Any morning during the week, at 5 in the morning, the billionaire housing builder Pat Neal begins to prepare for work while reflecting on the market and bond markets. “It usually begins to think about the shower and finish at 8 in the morning,” he says, and includes asking: “What will the Treasure letter do today to 10 years?”
But Neal does not have Treasury lyrics. In fact, it does not have any bond or any public action. Follow these markets closely to predict how their activities will affect the spending patterns of housing buyers. As for him, almost his fortune of 1.2 billion dollars is invested in his construction company Neal Communities, which has built 25,000 houses, all in Florida.
“I like to control my own future,” explains Neal, 76, who has reinvested in the business since he founded it in 1970. “I do not lead a luxurious life. And my retirement is my business. We do not need (retirement funds) because we are not going to retire.” When Neal, who pays a salary of $ 150,000, needs additional effective, sells without urbanizing. It has about 26,000, some in joint companies or with their children, and estimates that its average value is 50,000 to $ 150,000 each.
Neal’s first incursions into the investment were more diversified. Florida’s former state senator learned innumerable ways to earn money while growing in Des Moines, Iowa, in the 1950s and 1960s: bottled and sold detergent. He cut lawn. Distributed newspapers. He used his truck to take some colleagues and rent their cleaning and transport services. By the time I was in high school, he earned thousands of dollars a year, sometimes more than his mother, teacher.
He made his first investment in the mid -60s, around the age of 16: 100 shares of Iowa Beef Packers, the pioneer company in meat packaging. Remember to have bought them for about $ 1500 (about $ 15,400), or $ 15 each, in the mid -60s, retained the shares until its second year of university, when it estimated that it sold them for about $ 3,000 (about 26,900 current dollars), doubling their investment.
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Why does this billionaire not have a single action or bonus in your fortune?
His luck did not last. Neal’s first Bolsa corridor encouraged him to invest in Delta Corporation of America, a loan company for mobile houses based in Florida, in the early 1970s. He bought 100 shares at $ 28. After briefly reaching 34.50 dollars in October 1971, the shares collapsed after a bad report report and continued down. The corridor encouraged Neal to invest, and he did so, until Delta dissolved in the mid -decade. «He asked me to buy an average action at $ 14. I bought it and kept it afloat until it reached 0 dollars ». (His corridor left the business and became a butcher).
Neal says it was “just as good” with his second corridor, and that is why he stopped investing in the market completely after 1972. The strategy he now prefers is to invest only in the industry that he knows best: the construction of housing.
“My children and I know more than anyone on opportunities for buying land,” he says. “We spend the day touring properties, calling friends, reading obituaries, listening to what is happening, to make sure we do good land purchases. My investment strategy is to buy land before growth.”
That tactic earned him one of his best purchases: 1087 Acres in the Lebamby hunting reserve, in Sarasota County, which he bought at the end of the 80s for about 0.10 dollars the square foot and sold in the 90s and early 2000s. “They did not know that the interstate highway was coming,” he says. “And when the adjoining roads were opened, I could sell part of the property at $ 57 the square foot.” Another particularly important blow occurred when he and his son John paid the City National Bank of Florida $ 6000 per acre for a land that was in mortgage execution in 2014. He urbanized him and sold parties for $ 250,000 the ACRE last year: “They did not know the value of their property”.
“Investing is a knowledge business,” says Neal, who recommends the books of investors Seth Klarman and Peter Lynch as treaties that support this motto. “A unique knowledge should allow you to obtain profitability superior to the average.”
This article was originally published by Forbes Us.
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