him and send him a bunch of PL
a bunch of flowers for me and then this is the third and maybe most important good idea that happens at in this section and why I have so many highlights on just two pages because he realizes so what you'll realize like he's an outsider right did not grow up wealthy dealing with one of the most one of the most wealthiest families in the planet and then he's like wait a minute
I can play with these guys when I got to this section I thought of this this quote of Larry Bird uh that actually made a video of him play on Loop kind of crazy but um it's like 20 second clip of Larry Bird that I play for like 2 or three minutes straight because I like what he says and I'll tell you what I I brought up in the past but let me tell you what he says so he says my
relationship with Aster gave me my first close look and in contact with the world which because because of its wealth and exclusiveness fascinated and attracted me however this world was not always did not always capture my M my respect I found Vincent Aster quite amiable sometimes humorous but not very bright if he had not inherited his great great Fortune he probably could not have done
much on his own he lived in a very narrow self-satisfied but not particularly brilliant Circle and so there's a great line I thought of when I when I got to that people muddy the waters to make them seem deep when you're on the outside it always looks more difficult and so uh Larry Bird was reflecting back he went to like this tiny little school for college goes into the NBA and everybody's telling them
like oh like you're not this is a different level you can't hang with these guys and zorf is like going almost like going from amateur levels to the pros and he gets into the pros he like wait I can actually hang with these guys and so Larry Bird says oh they said you never played against a UCLA or Nordo Dame or an IU they said he won't be able to get his jump shot off in the pros he
won't be quick enough he won't be able to rebound he says it took me three days after rookie Camp I found out hey this league is nothing I can play in this league and I will dominate in this league and so with zindorf is realizing in real state in the 1940s Larry Bird is realizing in in basketball in the late 1970s early 198 80s I thought this was actually an interesting idea he had on
the dangers of overnet for if he could if they said let's say he wants to pay you know $750,000 for a property and they say I'll s you for 750 he's like okay I'll just take it he did not he he thought you were doing yourself a disservice like just you know what the value is you know what you'd pay and if they say that don't try to keep negotiating down I don't try I didn't try to bargain I hate
to bargain in my judgment a property is if if in my judgment a property is worth the asking price I see no reason to try for a lot of shrew dealers think this is foolish but I noticed that others tend to lose more business and to poison Relationships by trying to refine an already good bargain Beyond a reasonable point there is a much better flavor left in everybody's mouth when such haggling
is avoided I wanted the property their price seemed reasonable to me and so we were in business and so then he's got an entire chapter on what was his most important deal he ever did this is this thing called he was going to call X City winds up becoming uh the location of where the United Nations is um in Manhattan and this is a wild thing this is why I love reading history because
you know obviously New York City's one of my favorite places to visit and just this idea where if you were living there in the 1940s like you could go to like say you want to go see a show you go to a theater you come outside and there' be like a truck uh hauling cattle uh because Theater District was right next to all the slaughter houses and the smell as you could imagine is not good
and so he has this deal and as he's putting together this deal which is going to go on multiple pages I really think I went back through all the highlights and this going to happen over like six or seven pages and I was like you know what this is really how Zach and dorf's mind worked and this is where I think he had his most Talent like the stuff that this guy had in his mind and
you could argue maybe he didn't have it you know full grasp on his mind considering like his business got so complicated got away from him but he was just able to hold all these different ideas and he winds up buying like 75 it's something like I want to say 75 different properties and just so way he did it so let's just jump into it uh the slaughter houses had been there for so
long that they seemed Untouchable and so they're owned by this company called Swift and Wilson since the Swift and Wilson meat packing companies who own the slaughterous has held an irrevocable and profitable franchise to operating Manhattan there seemed little hope of ever getting them out so it's unpleasant for the people that are visiting there he's like hey can we do something with this so he winds up meeting a real
