The Education of Millionaires - Michael Ellsberg [92]
During his first year at Washburn University in Topeka, Kansas, a few years earlier, Ruffin had started a hamburger stand, to help pay his tuition. Pretty soon the stand was making solid money. “So I put the second hamburger stand in,” Ruffin told me, “and I kind of forgot about college for a little bit.” He soon dropped out of Washburn to focus on growing the hamburger chain. (This was in the mid-fifties, right around the time Ray Kroc, a high school dropout, started building a hamburger franchise called McDonald’s.)
Ruffin continued to build the chain up, and soon sold his interest for $29,000, which in 1955 was around $230,000 in today’s dollars. “I immediately lost all the money in an oil deal,” he told me. So he took the job as the assistant manager—a career he didn’t stay in much longer after the monkey bite.
“I started back in college at Wichita State University. I studied business and didn’t like it. It was not interesting to me. I couldn’t concentrate. The professor kept telling me all this abstract stuff about economics, but it was clear he’d never built a business up from the ground as I already had. I kept thinking about business. I went two years there and quit.
“I found a little convenience store. It was called 11-to-11 Market. I had managed to scrape up fifteen hundred dollars. I borrowed the balance from the bank. I worked from nine in the morning to midnight every day, seven days a week myself. I started expanding in the convenience store business—this was when people didn’t even know what convenience stores were. I put one in and another and another.
“In 1968, we put our first self-service gasoline station in Blackwell, Oklahoma. We were pioneers in self-service gasoline. It was a very good business for a long time. We were making a lot of money. In the meantime, I bought a bank, some shopping centers, strip mall centers. We were financing mostly through profit, plus bank loans. I purchased a lot of real estate. I purchased a dairy, which supplied milk to my stores. In 1987, I built a Wichita Marriott, my first entry into the hotel business. We started picking up a few hotels here and there.”
At this point in Ruffin’s story, I had to ask him: “It seems like everything you touch turns to profit. You just buy a business, profit from it, buy some more, and they do well. What’s your secret?”
He replied, in classic bootstrapper form: “We watched our pennies and didn’t do anything extravagant. These were real businesses, earning real dollars, not a bunch of risky hype. It was a lot of work. We were working twelve, fourteen, fifteen hours a day.
“We reinvested profits, plus borrowed money from the banks, and paid them back and then expanded to more hotels and stores. That’s just the way we operated. We never had a lot of debt.”
After many more hotel deals, and a deal to lease out his convenience stores, which netted him $2.2 million in cash each year, Ruffin heard that the Frontier hotel on the Vegas Strip—the second hotel ever on the Strip, built in 1942—was for sale. But no one was buying. “The reason no one would buy it was the longest union strike in history—six and a half years. Nobody in Vegas wanted to buy it because they had union problems of their own. But I wasn’t in Vegas. All I did was meet with the president of the union, and we cut a deal. Of course, the deal cost money. We had to bring back those employees that had been laid off for six and a half years. Everybody tried to solve the problem, even Congress