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Daniel Andrew Beal

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Daniel Andrew "Andy" Beal (born November 11, 1952) was born in Michigan and is a self-made billionaire who accumulated wealth in real estate and banking. Beal has an estimated worth of USD$8.4 billion as of September 2012. He is also a self-taught mathematician.

Andy Beal grew up in a middle class family but found many ways to make money even as a kid. He mowed lawns. He and his brother charged other kids to throw darts at balloons attached to wooden boards in his backyard. He and an uncle repaired and sold televisions. Beal started a business that physically moved houses from one part of town to another. He also managed about a dozen rental properties.After turning 21, he made money playing at Las Vegas blackjack tables, and his card-counting skills eventually got him kicked out of many casinos.

His first big deal came in 1976, when he was only 23. He went to a federal auction in Washington, D.C., bidding on a Waco, TX apartment building, despite never having been to Texas before then. He won with a bid of $217,500, and, amazingly enough, only put up $17,500 of his own money and paid the rest with a $200,000 loan. He sold the building three years later for about $1 million more than he paid.

His first bank launched with $3 million in capital in 1988. By then, the Texas oil and real estate bust was devastating the local banking industry. However, he was about to find good deals buying from the Resolution Trust Corp, a government-owned liquidator of savings-and-loan assets, and other sellers at steep discounts. This laid the basis of his fortune.

In the mid 1990s, he founded Beal Aerospace to compete with NASA and others for satellite launches. But it folded later in 2000, with Beal saying it couldn't compete with NASA's "subsidized launch systems." Beal spent an estimated $200 million on the project, according to press reports, though he has never confirmed that figure.

Between 2001 and 2004, Beal went to Las Vegas to play poker with professionals as chronicled in "The Professor, the Banker, and the Suicide King: Inside the Richest Poker Game of All Time". During the real estate boom of the early to mid 2000s, Beal refused to lend much, preferring to stay on the sidelines. However, he bought aggressively during the 2008 financial crisis, with Beal Bank's assets having tripled to $9.2 billion at the end of 2009 compared to the fall of 2007.

Companies and Investments

  • Beal Bank
  • Beal Bank USA
  • CSG Investments
  • Loan Acquisition Corporation
  • CLG Hedge Fund
  • Beal Aerospace(closed)

Lessons Learned

Wait for a good deal before you go to bat.

As a self-taught mathematician, Beal has an uncanny reputation for being able to find great deals. He claims this is the philosophy he has had for the past 20 years, and it has definitely served him well. From his first real estate deal in 1976, to gobbling up liquidated savings-and-loans assets in the midst of a recession, to buying power generation and infrastructure bonds during post-Enron California and finally, to scooping up billions of dollars of commercial and real estate loans in the aftermath of the 2008 financial crisis, Beal has consistently stuck with his principles. It should not be ignored that he did nothing during the major credit booms until he was sure of a great opportunity.

Make sound bets, and then manage your risk on those bets.

"Often wrong, but never in doubt." So reads a sign in his office. Beal's business judgments have not been failproof. For instance, in 2004, he thought the credit boom would end fairly soon, maybe in 6 months. He did not foresee it would end up lasting 4 years. Beal also sold a loan made to Trump Entertainment Resorts at a discount in a restructuring. He even started an aerospace company with the aiming of competing against NASA. Others thought this was a very risk venture, but he felt the risks were manageable and acceptable. Beal's experience shows that the trick is not getting everything right, but making sound bets that you have strong conviction in, and managing the risks of those bets.

Inspiring Quotes

Daniel Andrew Beal's Quotes

I just take situations that people perceive to be high risk, and I decide that they can be managed to low risk.

Daniel Andrew Beal

Often wrong, but never in doubt

Daniel Andrew Beal

Look for great deals, when you find them, do them, and if you don’t find them, do nothing.

Daniel Andrew Beal

Influential Books

Michael Craig - The Professor, the Banker, and the Suicide King: Inside the Richest Poker Game of All Time

Napoleon Hill - Think and Grow Rich