estate broker who says hey I'm actually married into the Swift and uh uh Wilson family and if you can get a buyer at $17 per square foot we're willing to sell uh so it says dunar that's who he's dealing with dunar had approached us first this is really really important this is something that pops up over and over again you got to figure out how if your if your business is getting a look at
the best deals first whether you're buying companies making investments in early startups whatever it is that you're doing you got to figure out how to get the best you see the best deals first this is something that um like obviously Charlie Bunger and Warren Buffett have mastered uh Sam zel and when we had lunch he was talking about the fact that he was invited into certain deals because of how well known
he was in Chicago in like the in the 1980s which was a fascinating story and the same thing is happening to zindorf here because this previous association with the asers people were like oh the asers think that web and nap and zorf is the guy so essentially they they Outsource their decision- making to other people I guess the more uh main point here Dunbar had approached us first thanks to web and nap's growing
reputation we were getting more and more such first offers and so then we get into how his mind works I thought to myself that at $17 per square foot the property would cost $6.5 million but with the slaughterous gone I was sure the price could jump to 50 75 or maybe even as high as $100 per square foot so he's paying 17 which is expensive now but he's like okay that's expensive for
what it is now but not what we can turn it into that's why he always refers to himself as an entrepreneur finding ways to increase the value of what he's working on then there were the value depress properties around the slaughter houses right you're not going to have many people that want to deal with the smells and all the stuff that comes with that which would also rise in value from
a$2 and5 per square foot base so I said let's keep he's telling dunar let's keep this off the market for a while and this is the deal he pits up he never has any money just never like this never what he's about to do here he does over and over again uh we would put up a million dollars for a one-year option against the total $6.5 million price okay so he's putting up a million they want 6.5
million he's like I'll give you a million at the end of the year we have to pay the remaining $5.5 million doesn't have that money in the meantime the packing companies would quietly make arrangements to relocate and the arrangement between us would be kept secret so not to precipitate a price rise land rush in the area which is what he's going to go do then he's going to go around and buy all these other
properties right the next problem was we to find $1 million in cash so not only does he not have the 6.5 million he does not have the 1 million much less the other 5.5 that he's got to come up within 12 months from now he gets the $1 million because he says I solved that $1 million Problem by forming a Syndicate remember we mentioned this earlier consisting of ourselves the Chicago
Finance year and two New York real estate speculators now that we have the slaughter house option in hand we need as much of the other land surrounding them as possible so that's why he hires these three or four different properties Brokers and sayy buy this up on the low we don't want you know people to find out what we're doing they'll jump in advance of us we picked up about 75 properties an average of $9 per square
foot remember he thinks hey this might be worth 5075 $100 square a square foot these individual purchases were financed by local banks and insurance companies so he's doing all this he's calling it X City but he doesn't actually know what it's going to be so the next thing we determined was what should we do with the parcel land that we assembled and this is where the randomness of Life
comes in suddenly a new totally unexpected possibility developed in 1946 the United Nations had been plagued and perplexed by the problems of finding a permanent home and sudden clicks with zindorf he's like oh it occurred to me that we actually have the ideal site for the UN and so zindorf is plugged in with not only the business Community but also the politicians this is hilarious this is
what I wrote doing big deals why drunk he's at this party he he's drunk on he's drunk on a ton of champagne and the guy that's negotiating for the United Nations is there too so they wind up hammering out this deal and he's like listen I paid six and a half million for the solder houses what would you offer for them and the guy's like would you sell for 8 and a half million and he's
like uh he's like yeah deal and then he goes I had a lot of champagne by that time so he wakes up the next day not realizing he's like did that really happen which is hilarious and he gets a call and he says yeah they're going to give you that uh $8.5 million to the UN and they're going to take your property and then he says the property was being purchased exclamation point I couldn't
believe it and then he said uh then he leaves the office and he goes I carried my hangover home and so I think it's obvious by now this guy's default aggressive he's full like he's got one speed and he's always on his Partners get really uncomfortable with this his partner's actually at web and naap they want to break up and so this is where he's going to buy them out which is
