#171 Chuck Feeney The Billionaire who gave all of his money away

In the book "The Billionaire Who Wasn't," Conor O'Clery unveils the enigmatic life of Chuck Feeney, a man who amassed and then secretly gave away a vast fortune. Feeney, once listed erroneously by Forbes as a billionaire, had in fact divested himself of his wealth, living a life of frugality and anonymity. The book, recommended by a listener and prefaced by a documentary on Feeney, explores his complex and paradoxical nature—gifted at making money yet uncomfortable with wealth. Feeney's business acumen, particularly his duty-free shopping empire, is highlighted, with anecdotes illustrating his early ambition, innovative thinking, and relentless pursuit of opportunities. Despite his success, Feeney's later years are marked by a philosophical shift towards philanthropy, influenced by Andrew Carnegie's essay on wealth, leading him to adopt a "giving while living" approach, ultimately shaping his legacy as a philanthropist who prioritized impactful, anonymous giving over personal luxury and recognition.

• Chuck Feeney experienced profound relief after divesting himself of his vast wealth in secrecy.
• Despite Forbes listing him as a billionaire, he had in fact given away his fortune.
• This event was kept secret from the public for a long time.

"Chuck Feeney felt a profound sense of relief. He had flown into the Bahamas that morning an extremely rich man. Now he was flying out with little more to his name than when he had started out on his various business ventures three decades earlier."

The quote captures the moment Chuck Feeney divested himself of his wealth, emphasizing the secrecy and relief he felt at no longer being burdened by his fortune.

• The book "The Billionaire Who Wasn't" by Connor O'Clery details Chuck Feeney's journey of making and giving away a fortune.
• The book was recommended to the speaker by a listener and provided insights into Feeney's character.
• Feeney is described as unique, complex, and paradoxical.

"Four years later, Forbes magazine listed Feeney as the 23rd richest American alive, declaring him to be a billionaire with $1.3 billion. But Forbes had got it wrong and would continue to repeat this mistake for many years afterward."

The quote highlights the misconception about Feeney's wealth perpetuated by Forbes, despite him having given it all away.

• Chuck Feeney is regarded as complex, tough, paradoxical, inspiring, and enigmatic.
• He is described as a quick thinker and worker, with a type A personality.
• Feeney is known for his ability to learn quickly about others while revealing little about himself.

"A conversation with Chuck Feeney is unlike any conversation you'll have with anyone on earth."

This quote conveys the unique and engaging nature of conversations with Feeney, setting him apart from others.

• Feeney came from a working-class New Jersey background and aimed high by applying to Cornell University, despite his family's lack of higher education history.
• He demonstrated ambition and the desire to achieve seemingly unattainable goals from an early age.

"The letter of acceptance was a major event for the Feeneys. No one in the family had ever been to a university."

The quote reflects the significant milestone Feeney achieved by being the first in his family to attend a university, showcasing his early ambition.

• Feeney's business acumen was evident early on, as he was always seeking an edge and was willing to learn new skills, like Russian, to improve himself.
• He met Bob Edmonds, who introduced him to the idea of selling duty-free liquor to American sailors, leading to the foundation of his future business empire.

"One night in a bar, he met Bob Edmonds, who was trying to start a business selling duty-free liquor to American sailors at ports around the Mediterranean."

The quote describes the serendipitous meeting that sparked the idea for Feeney's future business ventures in duty-free sales.

• Feeney and Robert Warren Miller formed a partnership after a chance encounter, which would become one of the most profitable in international business.
• Their initial business involved selling duty-free goods to U.S. naval personnel, exploiting a market with no need for upfront capital.

"Miller recognized the wiry, blue-eyed American immediately. Feeney, he said, what are you doing here? What are you doing here? Replied Chuck."

This quote marks the beginning of Feeney and Miller's partnership, highlighting the chance nature of their meeting and the start of a significant business relationship.

• Feeney and Miller expanded their inventory beyond liquor to include other duty-free items, leading to rapid business growth.
• They utilized a strategy of employing bird dogs to increase sales, demonstrating Feeney's instinctual business approach and flexibility.

