Known as the “richest man in the history of the world” and the “man with all the money in the world” the legend of J. Paul Getty’s wealth is so much that his name is still synonymous with wealth, even today.
Most famous for the oil empire he founded and expanded and the family that bears his name, J. Paul Getty’s business empire went far beyond just oil, to include hotels, aircraft manufacturers and financial services companies among others.
So how exactly did he make his money? And what made him so much richer than everyone else?
Early Life
Jean Paul Getty, better known to history as J. Paul Getty was born on December 15 1892 in Minneapolis, Minnesota, as the only son born to corporate lawyer George F. Getty and his wife, Sarah Risher, both devout Methodists.
The Getty family were of Ulster-Scots ancestry, with the family having originated in Scotland before moving to Ireland during the Protestant Ascendency and then to the US after the American Revolution, where they eventually settled in Pennsylvania, and later Maryland.
George F. Getty was born there in October 1855, before the family moved to Ohio, with George later leaving for Minneapolis for better employment prospects.
Growing up as an only child, Getty would’ve had an older sister, Gertrude (born 1880), however, she died two years before Jean was born, in 1890, due to a typhoid epidemic that hit the city that year.
In 1904, when Jean was only 11 years old, his father purchased the mineral rights for 1,100 acres in Bartlesville, then in the Oklahoma Territory (now the state of Oklahoma), and the family moved there for his father to pursue a career as an oilman.
Over the next few years, Getty Sr. established several oil wells on the land he owned as was soon producing 100,000 barrels of oil a month, making the family extremely wealthy.
This allowed the family to move to Los Angeles, California, although a young Jean would later move back to Oklahoma.
Unlike many children of the era, Jean Paul Getty was fortunate enough to receive full-time education at some of the best institutions in the country, such as Harvard Military School, Polytechnic High School and Oxford.
Studying there, Getty was able to learn languages like Arabic, German and French, that would all help him immensely in his future business career.
As a kid, Getty was also one of the rare children who were able to travel abroad, spending several months travelling through Europe and Egypt in 1914, arriving back in Europe a mere month before WWI started.
A Start in The Oil Business
Returning to the US with his parents in June 1914, a then-21-year-old J. Paul Getty decided to get into the oil business that had so defined his childhood. To that end, he joined his father’s business buying and selling oil leases out of the company’s Tulsa, Oklahoma offices.
Yet, the younger Getty yearned to go out on his own.
Noticing this, the elder Getty soon realized that having his son buying oil fields in Oklahoma would actually be advantageous. To that end, George Getty lent his son $10,000 ($272,000 in today’s money) to acquire oil holdings separate from his own.
George Getty hoped that this would allow the Getty family as a whole to become the Rockefellers of the Oklahoma oil industry – a multi-generational dynasty that controlled the state’s oil production.
Making his first acquisition in the fall of 1914, Jean Paul Getty (through his Minnehoma Oil Company) acquired the Nancy Taylor No. 1 oil well site, located four miles northwest of the town of Haskell, Oklahoma.
Purchasing the site for only $500 ($13,500 adjusted for inflation), it took Getty almost a year to find oil, striking it in August 1915. Striking oil, Getty soon began extracting as much oil as possible, selling so many barrels of oil that he was a millionaire by September 1916.
With this business success under his belt, Getty soon found a buyer for the well and sold it for a considerably profit.
Now a millionaire, Jean Paul Getty retired to life as a wealthy bachelor in Los Angeles, where he frequented attended parties and gained a reputation for having an insatiable appetite for sex and being a womanizer – things that stayed with him for the rest of his life!
Great Depression
Indeed, Getty was so well known that his devout Methodist parents heard about his womanizing – a fact that deeply distressed them.
However, his retirement was not to last. Jean Paul Getty, now going by the name J. Paul Getty for business and the press, returned to Oklahoma in 1919 and set about expanding his already immense fortune.