fascinating is the way he frames this because the chapter that where this is going on it's called end of an error start of a rain and so they first suggest him like we should just you know liquidate the business we'll sell off all their assets and then we'll divy up the cash and so he says at first I was upset by my partner's decision to liquidate this is going to remind you uh
and I have one of our favorite aphorisms problems are just opportunities in work closeth at first I was upset by my partner's decision to liquidate my partners felt that web and app should assume a more conservative and more comfortable role I on the other hand was bent on a new program of speculative growth I began to see in their departure not so much potential trouble as a fantastic opportunity I bought my
partners out for over $5 million and so to get that 5 million he doesn't have the 5 million as we already know by now so he's got to go deep in debt and he says I was a sole owner of the company I was also deeply in debt but never except for rare moments have I ever had my head very far above the financial water and never have I let this trouble me and I mean that it's interesting like that he says that
because you know obviously that that kind of thinking is going to lead to bankruptcy eventually I was still dissatisfied I wanted to do more so he's like okay well how am I going to pay back that I want to not only pay off this $5 million but I want to expand so he does this reverse merger with another holding company and that's how he gets web and app to be public he says I now
had a publicly listed company I now had a vehicle for my ambition and started on phase two of my career and when he says phase two he means that I've read a ton of books this is the first time ever so once he's a public company he starts the book again with a prologue so there's three there's three parts to this book every single time there's a prologue where it's like okay this is a line of
demarcation like this is a change in my life I don't think I've ever seen this before and so he starts off telling us what part two is going to be about this is actually a great metaphor what he's about to say here and I think it works with relationships and it works with biographies too so it says just as a man living in a mountain valley sees and is closely aware of only a few of the
nearest Great Peaks above him so it too is it with a man comfortably settled at some modest elevation in our own Society if he begins to climb he is describing himself if if he begins to climb however he will soon notice from his New Perspective that there are actually a great many Peaks on all sides around him this is really really important what is more once he has reached a high enough
altitude he will discover something else he will see that many of the greatest Peaks are interconnected by high ridges or narrow plateaus at this new level they are readily accessible each one to the other right this is about relationships at the top part two of this book is an account of my travels and dealings among some of the Denison inhabiting the elevations and peaks of American society why is that important
because these people have resources and power and they make things go so much faster the importance to me of being on the heights was that in an hour I could achieve what previously would have taken a year or more of effort to perform and so one example of that is when he was trying to to figure out uh to close the deal with the UN like it's it helps if you can call the mayor of New York and
then he gives advice on how to actually attain and to get to scale up to these PS one way to succeed is by aiding and supporting the position of others through new or ingenious ideas or projects this usefulness to others is in large part the reason for my own ex uh my own success to me the best path to wealth is what Henry Ford said money comes naturally as a result of service
the focus should be on making the lives of other people better and then you'll be able to capture some of that value money comes naturally as a result of service and so let's go back to this idea that to read this autobiography is to have this one-sided you know 10 or 15 hour conversation with zindorf and what zindorf does wonderfully is he doesn't hide who he is he knows he's
unapologetically extreme and he just has to follow his natural drift so he's 50 years old and he says something like you know we're about 10 years from him going broke or bankrupt rather and he's like listen I could have settled back as a multi-millionaire and a property holder that's it I'm made in life I'm rich own some properties just chill out but with all with so many useful things waiting
to be done I know more new how to settle down to Mere Money counting than a bee and a clover knows how to doze in the sun I lived and loved a hyperactive 16-hour day and it is this point when he is 50 that he comes up with his greatest idea this is known as the Hawaiian technique there is a ton of dail because this is going to go over if you buy the book in the index just go to Hawaiian
