Sam Zell is one of the greatest Real Estate investors of all time! Known as the “King of Real Estate” he has is a Billionaire with a net worth of $6 Billion according to Forbes.  Zell is also nicknamed the “Grave Dancer” as he buys when everybody in the real estate world is getting killed! 

The investment firm Zell founded in 1969, Equity Group Investments expanded from Real Estate to own a variety of different businesses from the Schwinn bicycle company, Chicago Tribune, Los Angeles Times and much more. 

You could think of Zell as a “Poor Man’s Warren Buffett” who buys undervalued assets…if “poor” is a net worth of $6 Billion! Sam Zell was named one of our Top 20 Greatest Investors of all time.

Personal Life & Wife:

Zell has been married three times and divorced twice, he has three children from his first marriage and an adopted daughter  from his second marriage. His third wife is Helen Zell. Sam Zell and his wife Helen Zell live in Chicago, Illinois but also have homes in Sun Valley, Idaho and Malibu, California.

Is Sam Zell Self Made?

Yes! Sam Zell is a true self made success story who followed “The American Dream”. Zell had humble beginning as the son of Polish Emigrants which fled Nazi Germany in 1939. 

His father was a grain farmer in Poland & then a Jewellery seller in America. From young it was clear Zell had a strong entrepreneurial tendency. As a boy he started buying Playboy Magazines in the city and selling them to friends for a massive 600% mark-up! 

How did Sam Zell Make his Money?

Sam Zell made his money using his entrepreneurial Spirit, buying undervalued assets and identifying supply & demand imbalances.  After making money selling Playboy magazines as a Boy…Zell went to college. In college, he asked the landlord of a 15 unit student housing building if he could manage the property in exchange for a free room & board.

Zell learnt a lot from the experience about refurbishing properties and he began buying distressed properties, renovating them and then renting to students. 

Afterwards Zell branched out from student rentals to commercial properties to residential units, resorts and even manufactured homes.  Zell began incorporating his different types of holdings into real estate investment trusts (R.E.I.T).

He organized his different real estate investments into various trusts which allowed him to sell them off as he wished. A notable example is the whopping $36 billion sale to investment giant Blackstone.

Sam Zell & Bitcoin?

Sam Zell has a sceptical stance towards Bitcoin he stated during an interview with business insider:

” I am very sceptical, frankly, of bitcoin. Ultimately, it may be the answer or one of the answers. But right now, it’s a world that’s extraordinarily populated by chameleons and other fast-talking characters. I don’t believe everybody involved in it are the kind of people I’d like to follow.”

In another Interview with Bloomberg Zell, stated

I think all the discussions about Cryptocurrencies are in response to the whole question of “Are Fiat currencies diminishing in value?”

Sam Zell buying Gold

Sam Zell stated he was concerned with the stimulus & money printing going in the US and the Inflation is “Reminiscent of the 1970’s”. Thus despite decades criticising Gold, Zell has finally started to buy.  Zell Stated during an interview with Bloomberg in May 2021.

“The first act would be to distinguish between growth & inflation, I’m very concerned at the level of money we have dispersed. I’m very concerned at the level debt we have created to support it”

“You read about lumber prices, we’re seeing it all over the place [INFLATION], we are seeing it in our businesses the bottle necks in our businesses pushing up prices. 

“If we keep doing what we are doing right now, I think it is 10 or 15 years away. If we lose the reserve status, I could see a 25% reduction in our standard of living.”

“I think the whole issue of Fiat currencies is a real issue, the United States is not the only country printing too much money, obvious one of the natural reactions is to buy gold, which is what I’ve done for the first time in my Career.”

Zell goes onto to discuss how he was a former critic of Gold:

“It feels very funny [buying gold] , I have talked in the past about “why would you want to buy gold?” it has no income and costs to store and yet when you see the debasement of the currency, you say what am i going to hold onto. “

Sam Zell Quotes & Success Secrets

1. DON’T TAKE YOURSELF TOO SERIOUSLY

Zell often talks about his: “11th commandment, Thou Shalt not take oneself seriously” Thus being willing to laugh & joke at yourself, seems like a great rule for success & of course a happy life! 

2. GO ALL IN

Zell often talks about: “Going all in as Life is not a dress rehearsal.”  We get one shot at life and we’re here for such a short space of time, thus making the most of every situation seems like a great Key to success. Warren Buffett offers similar advice & suggests “Don’t Sleepwalk through life”

3. PRIZE LOYALTY

Loyalty defines your character & is a great trait to look for in others. Zell gives a warning about choosing who you associate with wisely: “if you lie with dogs you will wake up with fleas!”

4. Investing is a bet on Tomorrow

“In Investing your making a bet on tomorrow, How rational is the future you expect” – Sam Zell. The value of a business or real estate property is the “future” cash flows discounted back to today.

Thus you are “making a bet on tomorrow”, the trick is to analyse how rational & likely your assumptions are.