Acquiring and drilling several new wells over the course of the Roaring Twenties, Getty added $3 million to his fortune.
When George Getty passed in 1930, J. Paul Getty expected to inherit the lion’s share of his father’s $10 million estate. Instead, he only inherited 5% of it ($500,000) which, whilst a lot in the 1930’s, was a lot less than he thought he was going to get.
Aside from only getting 5% of his father’s fortune, J. Paul expected to get two-thirds of the stock in George Getty Oil Company, whilst his mother got the remaining one-third.
Once again, J. Paul was dead wrong, getting only one-third control, whilst his mother got the controlling two-thirds share. His only consolation prize was that he was named president of the company.
To sweeten the pot, George Getty also left the projection that his son, J. Paul Getty, would destroy the family fortune he’d worked so hard to build because of his womanizing.
When the Great Depression hit, demand for oil fell to an all time low, hurting oil companies like the ones Getty owned. Whilst his business remained profitable, many didn’t, which allowed Getty to acquire them at a tiny fraction of their true value.
In 1930, the same year his father died, J. Paul Getty began buying shares in Pacific Western Oil Corporation, then one of California’s ten largest oil companies, having its headquarters in Los Angeles. By 1931, Getty owned the entire company.
Business Boom
Continuing to expand his business over the 1930’s, J. Paul Getty struck a deal with his mother in 1936 to acquire full control of the George Getty Oil Company.
In exchange for helping to fund a $3.3 million investment fund called the Sarah C. Getty Trust (a tax-free trust fund for future generations of the Getty family), Sarah C. Getty signed over her shares in the company.
Now controlling his own Minnehoma Oil Company, his father’s George Getty Oil Company and Pacific Western Oil Corporation, as well as a stake in the Mission Corporation oil holding company, J. Paul Getty chose to incorporate Getty Oil in 1942.
During WWII, Getty continued to produce oil, with his largest customer being the federal government who used his oil for the war effort. Whilst not as rich as he’d eventually be, Getty’s wealth had begun to be noticed.
After the war, Getty was introduced to Ibn Saud, the King of Saudi Arabia, and the pair soon struck several lucrative deals in 1948 and 1949.
In exchange for a $9.5 million upfront payment, as well as a promise to pay the king $1 million every year they were in Saudi Arabia and a 55 cents per barrel royalty, Getty Oil was given royal approval to establish oil wells in the country.
Unlike other foreigners who had to deal with a government intermediary, the legend of J. Paul Getty’s wealth (and more importantly, his ability to speak Arabic fluently) allowed him to deal with the king directly, often face-to-face.
Initially, his engineers and geologists struggled to find oil, but after three years and a $30 million investment on Getty’s part, they finally found oil in March 1953 and began extracting it on a huge scale.
Just from his Saudi Arabian oil wells alone, Getty was producing a monumental 16 million barrels of oil a year, or a little less than 44,000 barrels per day.
This is what made J. Paul Getty a billionaire.
In 1957, Fortune magazine ran an article calling J. Paul Getty the richest man in the world. Other business-related magazines, such as Forbes, soon followed, with J. Paul Getty being the richest man in the world from then until his death nearly two decades later.
Other Ventures
Whilst Getty is best known for his oil business, which not only made him the bulk of his money but also made him famous, Getty understood the need to diversify his holdings.
Getty’s first foray outside of the oil business was in 1935, when he purchased the Spartan Aircraft Company, the producer of the Spartan Executive – the pre-private jet aircraft used by the likes of Howard Hughes and King Ghazi of Iraq as their corporate/personal aircraft.
Following WWII, the company transitioned from aircraft production to the production of high-end trailers. In 1961, the company ceased all production and became a financial services company, operating under the name Minnehoma Insurance Co.
Interestingly, this marked the first time Getty had revived the “Minnehoma” name since his father died, with Minnehoma Oil being his first oil company.
Even more interestingly, “Minnehoma” is a combination of the names of Getty’s hometown of Minneapolis and the state of Oklahoma, where he first struck oil.