technique and you can actually um you can actually like go right to the I mean i' read the whole book but I think buying the book and just reading the the like six or seven pages whatever this is on the Hawaiian technique or so um important I actually found great um summaries of it so first I want to go to why I'm reading this book and to begin with this is where before I met Sam zel in person and at lunch I had read the
his autobiography obviously and I had bought the book um and so obviously I mentioned I had bought the book and he's like did you read it he's like I was like no he's like read it so that's how we arrived at where we are right now right and so I want to read to you from Sam zel's wonderful autobiography which if you're listening to this I assume you already read or at least listened to the
podcast I did on it it's episode 269 if you haven't but I'd buy the book too because it's absolutely excellent and so this is what he's saying he's going to describe he doesn't call it the Hawaiian technique but this is what he's talking about and so this is what Sam zel says remember this is around 1971 so Sam would have been around 30 years old around the same time I had read the book
zindorf The Autobiography of the man who played a real life game monopol and won the largest real estate Empire in history it reinforced the approach of viewing the whole through its individual pieces but at but for a different purpose zondor was perhaps one of the greatest real estate developers of the modern era zor's autobiography was packed with colorful stories but what fascinated me most was his strategy
zindorf viewed assets as a sum of parts so he could increase the value of the whole various parts were more valuable to different buyers so zindorf could maximize the value of his holding overall in effect making 1 + 1 equal 3 for example One Park Avenue in Manhattan which the marketplace had valued at $10 million was ultimately worth 15 million in zond dorf's hands he calculated
everything separately the building's title the land the leases the individual mortgages I thought this was brilliant I adopted the approach both inside and later outside of the real estate industry and so at the time I was rereading my highlights from Sam zel's autobiography I had somebody by the name of Daniel K Ludwig on Twitter send me a message now this is hilarious because if
you ask like the random entrepreneur on the street that doesn't listen to a Founders podcast they're not going to know who the hell Daniel K Ludwig is even though he was at one time the richest man in the world you and I know him by the term the invisible billionaire it was episode 292 and episode 68 and so this Anonymous account on Twitter named Daniel K Ludwig sent me this message it was interesting he says
zondor both zindorf and lwig are my heroes but zindorf went bankrupt in the end being overleveraged whereas Ludwig's foundation and operations are still running and so he had sent me a summary of the Hawaiian technique and so there's three paragraphs on this to add to what Sam jel just told us in fact some of zor's financial Maneuvers anticipate some of the highly aggressive financing
in the recent real estate market for example for example there was his Hawaiian technique which he claimed in his autobiography to have discovered while fishing on a Hawaiian beach the theory had to do with breaking up a property into various components which is what Sam jel just told us right its ground lease hold its fee position its operating lease hold and a residual position and seeking out
various investors for each zindorf thought about the idea of diversifying investors finding investors who are not just Bankers or insurance companies but actually going out to the public to find local investment and this is how zorf wraps up the section on Hawaiian technique the Hawaiian technique was so flexible that it became a very powerful tool the Hawaiian technique became the
principal tool of the web and nap expansion and so then I have to tell you about this absolutely bizarre encounter with Howard Hughes there's a bunch of people in the book that I've done podcasts on that are these eventual historical figures that are still alive Howard Hugh is the first one and this is the longest section because he's just such a bizarre person and I thought the
story was hilarious uh Howard Hughes was an IND is an industrial genius in paradoxical man and has been phenomenally successful he has produced some disastrously costly movies he's also known as a famous Hollywood Don Juan who collected and discarded beautiful women the ways Bo the way boys collect and discard model airplanes for the past 20 years he has also managed to live as a traveling recluse he deals
with his various company managers only intermittently through obscure intermediaries midnight phone calls or summonses to secret out of the way meeting places he zindorf is going to be summoned by Howard Hughes just this is the most bizarre the most bizarre story in the entire book and so through one of hughes's friend and you can use that word Loosely this this guy named speos