"The booze business had become very competitive, and the two looked for other things to sell."

The quote illustrates the adaptive strategy Feeney and Miller employed to expand their business in response to increasing competition.

• Feeney realized the market for duty-free goods extended beyond the military, identifying a loophole that allowed him to sell to American tourists in Europe.
• He capitalized on this opportunity by distributing brochures to tourists, significantly expanding his customer base.

"I all of a sudden realized, shit, you can sell this to anybody, anywhere, said Feeney."

This quote captures the moment Feeney recognized the potential to expand his market, leading to the growth of his business.

• Feeney discovered Duty Free Shoppers, a company with a similar business model, which was failing due to a one-time distribution gamble.
• He recognized the potential of the company and eventually acquired it, turning it into a successful enterprise.

"Feeney believed this company was way ahead of the game."

This quote reflects Feeney's recognition of Duty Free Shoppers' potential, despite its initial failure, which he would later capitalize on to build his empire.

• Chuck Feeney was shocked by the inefficiency of the company's distribution system.
• He believed in the core principle of the company and its potential to thrive with proper marketing.
• Feeney made an offer to purchase company stock, aiming to take control of its limited assets.
• His fast-paced and idea-driven personality is likened to historical figures like Teddy Roosevelt.

"Feeney was visibly shocked, but not at a loss for words. He spoke very fast, asking what is to become of this company, these offices, and what the orders that were still in the pipeline."

• This quote highlights Feeney's immediate concern for the company's future and his proactive approach to addressing issues.

"Feeney was convinced that the principle was sound and that the company could still survive and thrive with proper marketing, which they failed at."

• Feeney saw potential in the company despite its current struggles, particularly with a focus on improving its marketing strategy.

• Feeney and Miller adapted their business model to include selling cars to American service personnel abroad.
• They recognized the opportunity to sell high-ticket items duty-free, similar to their liquor sales.
• This pivot in strategy led to an overwhelming number of orders and a realization that they could expand their product offerings.

"They discovered that American service personnel abroad also had the right to buy cars duty-free."

• This quote explains the opportunity Feeney and Miller capitalized on, which significantly broadened their business scope.

• Chuck and his team were described as aggressive, self-confident, and enjoyed a strong sense of camaraderie.
• Their success was partly due to being in the right place at the right time and not having to maintain inventories.
• The business was offshore, allowing them to avoid US taxes, increasing profitability.

"Chuck and his team were aggressive, self-confident, and borderline legal. They enjoyed a great sense of camaraderie."

• This quote captures the team's spirit and the aggressive approach that contributed to their early success.

• Feeney acknowledged the increasing competition in Europe and sought less crowded markets.
• He identified the Pacific as a new opportunity and bid on exclusive airport duty-free contracts.
• The business faced challenges, but Feeney's foresight in bidding for the Honolulu airport concession would later prove pivotal.

"Feeney believed that there could be more lucrative opportunities in the less crowded Pacific."

• This quote demonstrates Feeney's strategic thinking in finding new markets to avoid competition.

• Despite booming business, the company was chronically short of cash due to poor financial controls.
• They faced severe problems in the auto sales division, using customer deposits for expenses.
• The company's rapid expansion led to neglect in bookkeeping, corporate structuring, and financial management.

"The company was booming, but was chronically short of cash. We ain't got no money, boys. Where's the money?"

• This quote reflects the paradox of a thriving business that is simultaneously struggling financially due to mismanagement.

• Feeney and Miller faced a "perfect storm" of setbacks in 1965, risking bankruptcy.
• They decided to focus on the duty-free shops in Hong Kong and Hawaii to recover from debts.
• The company was rebranded to Duty Free Shoppers, dropping previous names and focusing on retail ventures.

"Feeney and Miller were almost back to where they started."

• This quote summarizes the dire situation Feeney and Miller found themselves in, having to rebuild their business from the ground up.

• The duty-free shop in Honolulu started modestly but was positioned to capitalize on the influx of Japanese tourists.
• Japanese tax policies and the increase in passenger flights contributed to the shop's success.
• Feeney's strategic decisions and the evolving market conditions set the stage for the company's growth.