Three years later, in 1938, J. Paul Getty acquired the Pierre, a failing luxury hotel in the heart of New York. Paying only $2.5 million ($48 million adjusted for inflation), it was a bargain even back them.
Over the next 21 years, Getty sold some of the suites off as apartments and later sold the rest of the hotel in 1959 for much more than he’d paid for it.
All this was done so that when and if the oil business had a bad year/quarter, his other businesses should be able to cover the losses and vice-versa. It also provided him with other sources of revenue so he wasn’t completely dependent on oil profits.
Later Life
For most of his adult life, J. Paul Getty had lived in and out of hotels, as he was constantly on the move due to the nature of his business.
Finally deciding to settle down, Getty purchased Sutton Place, a 72-room mansion near the town of Guildford, England, just 30 miles southwest of London, from the 5th Duke of Sutherland for £60,000 ($870,000) where he lived for the rest of his life.
Even in his seventies, Getty continued to work up to 18 hours a day overseeing his business empire from the office in his Sutton Place home.
When Arab-Israeli relations broke down (even more than they already had) and led to the Yom Kippur War in 1973, the world’s supply of oil began to run out, causing the price to skyrocket.
Although it caused a recession in much of the Western World, 1973 proved to be a great year for Getty, as he not only made millions of dollars more than he would’ve otherwise, but the value of Getty Oil shares quadrupled.
In a move that would’ve likely horrified his deeply religious parents, J. Paul Getty continued to womanize well into his seventies and eighties, often relying on the experimental H3 drug to maintain his potency.
Death
Suffering declining health in his old age, J. Paul Getty began to seclude himself at his Sutton Place mansion, mostly staying out of the public eye. On June 6 1976, Jean Paul Getty suffered heart failure and died in his Sutton Place mansion at the age of 83.
His death was announced via obituaries in major British and American newspapers, and his body was flown back to the US for his funeral on June 11. His body was then buried on the grounds of the Getty Villa, in a part not accessible to the public.
At the time of his death, Forbes reported that J. Paul Getty had a net worth of $6 billion, or roughly $28.65 billion adjusted for inflation.
Alternatively, Getty’s net worth can be measured by its percentage of the US GDP at the time. When he died in 1976, Getty’s net worth was the equivalent of 0.3% of the US GDP, if Getty still had this today, it’d be worth $64.29 billion.
Upon his death, most of his Getty Oil shares were put into the J. Paul Getty Trust which his children, primarily his fourth son Gordon, then inherited control of. This gave them access to their father’s immense wealth, whilst reducing their tax burden.
Whilst most of his money went to the charitable trust that bears his name, smaller amounts and monthly stipends went to his various mistresses who he’d been financially supporting whilst they’d been living at his Sutton Place mansion.
They all received differing amounts, with Getty’s favorite mistress – interior designer Penelope Kitson – inheriting 5,000 shares of Getty Oil and a lifetime monthly stipend of $1,167. The value of her Getty Oil shares increased dramatically during the oil boom of the 1980’s.
Legacy
Although they didn’t own it in name, in reality, the Getty family still controlled Getty Oil. This cemented the family as an oil dynasty, with George Getty as the founder, J. Paul Getty as the one who brought it to new heights, and his children as the ones who reaped the benefits.
Even after Gordon Getty sold Getty Oil to Texaco in 1986, the Gettys were still (and are still) known as an oil dynasty!
As the one who brought the family to new heights, several of J. Paul Getty’s descendants have been named in honor of him, such as his son, John Paul Getty II, and his grandson, John Paul Getty III.
Once famous for their oil business, today’s Gettys are remembered for their philanthropy, whilst one member, Balthazar Getty, is an actor – having had roles like Agent Thomas Grace in Alias and Tommy Walker in Brothers & Sisters.