speos is like as much of a friend to Howard Hughes as Howard Hughes could have right Howard's like thinking of okay I'm gonna what if like what's the price like can I sell out everything I have and zachor is really interested in that he teams up with uh some of the Rockefeller families and so they're like okay there's like this super secret way you have to meet Hughes so we're going
to pick that story up here Rockefeller and I flew out to Los Angeles and we met speos we lunched at the Beverly Hills Hotel uh we found ourselves programmed into a script that only members of various underground organizations like the CIA could take seriously at precisely 1:30 speos was to get up and take a taxi cab to a predetermined place where he would be met and then taken to the rendevu at 150 Rockefeller and I
were to go to a certain intersection where a man wearing a red shirt would contact us and drive us to the rendevu the meeting was then to be attended by speos Rockefeller and me so they get in the car after a time we found ourselves in a seedy section of town we soon stopped in front of a flop house the building was now being patrolled by four or five young neatly dressed men with
crew cuts these were Howard hughes's Mormon Entourage they escort everybody into the building they go to the top floor our escort wrapped on the door with a distinct pattern of knocks the door opened and there stood Howard Hughes he had a three-day growth of a beard wor a v-neck shirt soiled trousers and dirty tennis shoes it only gets weirder in conversation they start talking he says in the most casual way
he asked so what do you fellows want since it was Hughes who had approached us through speos and since polite indirection had done nothing for me in previous meetings I decided to be blunt Howard you know damn well what we want we didn't come 3,000 M miles to admire your old trousers or because we like this part of town we came here to buy I was told that you were ready to sell and
so this goes on for a while zondor tries to close him he's like listen I have in my hand a cashier's check then this is the the interesting part he tries to hand him the the letter the guarant letter of guarantee and a cashier check and then he freaks out he's like don't ask me to touch it and so he's like afraid of bacteria and then they go back and forth for a while and then then Hugh
says I will not take this why not it's not enough what is enough I won't tell you do you want to sell under certain circumstances what circumstances if the price is right what is the price the price that you might offer me if it is enough I will sell then second D asked are we $50 million apart Hugh said no do you mean it's less he said no I mean more for a man who supposedly wanted to get down a serious
business Hugh was acting like an original koi mistress but I kept trying are we $100 million off are you offering it no I'm asking you he said I told you I won't tell you all right I'll find out I'm offering you $450 million will you take it no Howard what do you want I won't tell you Howard take it or leave it 500 million he said I'll leave it and then it gets even even weirder Hugh says
I'll tell you what we'll do I don't want to talk anymore today we'll all go down to Las Vegas and we'll talk down there and so this is the plan Hughes comes up with and then as if we were 10-year-old members of some secret membership club four grown men who among them commanded or could influence a significant share of American Wealth sat there as Hughes programmed a properly secret rendevu and
this is what he wanted them to do we were to meet Hughes at midnight at a semi-abandoned airport on the outskirts of Los Angeles he would fly us to Las Vegas but what would arrange that we would be driven to town in separate cars once in Las Vegas we must go directly to our rooms under no circumstances where we to leave them during daylight when we might be seen and start rumors and
what's even weirder is they all flew on the same plane as if they couldn't talk on the flight instead had to do this like weird rendevu so as you could imagine this deal never wind up working out and this went on for page after page after page of just bizarre interactions with Howard Hughes so then there's this interaction with a New York family called the Reeds they own at the time a New York
competitor to the New York Times it's called the New York Herold Tribune and what what Z andorf realizes here is this play that Joseph P Kennedy is trying to do against the Reeds so JFK's dad the one that made the Kennedy family rich I read a biography of Joseph B Kennedy years ago I think it's episode four Founders and it's like 700 or 600 page book called The patriarch it's Absolut it's the book is abely incredible but
this section made me think of one of my favorite scenes from Game of Thrones I just rewatched over the last few months the entire series of Game of Thrones and would take notes on lines or or insights to human nature that appeared and so there's something in this in the last season of Game of Thrones I've mentioned it before in the podcast I just want to bring bring it to your attention again
