My advice is - don't buy an icebreaker: Dick Smith
Entrepreneur, adventurer, philanthropist and patriot Dick Smith spent the first lockdown writing his autobiography My Adventurous Life.
He says he was hopeless academically, but he became a hugely successful businessman and adventurer. He is particularly proud of Australian Geographic, because it is a positive magazine full of good news stories.
He is also stopped in the street by people who worked in his Dick Smith electronics stores, which operated for 47 years. He is married with two children and five grandchildren.
What was your first job?
When I left school at 15 I was an apprentice electrical fitter. I had quite a bit of knowledge about electronics but they used the apprentices on the production line doing assembly work.
It was completely monotonous in a big tin-roofed building and in January 1959 the heat was staggering. It was an incredibly difficult job and I only lasted two and a half weeks.
I went back to my parents and asked if I could go back to school and do my leaving certificate. They said yes. If the job had been good, I probably wouldn't have bothered going back to school.
What's the best money advice you've ever received?
When I went to rent the second building for Dick Smith electronics, I had no money. I asked a wealthy friend for advice. I had found a building at Gore Hill on the Pacific Highway in Sydney.
He said to take it because so much traffic goes past. He came to the negotiation with me and the lease was $120 a week for two years. He said, of course, we won't rent it without the option to purchase. It was $62,000 and in those days a house was around $30,000.
We got the option to purchase and the amazing thing was that within two years I managed to raise the deposit and went to a finance company to borrow the rest.
Then, whenever I opened a Dick Smith shop, I asked for an option to purchase and I was buying buildings in the '60s and '70s. Most people think my wealth has come from electronics and publishing, but most has come from property ownership. I ended up making millions in property from that advice.
What's the best investment decision you've made?
To buy the Dick Smith head office building at North Ryde in Sydney. I once again leased with an option to purchase. It was $1.7 million and I kept it for about 20 years and sold it for $30 million.
I ended up making more money out of selling the head office than from selling the whole business. The reason the value went up so much was they built the underground railway right underneath it and then the council rezoned the building, so I did extremely well by complete luck.
What's the worst investment decision you've made?
Investing in a small icebreaker ship. I like to help adventurers like sailor Don McIntyre, who wanted to bring a small icebreaker back to Australia from Finland and make trips to Antarctica.
There were always adventurers who wanted to charter a boat to Antarctica, but right at the time we brought it back here there was a lack of adventurers and we only did one trip and I lost $1 million.
My advice is - don't buy an icebreaker.
What is your favourite thing to splurge on?
Helicopters! At one stage I owned three, now I just have one Agusta - it's like the Ferrari of helicopters and can get up to 350km an hour.
It's a beautiful machine I fly myself, with two engines. I love helicopters, so if I splurge on anything it would be a helicopter.
If you had $10,000 where would you invest it?
In Woolworths or Wesfarmers, because everyone has to eat. I believe we will have tough times economically and can't have endless growth. Everyone has to eat, even when times are tough.
What would you do if you only had $50 left in the bank?
I'd go to some of my friends I've helped over the years and tell them, it's now your turn to help me.
Do you intend to leave an inheritance?
Yes, I intend to follow the Bill Gates Giving Pledge, giving half of our wealth (mine and my wife's) to charity. We've talked to our daughters and they've agreed.
The Dick and Pip Smith Foundation already gives away $1 million a year and when we pass away we have set it up to continue.
The Bill Gates Giving Pledge is the most wonderful thing. Every wealthy person should sign it. I do it because it makes me feel good. I like helping people. I consider it's an obligation that if you've done well, you give back. It was also part of my Scout training.
Finish this sentence: money makes ...
... the potential for people to be able to do worthwhile things for themselves and others.
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