During the 1950’s, 1960’s and 1970’s, J. Paul Getty had an on-again, off-again rivalry with fellow oil mogul Armand Hammer, the head of Occidental Petroleum. Although their rivalry was mostly a business one, it has influenced their businesses.
Even after the deaths of both Getty and Hammer in 1976 and 1990, Occidental Petroleum and Getty Oil maintained a long-standing, but friendly rivalry with one another (well, about as “friendly” as you can be with a business rival).
Owing to the incredible life he lived – and the incredible fortune he earned – J. Paul Getty has been featured in several TV shows and movies, namely in Trust (portrayed by Donald Sutherland) and All the Money in the World (portrayed by Christopher Plummer).
Interestingly, J. Paul Getty was actually a pretty prolific writer, writing a total of nine books between 1941 and 1976, mostly autobiographies of different portions of his business career, which often go into excruciating detail.
How Can I Replicate What J. Paul Getty Did?
Reading about the life of J. Paul Getty, you’re probably wondering to yourself how you can replicate what he did to similarly become one of richest men in the world.
Sadly, the answer is that you can’t. And, why would you want to?
First and foremost, recent years have seen public perception of oil companies and the billionaire oil barons who control them sour immensely, with their reputations being tarnished by repeated negative coverage.
Mostly due to environmental concerns, many people have begun to get rid of their gas guzzling cars in favor of electric ones. At the same time, other oil-based products are being boycotted for more eco-friendly alternatives.
All of this has meant that over the last decade, demand for oil has decreased considerably – as have profits for oil companies. Indeed, in 2012, Getty Oil filed for bankruptcy after 70 years of operations and once being one of the largest companies on earth!
Instead of attempting to replicate what Getty did, after all, entering a dying business to continue doing the same thing is just a bad business move, you could take the story of his life less literally and more of a general guide.
Interested in energy production (as oil is one of the largest sources of energy we currently us)? Why not get involved with solar or wind power?
Interested in getting involved in a “gold mine” industry (after all, oil is known as “liquid gold” for a reason)? Why not get involved in an extremely profitable industry like life insurance, soft drinks or information services?
Perhaps you could be the next J. Paul Getty of that industry, and disrupt it so much that your wealth eclipses that of J. Paul Getty, Jeff Bezos and John D. Rockefeller! You won’t know unless you try it.
What Can we Learn From J. Paul Getty?
Despite having been dead for over 45 years, the life of J. Paul Getty is still as relevant today as it was 45 years ago, with his life being able to teach you a lot, not just about running and starting your own business, but also personal finance and life in general…
Be Frugal
A recurring theme among the wealthiest self-made individuals is that most of them are incredibly frugal, to the point of penny-pinching. And no one better exemplifies this than J. Paul Getty.
Most famously, when Getty’s grandson, J. Paul Getty III, was kidnapped in Italy by the ‘Ndrangheta (Italian Mafia) in 1973 and ransomed for $17 million ($104 million in today’s money), the elder Getty refused to pay.
He only agreed to pay after they cut his grandson’s ear off, but even then, insisted on negotiating it down to $3 million, with him only paying $2.2 million because that was the highest amount that was tax-deductible and his son footing the rest of the bill.
Other acts of frugality include installing a pay phone in his 72-room Sutton Place mansion, doing his own laundry by hand, wearing suits and shirts with frayed cuffs, writing responses to letters in the margin and reusing used manila envelopes.
But Getty didn’t do this just to be needlessly difficult, he did it because he understood the value of money. By being frugal, Getty had more money to invest in his businesses, himself and his family, all of which helped to increase his and his family’s already huge wealth.
In turn, this allowed them to be even more frugal and do it all over again!
Don’t Forget to Enjoy Your Money!
Despite his penny-pinching nature, Getty also knew the importance of enjoying his money.
As the owner of the Spartan Aircraft Company, J. Paul Getty had his own personal aircraft, a Spartan Executive, which he used to make business trips in, whilst he also had a yacht, previously owned by media mogul William Randolph Hearst, for longer trips.
