2. First Buys

My first job was in a grocery store. My boss put me to work filling little cartons, each with a dozen of eggs from a crate. There were red cartons and blue ones. Both were packed from the same crate. The red were then marked 39^ and the blue ones 59ff. That was enough for me. I left the grocery busi­ness forever.

In the next eight years I did everything from shovel snow to selling cars. September 1929 found me owning a little lock and bike shop in Brookline, Massachusetts and commuting from my home some 20 miles away. A month later the depres­sion struck and it was a struggle to keep head above water. Casting about for ways to keep the business going I started a 24-hour service in keys and locks, and advertised it extensively. This necessitated living nearer the shop and I bought my first piece of real estate—with $200 down, a first mortgage to the Brookline Cooperative bank for $2,000, and a second mortgage for $400 to the seller.

Of course, it was mostly on freezing, sleety nights that people lost their car keys in the snow or broke them off in a frozen lock. They would phone me at 3 a.m. and I would stumble out of bed, gather my tools and go out and earn the precious $3. Nevertheless I persisted in my determination to develop the business and opened several branches in supermarkets, in Bos­ton's North Station Terminal, and even had one "branch" manager operate on the fender of his car. We rigged a key machine to his fan belt and he hawked the keys quite successfully.

Meanwhile I kept an eye open for more real estate. The house at 171 High Street, next door to my home, became avail­able and I bought that one. Then I heard that the 3-family Aunt Toby around the corner at 7 High Street Place was aban­doned, and I sought out its owner, Mr. W. We settled on $3,000 as a price, with $250 down and Mr. W. held the mortgage.

In a few months I had put the building into liveable condi­tion, and rented the flats at $22 per month. That was money in those days. The building next door, at 9 High Street Place, was owned by a Mr. F. He approached me about it and I bought that one for $3,400. The down payment was $300, the first mortgage $2,500, and Mr. F. took the second mortgage for the remaining $600.

Of course I was extremely busy between the properties, the shop, and the branches. Yet I found time to start a small factory where we manufactured 3-wheel bikes for peddling and de­livery. Then the roof fell in. Three significant things happened within a short space of time.

At one of my branches, in a supermarket, the owner had a long talk with my employee. I do not know whose original idea it was, the employee's or the owner's, but they threw out my concession and put in their own. Soon after, the owner in­structed the employee to teach another employee how to make keys so that the stand could be covered at lunch hour. Of course, the employee soon found himself out on the street. And I did some deep thinking.

The second incident occurred when I got a call from a man who had a brown Pontiac on Route 3. He had locked his keys in his car. Yes, he would pay the $5. I sent out my locksmith to do the job. He returned some 45 minutes later with the report that the man had apparently found his keys and had left before the locksmith got there. This was an occupational risk, and I shrugged and sent the man out on another call. A few minutes later a brown Pontiac pulled up at the door and the owner came in to the shop. "Your man just charged me $5 for opening my car, and I don't want it to happen again. Please make me three extra keys."

The third incident involved the delivery bike that my little factory was producing. I had a patent, of course. However, a welder came to the plant, bought a bike, and then told me he was going to manufacture them in his shop. I hurried to my patent lawyer, fire in my eye. Shock number three came when the lawyer told me that the patent was little protection. Yes, I could sue, but it would be years before we got a decision, and it was dangerous to restrain the welder because we might lose the suit and then be liable for heavy damages. I closed the bike factory.

In recent years when business men have come to me to learn a better way to make their fortunes, they have put my experi­ence into words. Some have said they are fed up with the two big L's, Larceny and Labor. Others say, "When another must handle your money, it's no good." And, "When I am forced to sit down with a representative who will dictate how I am to run my company—or else—it makes the whole business revolting to me." That is why they swing over to real estate, where labor and leakage headaches are at an inconsequential minimum.

In the light of the incidents above, I did some sober thinking and evaluating. The amount of attention that the Aunt Tobys required was so small that I would often have forgotten they existed except that the rents coming in on the first of the month were sorely needed. Again and again these rents saved the day for me. Many a payroll that I had to pay could not have been met but for the rents. The pressing bills that the shop just didn't seem to produce enough for, were often paid by the rents.

Even more startling was the realization of where the down payments for most of the properties had come from. It was obvious that the monthly mortgage payments on the buildings came from the buildings themselves. But the pyramiding had been financed by the same source! When I had evaluated these facts, I made up my mind. I closed all the remaining branch shops.

My course was now clear.

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