Making Money with Toilets and Beer

Tell us a little bit about your early life.

I was born in 1960 in the Bay Area, where I've lived ever since.  My father was a plumber, and I decided to follow him into the trade.  I've always been good with my hands, and not afraid of a little dirt.  It's not glamorous work, but I enjoy the freedom of being my own boss. 

Did you go to college?

I did not.  I went straight into plumbing after high school.

Do you focus on residential or commercial plumbing?

I only do residential plumbing.  I'm a one-man shop.  No employees, no business location.  Besides my plumbing tools, all I need is a cell phone, an old van, and a good Yelp listing.  I don't even really need Yelp, since most of my business is word of mouth at this point.  Being a plumber is a great business, because you don't need a lot of assets (or business loans) to start your business.

Some of my readers might be surprised to learn that you are a millionaire.  There are lots of people with MBA's and law degrees that are not millionaires.

Like I said, there's nothing glamorous about what I do.  You don't need a 120 IQ to install a toilet or unplug a sink.  The good news is that robots haven't put me out of a job yet.  When someone calls me on a Sunday night with a flooded toilet, I'm as important to them as a trusted attorney or tax adviser.

What do you charge?

$150/hour plus materials.  I could probably charge more, since folks are usually desperate when they call me.  But that's about the going rate.

How many hours do you work per week?

I work about 30 hours per week on average, not counting time spent in traffic.

So that's about $18,000/month before taxes?

Yes.

That's incredible.  You're basically making the same amount of money as a Google engineer.

Yes, but without the stock options, of course.  Your readers need to realize that the Bay Area is a very expensive place to live these days.  The median price of a home in my area is over $1.5 million, and that's for a pretty crappy house.  I'm lucky to have bought my house in the 1980's before tech took off.

So I imagine that your house has helped to make you a millionaire.

Yes, I have more than a millionaire dollars in equity in my house.  But that's only a part of the story.

Really?

I've been a beer drinker all of my life.  It's my only vice, though I wish I exercised more.  Ironically, it's my beer habit that has made me more money than anything else.  I've been drinking Sam Adams beer for as long as I can remember.  It's still my favorite beer.  

Well, in 1995, I began to see announcements on Sam Adams six-packs that the company was going to sell shares to the public.  There was a toll-free number that you could call to get 33 shares of stock at $15 each.  So I immediately called the number and purchased my $495 worth of the stock.  A few months later when the official IPO happened, those shares that I had bought at 15 were trading in the high 20's.  The stock got as high as 33 before crashing all the way down to 6.50 by the late 1990's.  The internet boom was in full swing, and nobody wanted shares of old economy companies like brewers.

I had a different opinion.  I knew that the Boston Beer Company (SAM) made the best microbrew beer in the world.  I drank a few bottles of Sam Adams every night, and so was constantly reminded of this.  And so I decided to start adding to my position in SAM by using all of my available cash to buy more shares.  I used all of the available profits from my plumbing business, after paying our household expenses, to buy more shares of SAM.  On the 15th of every month since 1998, I've been buying shares of SAM.  Those same shares that I paid between 6.50 and 10 for in 1998 are now worth over 300 per share.  I'm a multi-millionaire today because of SAM.

Have you ever sold any of your shares?

I sold some to pay for my children's college education, but I still own most of my shares.  Literally millions of dollars worth.  My wife keeps telling me that I should sell the whole thing and put the cash into a safe CD.  I might do that one of these days, but at this point I'm emotionally attached to them.  I love the beer, and I love the company that makes it.

We often hear that when investing you should not put all of your eggs in one basket.  Are you guilty of this?

I think that the second half of that proverb is that if you do put all of your eggs in one basket, make sure you watch that basket closely, or something to that effect.  I'm definitely guilty of not diversifying.  But I've also heard from folks like Warren Buffett that you can only get huge returns by owning just a few stocks.  If you own the 500 stocks in the S&P 500, your results will just be average.

I think that everyone has to decide for themselves what they are comfortable with.  I have read every annual report that SAM ever put out, so I am definitely watching my basket very closely.

Are you married?

Yes, I am married with 2 grown children.  One works for Google, and the other works for Facebook.  I'm not a bit sorry that they haven't followed me into my profession.

Is there anything about your morning routine that you would like to share?

Now that my children are all grown up, I like to wake up slowly in the morning.  The Bay Area is expensive, but the weather is just perfect here.  I usually have a leisurely breakfast sitting at an outside table in the sun.  I find that 20 minutes of early morning sunlight and fresh air really helps me to wake up and feel good about starting the day.

Any advice for high school or college students?

Don't be afraid to go into the trades.  Our country has a shortage of craftsmen, plumbers, electricians, repair men, etc.  College isn't for everyone.  Be realistic about student loans and what you are going to study in college.  Will you really be able to pay off those loans, which will otherwise stick with you for life?

Any other advice?

Invest in what you know.  If you are regularly spending money on something, why not get some of that money back from the company in the form of dividends and capital gains?  My life would be very different today if I had never invested in the Boston Beer Company.  Also make sure that you find a good spouse who shares your financial and personal values.  Take each day as it comes, and appreciate the small things.  Life just flies by, so take the time to appreciate the little moments.

Thanks for taking the time to talk with me today.

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