because it's something I also see in the history of Entrepreneurship and it's this Cutthroat which is this guy that came from the outside the outskirts and through his name is Braun in the series and through the series we see him come constantly like climb his way up and so at the very last season he was hired by Cersei Lannister to kill her brothers Jamie and Tyrion lanister he goes the
Cutthroat Braun goes and says hey my your sister wants you dead you told me a long time ago if anybody ever hired me to kill you that you'd always pay me more I want you to give me if you guys win this War I want you to give me this Castle in this land called high garden and so there's a discussion where jimie says back to him high Garden will never belong to a Cutthroat so that starts
what I one of the most important you know sayings or paragraphs in the entire series and Braun is really talking about like how wealth is built and he says no he says High Garden will never belong to Auto no who were your ancestors the ones who made your family Rich fancy Lads and silk they were Cutthroats that's how all the great houses started and so we know about JFK RFK the Kennedy family Dynasty
and everything that turned that that happened after it but Joseph P Kennedy was a cutthroat as we'll see here the Reeds were then the owners of the New York Herald Tribune early in the fall of 1956 I received a call from Mrs Helen Reed bill I need your advice would you recommend that I sell my plant where her her newspaper is for $11.75 million and then lease it back I said that depends
on the terms of the lease and how badly you need the money so the reads are in a they were one point fluent they're in a bad financial spot the interest would be 8% she said since at that time money was averaging between 4 and 5 % I told her it was a low price for the property and a very high rate of interest so he sees okay that's a weird deal why would somebody be offering this you know she
built a newspaper she's probably not like some kind of financial genius and so zond dorf's gift is being able to read between the lines he like okay well that's a very low price for your property and a very high rate of interest so then I asked her who are you selling to I don't know who I'm selling to and then he says who's the real estate broker it's John J Reynolds he knows knows that John J Reynolds is the
real estate broker that Joseph P Kennedy uses he also knows because he's he knows everybody in the like the the important figures in American Business uh at this time in history right in that case Helen uh I'm going to ask you a very simple question would you sell your newspaper to Joseph P Ken Kennedy for $1.75 million what do you mean she said I said he's your customer and this is the the
Cutthroat part of it right he is giving you just a little less money than you need to force you to go broke he has set the interest rate just a little too high to make sure that you do not only will he have your plant but he will also have your paper all through a very lowcost real estate purchase she says do you really think that he says I don't think it I know it how do you know that she
asks because that's the way Kennedy does business and so that Insight by this fictional character Brawn in Game of Thrones is something I see over and over again again who were your ancestors the one that made your family Rich fancy Lads in silk no they were Cutthroats that's how all the great hous has started what's so fascinating to me is this book is almost 300 pages and yet
the entire downfall because I think it is so painful and I think that's exactly what he says he says that the downfall could be an entire another book it's only like the last like 10 pages and so this is where it's like these are all notes to myself it's like David do this that's a good idea or David avoid this and you just see the same thing happen over and over again I'm going to go
through a couple of the reasons and it just starts to unravel like his business got too much way too complex but a couple weeks ago I read the the autobiography of David Packard and you know back in the 1950s he said something like more businesses die from indigestion than starvation and it's amazing how many times that is proven to be true Zach andor's business went bankrupt not from starvation it went
bankrupt by indigestion by now it was 1960 and webon naap had spread thin over a variety of projects all of which were crying out for cash part of the problem may have been that we were already doing so much in so many other places that is another sentence on another page he just said listen we're by 1960 we're super spread thin we got a ton of projects most of them are draining our bank
account they all need cash so he then he says well part of the problem is that I'm doing too much in too many other place places the distracted do not beat the focused right what is Steve Jobs tell us focus is saying no unfortunately Zack andorf saw every deal and he just took it and when I'm thinking about this I'm also thinking about the difference between like avoiding like who are the people
that successfully avoided second orf's fate obviously have been eyeballed deep and monger and Buffett lately and I just remember what they say is like you always have a fortress of cash so then we go back into this idea of like more business businesses die from indigestion and starvation like buds on or prize rose bush all these and dozens of other projects had not fully profitably
