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Daniel Ludwig: The Invisible Billionaire
The elusive Billionaire who used the now overused phrase called “Other People’s Money” or simply OPM

by Nach M Maravilla

Daniel Ludwig was a very secretive man. He lived quietly in a Manhattan penthouse, from which he generally walks to his office a few blocks away. Somewhat crippled by an old back injury, he makes his slow and painful way along the sidewalk, all alone, he can be taken for an elderly pensioner out for a breath of air. 

He seldom talks to anybody on his daily jaunt and is particularly curt with reporters who occasionally try to accost him along his route. He hasn't talked to reporters for years. Even when he does talk to them, his habitual secrecy keeps him from revealing everything. He fails to mention, or perhaps deliber­ately hides, all kinds of information from the important to the rela­tively trivial. 

Back in 1957 he granted to Fortune reporter Dero Saunders what the magazine said was the first press interview in Ludwig's whole career—and which became the only record of his openly discussing his life and career with a journalist and that article became the chief source of information for later researchers of Daniel Ludwig’s background. Saunders reported, for example, that the twice-married Ludwig had no children of his own. In fact, he had a daughter by his first marriage. Important?  Hardly. Yet, the peculiar little inaccuracy illustrates Ludwig's temperament. As Dero Saunders himself wrote somewhat wryly in the 1957 report, "Ludwig's most notable characteristic.., is a lifelong penchant for keeping his mouth shut." But as he listened to Ludwig relate his success story, Saunders developed an almost unqualified admiration for the man. He noticed one negative aspect on the man, however and that was Dan’s stinginess. He wrote:    

Ludwig's organization is staffed with competent men—but not one man too many

As he proceeds almost to triple his tonnage, more men must be added; and sheer numbers of staff have a way of upsetting organizational structures. The present setup allows him to step into any decision anywhere in the organization. True, he frequently delegates decisions, even some major ones. But it will be a severe strain on him either to make or to delegate any more decisions than he already does.

Ludwig’s frugality, as Saunders wrote, made him almost an ascetic, despite his wealth.  

“Loving his work to the ultimate degree, Ludwig is unable to take much pleasure from anything else…He counts calories religiously, and occasionally brings a diet book into the office to show to some employees who are gaining weight. He likes martinis, but later on leaned toward the milder substitutes like buttermilk and soda. As one friend summed it up, “Ludwig doesn’t drink much, he doesn’t smoke at all, he doesn’t entertain lavishly. His only bad habit is work – and that he can’t stop.”  

A reporter phoning Ludwig's New York headquarters will be airily told by the operator that there is no Daniel Ludwig in the company--at least, not on her list of telephone extensions. Further inquiry will reveal that a shad­owy figure answering to that name does occasionally drop in, but nobody admits to knowing exactly who he is, what he does or how he can be reached.

Strange, but most Americans had never heard of Daniel Keith Ludwig. Even the sophisticated New Yorkers who fancied themselves to be the smartest and well-informed people in the world, had not the slightest idea that that limping old man they see striding up the street was the world’s multi-billionaire.

It was hard to figure out. In the days of mass media coverage and public obsession with world’s records, a man managed to accumulate a billion dollar fortune with no one becoming aware of it?

Yet, Dan Ludwig was able to do just that. His footprints can be found all over the world.

He owned what is probably the world's biggest private shipping fleet --bigger than those of either Stavros Niarchos or Aristotle Onassis. The fabulous Greek shipping tycoons made considerably more splash than Ludwig and are far more colorful, but in sheer fortune-building Ludwig towers high above them. His fleet approximates five million deadweight tons and includes the five or six biggest oil tankers ever built.

Ludwig was also the major shareholder in a string of savings-and-loan companies; a large collection of hotels, office buildings, and other real-estate ventures in the U.S. and overseas; coal and iron and other natural-resources developments from Australia to Mexico; petroleum and petrochemicals refineries in Florida and Panama.

He amassed this huge collection of businesses in an atmosphere of eerie silence. For many years, he and his second wife lived in an unostentatious house in the commuter town of Darien, Connecticut. "We almost never saw them," says a neighbor. "They never came to cocktail parties around town or anything like that. Nobody knew exactly who they were. I always thought he was some kind of bank executive--you know, a salary guy, maybe forty grand, nobody very important."

Ludwig in his prime was a tall, lean, ruggedly handsome man. He was born in June, 1897, in South Haven, Michigan, a small lakeside community. His father was a real-estate broker and speculator, com­fortably successful but not rich. Young Daniel was fascinated by boats and ships. At the age of nine he found a sunken 26-foot diesel boat that had been abandoned as not worth the salvage costs. He bought it from the owner for $25, which he amassed by working and by borrowing from his father. He raised the boat and spent an entire winter repairing it. The following summer he earned some $50 by chartering the boat. This was his first experience in the shipping business, and he enjoyed every minute of it--particularly the knowl­edge that he had come out with a profit.