Many great investors such as Billionaire Howard Marks suggest doing a Scenario Analysis, looking at the best case, worst case and most likely case. In addition to being aware, just because something can happen doesn’t mean it will happen. 

5. Be a Problem Solver

“Entrepreneurs see problems & solutions…most people just see problems” – Sam Zell Being a problem solver is the great to many great entrepreneurial successes if you can find ways to help solve peoples “pain points” and do things “better, faster, cheaper” then you are on for a winner.

As an investor you are looking to invest into businesses which solve a real problem for people ideally a “Hair on fire problem”, a problem so essential people need to buy your product.

6. NEGOTIATE WELL

Negotiation is one of the most underrated arts in business, people assume it is about being a “Tough ass” or taking a “strong position”, but that is not what true negotiation is about. Skilled negotiators have high emotional intelligence (EQ) and spend alot of time thinking about the other person “across the table” , their needs, wants, perspectives & desires.

The bible of Negotiation is by “Ury Fisher” at Harvard they wrote the books “Getting to yes” and “Getting past No”. There are so many gems in those books for great negotiation, such as having a strong BANTA (Best alternative to a negotiated agreement).

  Sam Zell Suggests: “Spend alot of time thinking about the person across the table, their MOTIVATION & PRIORITIES!”

7. Supply & Demand

“If you find an opportunity where Supply is constrained & demand is increasing…invest” – Sam Zell.   Sam Zell tells the story of when he walks into his college class “Economics 101” and on the black board is written the words “Supply & Demand” , since then he has taken this principle and run with it.

Billionaire Investor Charlie Munger suggests “Take a simple idea & take it seriously”  . It is clear that is Sam Zell has done.

8. Be a Contrarian

“When everyone else is going left look right” – Sam Zell (Billionaire) . A successful trait of many great investors from Warren Buffett to Sir John Templeton is to be a contrarian.

This means you are using your own special insight to bet against the crowd with the goal of being right. Sam Zell applies this principle to buying distressed property when everybody else discards it as bad. 

9. Be an Opportunist 

“I’m a professional Opportunist” – Sam Zell . An opportunist spots opportunities where others see crisis. In Mandarin, the word “crisis” means both danger & opportunity. At Motivation 2 Invest we say “Volatility = Opportunity”. 

10. Take Action

“Trying to be right 100% of the time can lead to paralysis” – Sam Zell. If you worried about not taking action because you might be wrong… then you will never take action. The secret is to understand the likelihood of being right or wrong & in investing size your positions proportionality.

Generally you are looking for “Low risk, High reward” bets as Ray Dalio states, they won’t all be right…but you only need a few winners to become immensely successful. 

11. Invest into a Monopoly

“I love a Monopoly or an Oligopoly at least” – Sam Zell.  The definition of a Monopoly (not to be confused with the board game) is: “exclusive possession or control of the supply of or trade in a commodity or service.”  This could be a toll road, a rail road, real estate which is in a limited area (Central New York or London) or even big tech companies like Google (Monopoly on Search).

An interesting point Legendary Investor Mohnish Pabrai pointed out was that many Monopolies will generally try to play down their position.

For example, if Google admitted they had a Monopoly on Internet search or internet advertising (Google & Facebook two largest players) then regulation would be implemented and the company Alphabet would be broken up.  Legendary Billionaire Peter Thiel states Competition is for losers. 

12. Ensure Incentives are aligned

“Make sure all your partners share the same risk, interests aligned” – Sam Zell. When entering into any partnership it is crucial to ensure that your partners all share the same risk & have their interests aligned.

This ensures every is motivated & will pull in the same direction. In a company this can be done with stock options, bonuses, commissions etc. In a Business partnership this can be ensured by making sure everyone invests the same amount of money and takes the same risk. 

13. Assess the downside risk first

“Assess the downside risk & simplify into components” – Sam Zell.   When making any large investment decision you should assess the risk of the investment intently and “Simplify into components”. 

What is the worst case scenario? How likely is this to occur? Afterwards you can do whatever you can to remove this risk & then as Legendary Value Investor Joel Greenblatt says “Let the upside take care of itself”.

14. Make Simple Quality Decisions

“Quality of a decision is directly proportional to the simplicity of the decisions” – Sam Zell. Any idiot can make something sound complicated, a true genius can make things simple.

As Albert Einstein States: “Make Everything as simple as possible, but not simpler” . Thus bonus of simplifying things is the quality of your decisions increases. 

15. Live Efficient 

“Live Efficient, I have the fastest Yes or No in the west” – Sam Zell. A great way to improve the decision making process is to have a framework, criteria and systems this can help to avoid making the same decision multiple times.

Then you can spend time mulling over more unique and complex opportunities rather than what your going to eat for lunch! 

Want to Learn how to invest?

Many great investors, From Buffett to Sam Zell are “Continuous learning machines”. If you want to learn how to become a great fundamental investor or just join our insightful Stock Research Platform.

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Sam Zell Quotes Gallery