One thing that bothers me is when people say that Charles Koch merely just inherited there wealth implying that he did not work for it. However, these same people ignore the facts of reality about how Koch Industries was really a very small company when Charles Koch took over a company that was worth $21 million in 1961 (the company had less than 700 employees) and growing it into a $100 billion company by 2014 (with roughly 100,000 employees). What is interesting to note is that Koch Industries has grown 27 times faster than the S&P 500. Koch essentially doubles every 6 years. Charles mentions this growth rate in the company newsletter Discovery here. This would mean that Koch has a growth rate of roughly 12%/year which is pretty good considering the company has 100,000 employees and over a $100 billion in sales. Koch has grown faster than the S&P 500 too. The long term return from 1926-2014 in the S&P 500 was 10% vs 12% for Koch. This 2% difference doesn't appear to be much but when you compound it over many decades it can make a substantial difference. Part of the reason Koch may have grown faster than the S&P 500 is that the company reinvests 90% of the earnings back into the company. Koch has grown at 12% per year but the Koch net worth has grown at roughly 17% per year as I mentioned in this post (difference may be due to Charles Koch not having all his assets in Koch Industries).
Charles Koch never wanted to be a country club bum as his father Fred Koch use to put it. Growing up Charles Koch and his brothers never received an allowance. Fredrick Koch was actually the oldest out of all the Koch children and when Fred had Fredrick perform chores at one of the family ranches he had a nervous breakdown. After this disappointment Fred was very hard on his second son (Charles) and had him working at age six. Growing up Charles was somewhat of a trouble maker: he got into fights, stayed out late drinking, and had quite a following of girls according to the book Sons of Wichita. Charles even got kicked out of school for drinking beer. Even brother David Koch admits in this 1986 New York Times article that Charles as a teenager did awful things but ended up being a "bad boy who turned good". Entrepreneurs in their own way are trouble makers because often they are willing to take risks that that few people are willing to take on.
Now most people who inherited a business could have just sat back and waited for their dividend checks to come in but Charles didn't. In fact the evidence shows that 70% of family fortunes are usually spent by the second generation and 90% by the third generation. Charles was never working 40 hour weeks. In this article from Fortune from 1982 Charles was putting in 10 hour days at Koch. This article from CNN money from 1997 shows that he worked around the clock putting in 12 hour days (then after that he would go home and work some more) and expected executives to show up on Saturday mornings. Not only would he put in extra hours after he went home but would work on weekends, and holidays even. Also Charles didn't think twice about calling meetings that ran into Saturday evenings. In August 1968 he called a meeting that began at 4 P.M. Sunday afternoon and it didn't last until midnight. Charles is still working harder than ever these days. In an article from the Wichita Eagle last December his wife Liz said Charles gets up around 6 A.M. gets to work around 7 A.M. and works until 6 P.M. and then in bed by 9 P.M. He plays golf about 2 times per week. In addition to playing golf he has a daily workout routine which consists of a 90 minute work out- 30 minutes of Pilates, 30 minutes of aerobics (usually on a elliptical), and 30 minutes of weight lifting). According to his wife Liz he is on a disciplined and strict diet.
Brother David Koch is no slouch either. David told Avenue magazine (Oct 2014 edition) last year that he usually gets to the office around 9 A.M. and leaves by 7 P.M. and 12 hour days are not unusual for him. It is important to note that Fred Koch (father) had his sons working from an early age. Charles was working on the family ranch at age 6 and David remembers spending his summers on the family farm work from 7:30 A.M. and working until 5:30 P.M. For another summer job David was working 10 hours a day 7 days a week doing manual labor jobs in sometimes in 115 degree heat too.
Remember Charles Koch is 79 years old. How many people who are 79 are still working? Charles Koch could have retired many year ago but he didn't. He continues to put in plenty of hours at Koch Industries. He isn't doing it for money (the man still lives in the same house he built in 1975). My guess is that he works for personal fulfillment and trying to make a difference. John D. Rockefeller retired at age 58 (he lived to be 97 years old), Andrew Carnegie was 66 when he first thought about retiring (he ended up living to be 83), and even Bill Gates last day at Microsoft was when he was in his early 50's. Despite these other titans retiring early Charles Koch continues to show up to the office plowing away and trying to grow Koch Industries. Charles claims in this Forbes article that if he got hit by a truck maybe things would run better.
Brother David Koch is no slouch either. David told Avenue magazine (Oct 2014 edition) last year that he usually gets to the office around 9 A.M. and leaves by 7 P.M. and 12 hour days are not unusual for him. It is important to note that Fred Koch (father) had his sons working from an early age. Charles was working on the family ranch at age 6 and David remembers spending his summers on the family farm work from 7:30 A.M. and working until 5:30 P.M. For another summer job David was working 10 hours a day 7 days a week doing manual labor jobs in sometimes in 115 degree heat too.
Remember Charles Koch is 79 years old. How many people who are 79 are still working? Charles Koch could have retired many year ago but he didn't. He continues to put in plenty of hours at Koch Industries. He isn't doing it for money (the man still lives in the same house he built in 1975). My guess is that he works for personal fulfillment and trying to make a difference. John D. Rockefeller retired at age 58 (he lived to be 97 years old), Andrew Carnegie was 66 when he first thought about retiring (he ended up living to be 83), and even Bill Gates last day at Microsoft was when he was in his early 50's. Despite these other titans retiring early Charles Koch continues to show up to the office plowing away and trying to grow Koch Industries. Charles claims in this Forbes article that if he got hit by a truck maybe things would run better.
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