blossomed as of yet so what does he mean I got dozens dozens of projects with money tied up debt on those things and they're losing money every month every year and it's just draining draining draining so then what I have to do I go out and borrow more money then can't pay some of the creditors and this all this house of cards unfortunately is going to fall and he says we borrowed more and
more and more we took first second and third mortgages and any other kind of in of debt possible that is a crazy sentence then he gets into bad deals he winds up backing this thing called freedomland and part of the problem with freedomland is one this guy's know Walt Disney as we're about to see but you're also jumping on a trend so what do I mean there the idea of freedomland was a
as a Fallout from the explosive success of Walt Disney's fabulous Disneyland so it says CV wood had worked with Disney on Disneyland but he had convinced himself and a number of other people including zorf that Disneyland's success was really a matter of woods rather than Disney's idea and management and the difference between Disneyland which is fabulously successful and a product of Walt Disney right and freedom
land the product of CV wood is as follows year after year till it closed it siphoned away web and naps funds and credit for a total drain of $20 million and this is a series of events that lead to the beginning of the book where he actually goes bankrupt I have not the space in this book nor the heart at this time to go into a detailed description of the last days and final foundering of web and naap I was and
still am too close too intensely and emotionally involved in those events it is a tale of minor Ventures devised to Stave off disaster while we prayed to put together one or more major projects that could finally begin to pull the company back together exactly when we moved from a hopeful position into a desperate one I cannot say if any alarm Bells rang I did not hear them when I
got to that section in the back of my mind there's two quotes that we've learned on the podcast recently wisdom is prevention Charlie Munger the wise people don't solve problems they avoid them wisdom is prevention and then on episode 275 Paul Graham be hard to kill unfortunately zorf was not able to prevent this and he was easy to kill as we're about to see here an unexpected
combination of Trends and events coupled with our own actions caused us to founder we had losses rather than income on our books during these stretched out periods instead of producing income we were burning away our financial resources instead our hotels drained away cash we didn't actually have freedomland was running in losses Roosevelt Field was not making any money we held numerous other properties these
later were sold off as best as we could but now was running into an ironic this is is what I mentioned earlier an ironic reverse of what went on during the first years of my career in the 1940s when we were handling this store estate the very fact that we owned a property that we own that property gave it a certain name and glamour which appreciated its market value but in the 1960 so this is a good
the difference between a great brand name and what's happening is his brand name is soiled it means it's singling to the market something else right the uh the very fact that we owned a property gave it a certain name and glamor which appreciated its market value but in the 1960s that a leaguered web and nap owned a property was a signal to some potential buyers to hold back our bid
low in the expectation that in our eagerness for cash the opposite of having a fortress of cash which Munger and Buffett and zel have right in our eagerness for cash we would hold a fire sale the Sharks sensing the distress of our situation kept circling the fall of web and nap when it came was an upsetting ego devastating event but in a way it was also a relief I was like a
man LED out of jail the Ord deal was over the increasing pressure of the 3 years was finally off I had no intention of B bemoaning the past my son Ronnie and I and a handful of old employees set up a new company at called general property Corporation and went into business within a year we were making money the zond dorfs were alive and well and very much in the real estate we were
severely limited in capital but we had brains experience and contacts in good time I have come to realize that since the fall of web and nap I have been privileged to live and to savor a second life and a second career how many other men get such an opportunity I do not know but I'm am grateful for mine the job now is to select among the possible choices and get to work I really like
his perspective at the end of the book it reminded me of Mozart's personal motto which was never despair that is where I leave it for the full story I highly recommend and Sam's recommends as well reading the book if you buy the book using the link that's in the show notes in your podcast player you'll be supporting the podcast at the same time that is 298 books down 1,000 too and I'll talk to you again soon