His father and mother separated when he was in his early teens, and he went with his father to Port Arthur, Texas, a shipping town in which the father had found some real-estate opportunities. Still intrigued by ships, young Dan dropped out of high school to go to work on the waterfront. He drifted around for a few years, ending at a marine engine plant from which he was sent out to help install ship engines in various ports around the country. He liked the work, discovered he was good at it and began moonlighting, installing and repairing engines on his own. At the age of nineteen he had more private contracts than he could handle, so he quit his job. It was the last job he would ever have.

Over the next twenty years there were many months when he wished he did have a job. Unlike some of the other men we'll meet later, Dan Ludwig did not enjoy high success at an early age. He bounced from one waterborne venture to another, buy­ing and repairing and selling and chartering ships, and sometimes he made money and sometimes he lost. He seldom had much cash to spare, was almost always in debt, and on several occasions teetered on the edge of bankruptcy. His problems were aggravated when, at the age of twenty-nine, he was injured by a gasoline explosion in the cargo hold of an aging tanker. "The reason he was down in the hold," says a former executive of one of Ludwig's companies, "is that two crewmen had been overcome by fumes and Dan (D.K.) went down to haul them out. For the rest of his life after that explosion he was tormented by pain in his back. But if you asked him how he got hurt he'd just say, 'Oh, I was in an accident.' A lot of people assumed it was an automobile crash. That was the kind of guy Dan always was: never said much about himself."

It was in the mid-1930s, when the late-blooming Ludwig was nearing the age of forty, that he finally began building the foundation of his present monumental fortune. That was when he discovered OPM.

He had borrowed money often before, of course, starting with his first ship-salvage venture at age nine. "But," says a Chase Manhattan Bank officer, "it hadn't been what you could call creative borrowing. He hadn't learned how to use other people's money as a lever to increase his own economic horsepower."

Ludwig arrived at his success formula in two main steps. The first step came when he wanted to borrow some money to buy an old general-cargo ship and convert it into an oil tanker. (Oil transport paid more than dry cargo.) He went to various banks in New York.

They looked at his frayed shirt collar and asked what he proposed to put up as collateral. He had to admit he owned but little in the way of worldly goods. He did have one elderly tanker afloat, however--the one in which his back had been hurt--and it occurred to him that he might be able to make a deal involving this ship.

"He came to this bank," says the Chase man, "and told us he had his tanker chartered out to some oil company. The monthly charter fees he received were just about equal to the monthly payments he'd have to make on the loan he wanted. So, he proposed to assign the charter to the bank. The bank would then collect the charter fees directly from the oil company, and that money would go toward paying off Ludwig's loan."

To many bankers it seemed like a crazy setup. Yet, it was in reality as safe for the bank as almost any small-business loan. Ludwig alone might not have been a four-A credit risk, but the oil company's credit was good. The bank could assume that, barring unforeseen economic catastrophes, the oil company would faithfully keep up its charter payments on the tanker. Even if Ludwig's new ship-converting ven­ture sank as had some of his others, the bank would still keep getting its money as long as the old tanker and the oil company stayed afloat. In effect, Ludwig was boosting his own feeble credit rating by using the oil company's.

The bank made the loan on that basis. Ludwig bought the old general-cargo ship he wanted, converted her to an oil tanker, chart­ered her out, used her to get another loan on the same basis, and converted still another dry-cargo ship to oil.  

This went on for a few years. As each loan was paid off, Ludwig came out with free-and-clear title to a ship. The charter fees for that ship stopped flowing to a bank and began flowing into his pocket. His cash position, his credit rating, and his shirt collars improved rapidly.  

And now, he was struck by a still more intriguing idea. If he could borrow money on an existing ship, why couldn't he also borrow on a ship not yet built?  

This was his second giant step in learning the uses of OPM. Ludwig's new proposition went something like this. He would design a tanker or some other ship for a specialized purpose. Before the keel was even laid, he would find a customer to charter her when she was completed. Waving the charter contract, he would walk into a bank and ask for a loan with which to build the ship. The loan was to be of the deferred payment variety, under which the bank expected little or none of its money back until the ship was actually afloat. Once she was afloat, the charter fees would be assigned to the bank and the loan would be paid off as before. Eventually, when the entire years-long transaction was completed, Ludwig would sail away as owner of a ship in which he had invested barely a dime of his own money.  

Once again the proposition startled the banks. But once again it made sense when examined closely. Ludwig's own credit rating was now quite acceptable--and, as before, he was backed up by the credit of his charter customers. "A loan arrangement of this kind," says the Chase officer, "is what we call 'two-name paper'--meaning, in effect, that payment is guaranteed by two different companies or men who are more or less independent of each other economically. That is, if one gets into trouble and defaults, the other won't necessarily be in the same trouble and if all goes well will honor the obligation. The bank, you see, gets an extra measure of safety for its money."  