"The duty free shops at Honolulu International Airport, when Chuck arrived to run it in late 1965, was little more than a market stall."

• This quote depicts the humble beginnings of what would become a significant enterprise in the duty-free industry.

• Chuck Feeney's duty-free shops capitalized on tax exemptions for imported premium cognac and whiskey, offering significantly lower prices than retail stores in Tokyo.
• The initial trickle of Japanese tourists turned into a large influx due to the attractive pricing, indicating the success of Feeney's pricing strategy.

"In Tokyo, a bottle of whiskey that retailed for $25 only cost $6. In Chuck's shop, a bottle of cognac that would cost $50 in Tokyo, cost $10 at Chuck's shop."

This quote emphasizes the price difference due to tax advantages in Chuck Feeney's duty-free shops, which was a key factor in attracting Japanese tourists and boosting sales.

• DFS faced challenges including obtaining credit from suppliers and overcoming a negative reputation among luxury brands.
• Feeney's strategy involved negotiating beneficial terms and leveraging the potential of the Asian market to gain supplier confidence.

"When Michael Kamis turned up in Hawaii 1965, duty free shoppers was having trouble getting credit from most suppliers... They think these guys are like drug dealers, scam artists, that kind of thing."

The quote highlights the initial distrust between suppliers and DFS, and the challenge DFS faced in securing credit due to their reputation.

• Chuck Feeney convinced Camus to provide DFS with generous credit terms and a low purchase price, which was instrumental in establishing a successful partnership.
• Feeney's approach mirrored Claude Hopkins' advertising strategy for Goodyear, emphasizing reciprocal benefits and service.

"Give me beneficial terms. Give me 120 day credit, and sell it to me at $2 a bottle... DFS would promote the cognac and give it a much needed distribution network in the Pacific and the Far East."

This quote describes the negotiation between Chuck Feeney and Camus, focusing on mutual benefits to both parties, which was a cornerstone of Feeney's business strategy.

• Feeney used the relationship with Camus to secure credit from banks by setting up a separate company in the Bahamas.
• This creative financing allowed DFS to grow their business and generate substantial profits for the partners.

"DFS would set up an agency in the Bahamas to become exclusive worldwide distributors for Cognac... The agencies would purchase large stocks from Michael Kamis, which we sold now to this separate company."

The quote explains the innovative method Feeney used to secure financing and expand DFS's operations through an agency in the Bahamas, leading to significant profits.

• DFS's profitable operations allowed for substantial dividends, which were mostly distributed in cash.
• The company's success led to the opening of additional stores and the implementation of strategies to increase repeat customer visits.

"The first dividend was $31,250. It was divided among the four owners in 1967... By the 1980s, they're turning over billions."

This quote shows the progression of DFS from its first modest dividend to becoming a billion-dollar enterprise, reflecting the company's exponential growth.

• Despite their success, Feeney began to question the extravagant lifestyle that wealth brought and started to embrace frugality.
• His changing philosophy led to a focus on philanthropy and a desire to give back while living, influenced by the likes of Andrew Carnegie.

"Feeney's began sharing a life with wealthy and extravagant people... A time went by, Feeney was starting to rethink his attitude about that kind of life."

The quote captures Feeney's transition from enjoying a luxurious lifestyle to questioning its value and ultimately rejecting it in favor of a more meaningful approach to wealth.

• Chuck Feeney was known for his detailed and hands-on approach to business, seeking continuous improvement and new opportunities.
• His competitive nature was balanced by a desire for a meaningful life, which included family well-being and the opportunity to learn and teach.

"He was intensely competitive, but his motivation was derived from the creative challenge of applying a better approach to something that had already existed... There has to be a balance in life, he said, a balance of business, family, and the opportunity to learn and teach."

This quote reflects Feeney's multifaceted personality, combining a competitive business mindset with a strong commitment to family and personal growth.

• Chuck Feeney is known for his philanthropic efforts, particularly in the field of education.
• Feeney's approach to philanthropy is to provide access to those who are smart and determined but lack resources.
• His giving is global, with contributions in Vietnam, Ireland, America, Australia, and more.
• Feeney's foundation is expected to give away around $7 billion.

