Arkansas native Jerry Jones, owner of the Dallas Cowboys, tells Forbes magazine in his own words two valuable business lessons he learned the hard way growing up.
First, at age 25, he let his dad talk him out of a deal to buy the San Diego Chargers — a move that would have more than doubled his money and elevated Jones to multi-millionaire status in his twenties.
Jones then confesses that he entered into one of the most dangerous business deals of his life:
Then, a few months later, my world turned upside down. I got into a land deal with a man from Springfield. He had 51 pieces of property worth $3 million, but he was losing money. I did a “work out” deal with him. I took over the properties and aimed to sell them and split the proceeds.
I went to 40 individuals and banks to get loans. Like I said, I could talk my way into a loan. But I made the mistake of personally guaranteeing these loans. And it ended up that I couldn’t sell the properties in a timely manner. I got into real trouble.
I earned about $35,000 a year from my job at my dad’s insurance company. But suddenly, from the interest payments alone on the properties, I was down $120,000 a year. That was serious money back then. I had negative cash flow. The bankers would call, and I couldn’t pay them.
I flew to Dallas one day and tried to rent a car, but the man cut up my credit card right in front of me and told me, “Young man, you need to learn how to pay your bills.”
I got so depressed. It was a real effort to leave home for work. My wife was very concerned about my mental state. My hands would start shaking so much that I had to use both of them to hold a glass of beer. And it would still spill.
I had gone, in one year, from the can-do high of nearly buying a football team to being shaken to the core by the cold reality of what happens when you get upside down relative to cash flow.
I would eventually work it out and get through that. But it was my greatest education, and such a blessing to learn it so early in life. I’ve taken those lessons and applied them to everything I’ve done since then.
You can read the full article written by Jones at this link.