Ludwig was now well launched on his great fortune-building odys­sey. He had started by renting space in other people's docks and shipyards. Now he began building his own facilities--using OPM, of course. His small shipbuilding company prospered and grew explo­sively during World War II, when the U.S. government was a greedy customer for every tanker he could build.  

An impressive postwar boom began to show itself in the late 1940s, and Ludwig looked for ways to expand. He decided (as did many other shipbuilders and shipping operators) that the United States had become one of the world's worst places in which to base a business of his kind. Labor costs, materials prices, and taxes were all too high, and the entire shipping industry was bogged in a vast, tangled sea-weed-bed of tariff problems and other governmental restrictions. It was time, Ludwig thought, to look around the world.  

In the early 1950s, he found an enticing deal in Japan. The Japanese, losers of the war and at that time economic losers too, had a huge naval shipyard at Kure--birthplace of battleships, aircraft carriers and other giant craft. The war's end had closed it down, throwing thousands out of work and plunging the region into a severe, long-lasting, and seemingly incurable depression. The Japanese govern­ment was anxious to get something started there but was treading warily for fear that Kure might be turned into an American naval yard and permanent military base. When Ludwig came around--a private American citizen with lots of cash and even more credit--the Japanese welcomed him joyfully. (One local official, it is said, literally had tears of happiness streaming down his cheeks as he signed some contracts later.) The Japanese quickly made a deal with the taciturn American. In return for certain easy concessions on his part--he had to hire Japanese labor and use Japanese steel, for instance, which he wanted to do anyway--they gave him a cheap, long-term lease of the Kure shipyard plus an attractive assortment of tax and tariff deals and other pot-sweeteners.  


Ludwig built tankers, iron-ore carriers, and other ships at Kure from then until the present time. He built bigger and bigger ships; each succeeding generation could carry more cargo at a cheaper rate per ton. He sold some, kept others. As his fleet expanded, he set up new companies around the world to operate the ships--companies incorporated in nations such as Liberia and Panama, which offer a shipper all kinds of advantages in terms of taxes, labor laws, and ship-registration expenses. In time he began to fit new pieces into the structure of his global empire. He acquired mining and petroleum properties whose transportation needs could be served by his ships. He set up banking and loan companies that could participate in the financial flow his empire generated. He amassed what must surely be one of the highest piles of wealth ever shoveled together by one man.  

One man? That is almost literally true. Ludwig owned many of his ventures and properties outright; he is majority owner of most of the others. Ludwig has never been attracted by the idea of equity financing, in which you raise money for a venture by selling some or most of the ownership and future profits to other people. Ludwig hasn't wanted a horde of stockholders telling him what to do. He has always preferred to move ahead by borrowing other people's money and keeping the ownership for himself. Except in a private deal, it has never been possible to buy stock in any Ludwig venture.  

In 1967, Ludwig launched his biggest enterprise ever – an attempt to convert four million acres of Amazon rain forest into productive forestry operations, rice paddies, cattle ranches and mines. This project was so vast that even Ludwig couldn’t keep it secret. It was the ultimate exploiter – Ludwig—against the earth’s largest jungle. Ludwig was leveling rain forests with tractors and bulldozers, fire and explosives, airplanes and herbicides, chain saws and axes, in order to grow a tree brought from Asia by way of Africa. Within a few years, he turned thousands of square miles of tropical forest into a charred, blackened battlefield littered with stumps.  

In 1986, much of Ludwig’s fortune were turned over to two foundations – one in Zurich and the other in New York – set up ostensibly to find cures for cancer but more probably as a preventive medicine against paying a sizable portion of his wealth in taxes.  

He remained a mystery until his death in 1996.  

Ludwig's successors, whoever they turned out to be, may have wished in the end that the great borrower had engineered the colossal structure in a different way. But, at the moment, one achievement stands out starkly. Daniel Keith Ludwig came from nowhere and made himself one of the richest men on earth.  


US President Nixon gave $100 million in the "war against cancer" - D.K. gave considerably more!

The LICR (Ludwig Institute for Cancer Research) is now the world's largest academic institute dedicated to the fight against cancer, and is ranked alongside the Red Cross, the World Health Organization, and the World Bank in terms of research impact. It is also the only academic institute that sponsors its own clinical trials in cancer therapies - no pharmaceutical shareholders involved! - (Sarah White - LICR)


  • The Very, Very Rich and How They Got That Way – Edited by Max Gunther

  • The Invisible Billionaire – Jerry Shields

  • The Ludwig Institute for Cancer Research