Beyond owning his own personal aircraft and 105 foot long yacht, Getty had a soft spot for high-end real estate too.
During his life, he bought multimillion dollar real estate in both London and California, with the crown jewel of his property empire being his aforementioned 72-room Sutton Place mansion which he bought from the Duke of Sutherland for £60,000 ($870,000) in 1959.
And this is something we as entrepreneurs tend to forget. We spend so much time and effort trying to innovate, trying to build our business up to the point where it’s locally, nationally, or even internationally known.
And we don’t get to enjoy the money we’ve made until it’s too late.
Make Powerful Friends
Though a frugal man in most areas of his life, J. Paul Getty was famous for throwing extravagant parties, that cost hundreds of thousands of pounds in today’s money, with all his friends being invited.
Among those friends who frequently attended his parties were member of the British branch of the Rothschild banking family, Middle Eastern royalty and several members of the British nobility.
Yet Middle Eastern royalty weren’t the only royals who Getty knew. Whilst receiving private tutelage at Magdalen College in 1912 and 1913, Getty befriended the future Edward VIII, with the two remaining friendly for the rest of their lives.
Beyond attracting media attention for Getty when they attended his parties, Getty also used his friends, and the parties he threw for them, as networking events.
You see, it wouldn’t just be the people he invited who’d attend these parties. Close friends and relatives of Getty’s guests would attend these parties, with them often being involved in the oil business and introduced to Getty as such.
Striking a conversation, Getty was able to make several business contacts he wouldn’t have made otherwise without these parties!
Always Take Advantage of Your Surroundings
During the Great Depression, the oil industry nearly collapsed. The Depression meant that people simply didn’t have the money for cars, and in turn, for gas to power them, other oil-based products similarly became luxuries most people couldn’t afford.
Yet, where others saw ruin, Getty saw an opportunity.
Having large amounts of capital at his disposal, Getty used the Great Depression as a way to acquire a larger market share. In 1930, less than a year after the stock market crash, Getty began acquiring shares in the Pacific Western Oil Corporation and was given a seat on the board.
Within a year, he’d acquired a majority share in the company, giving him multiple avenues for his oil business. He also began his two decade-long acquisition of Mission Corporation – a holdings company with large stakes in Skelly Oil and Tidewater Oil.
J. Paul Getty finally acquired control over the company in 1953, and 100% control in 1976.
By taking advantage of depressed stock prices and that the oil industry was on its knees, Getty acquired what should have been a multimillion dollar company for a fraction of its value once the economy and oil industry rebounded.
In laymen’s terms, plan ahead and have money waiting around for that great business opportunity – be it a collapse of a rival, a stock market crash or whatever!
Buy Art
In 1953, J. Paul Getty met and became enamored with Mary Tiessler, a French art expert and interior designer with distant relations to the last Tsar of Russia. Soon, she became one of his mistresses and later, introduced him to the world of art.
Beyond falling in love with its beauty, Getty also realized something most extremely wealthy people do: Art is valuable.
Whilst it was kings and noblemen who had been the patrons of great artists like Rembrandt, da Vinci and Michelangelo and kept their art for centuries, it was businessmen like Getty who were buying it in the 20th century.
And this wasn’t a vanity project for them either. It was an investment.
You see, whilst the value of investments like stocks and real estate increased at between seven and ten percent per year, the value of art increases wildly. One year, it may increase by 15%, the next 7.5%, and the next 25%.
But it almost always increases in value.
And J. Paul Getty understood this. Instead of putting his extra money in real estate or the stock market, Getty decorated his entire house in millions of dollars worth of art. Indeed, when he died in 1976, his art collection was valued at $4 million.
His collection included over 600 works by the likes of Monet, Titian and Degas, and would be worth billions today. Following his death, most of it was shipped to California and put on display at the Getty Villa (as the J. Paul Getty Museum).
Has the story of J. Paul Getty inspired you? Tell me in the comments!