"Giving, he likes to build brick and mortar, mortar like education systems. He'll pay for people's colleges, Feeney that is. But this idea, know, if you're aspiring, there's a lot of poor, smart, determined people that don't have access. So if I can use my wealth to give them access, that's a good."

This quote highlights Feeney's commitment to building educational infrastructure and his desire to use his wealth to provide opportunities for the underprivileged.

• Andrew Carnegie's philosophy of modest living and giving during one's lifetime deeply affected Feeney.
• Feeney researched Carnegie extensively, indicating the profound impact on his own philanthropic approach.
• Feeney shares Carnegie's essay on wealth with his foundation team to communicate his giving philosophy.

"Carnegie also cautioned that a man of Welsh should set an example of modest, unaustentious living, shunning displays of extravagance. What Carnegie advocated was to have a profound effect on Feeney."

The quote emphasizes Carnegie's advocacy for modesty and philanthropy, which inspired Feeney's own principles of giving.

• Feeney struggled to articulate his philosophy on life and instead used literature to express his ideas.
• He distributed Carnegie's essay on wealth to convey his principles to friends, family, and his foundation.
• Feeney's actions reflect the idea that sharing knowledge can amplify power.

"Feeney gave all the people involved in his foundation a copy of Carnegie's essay on wealth to read. Although brilliant when talking about business, Feeney was never good at articulating his philosophy on life."

This quote illustrates Feeney's method of using existing works to communicate his life philosophy due to his own difficulty in expressing it verbally.

• Feeney's approach to wealth was not to flaunt it but to give it away quietly.
• He insisted on anonymity in his philanthropic efforts, avoiding public recognition.
• Feeney's secretive nature was a strategic aspect of his business and giving practices.

"From the start, Chuck Feeney was adamant that he did not want recognition for his giving. There would be no plaques or names on the buildings he funded, no thank you dinners, no honorary degrees."

The quote reveals Feeney's strong preference for anonymity and his aversion to public acknowledgment for his charitable contributions.

• Feeney's business partnerships were strained by differing visions and personal disputes.
• The partners' friendship weakened as their wealth and success grew.
• A lawsuit arose over the decision to sell the company to LVMH, highlighting the challenges of partnership.

"It's clearly something to know that partners grew apart as they made more money. The more successful they were, the weaker the bonds of friendship became."

This quote reflects on the changing dynamics within Feeney's business partnerships as success led to diverging interests and weakened friendships.

• Feeney's commitment to philanthropy and modest living led to a rift with his wife, who enjoyed a more lavish lifestyle.
• The couple eventually divorced, and Feeney made financial arrangements for his family.
• Feeney's divorce and the subsequent settlement reflect the personal cost of his philanthropic commitments.

"So he did agree. Okay, I'm not going to give away. He put away almost all of his assets and this money and the houses are in her name, not his, which is really interesting."

The quote describes Feeney's agreement to retain certain assets for his family, highlighting the intersection of his personal life with his philanthropic philosophy.

• The partners' legal disputes were seen as unnecessary and regrettable in hindsight.
• The wise man or arbitrator's advice was ignored, leading to protracted legal battles.
• The breakdown of the partnership and the sale of the company to LVMH marked the end of an era.

"All the stuff we did, the legal stuff, was just stupid. It was useless. We should have just figured it out ourselves."

This quote from Bob Miller expresses regret over the legal disputes that ensued among the business partners, suggesting that a more amicable resolution was possible.

• DFS's success was attributed to being at the right place at the right time, with astonishing growth and profits.
• The sale of the company to LVMH for billions marked the culmination of the business's success.
• Feeney's timing in selling his share was seen as genius, especially given the subsequent downturn in DFS's fortunes.

"The success of dfs arose from the fact that we were in the right place at the right time. Nobody ever put a penny in the business. We took out 8 billion."

The quote summarizes the phenomenal success of DFS and the extraordinary profits extracted by the owners, reflecting on the combination of luck and business acumen.