That first day in the office, I looked at the big computer and telex. It was fascinating to watch as the price changed minute by minute. I’d always been hyperactive and that may have been part of the reason I enjoyed the oil business from that first day. It moved so fast that it kept my mind occupied. My whole life had been a lot like oil prices: in constant flux.
I loved the business.
It not only kept me busy, it helped keep my mind too occupied to think about anything else. The oil business wasn’t complicated. It boiled down to this: buy low and sell high. I understood the markets; just seemed to have a head for it. It was getting all the right permits that could be tricky. Robert walked me through it, teaching me every step of the way. While I missed training his horses. I enjoyed the competitive challenge of the oil industry.
Robert started me at a great salary but every penny went toward our attorney’s fees.I was also getting an education in family law. Every time one thing got settled, Frank filed something else. In family court, you could drag things out for years. And that’s just what he did. Months passed, fading into a year with no end in sight. Even with my salary and the alimony Luann received, our legal fees ate everything. When they overwhelmed us and there wasn’t enough money to pay them, Robert loaned us enough to bail us out.I finally understood what Robert had hinted at all along. Frank was using his money to drag me through court until he broke me financially. He came after me with a three-prong strategy. 1) Use death threats to try and get rid of me 2) threaten Luann with loss of custody to pressure her to get rid of me and 3) tie us up in court until he ruined us financially.
I’d spent 13 years riding rodeos and learned to hyper-focus on winning. As year after year passed with no end in sight, my motives changed. I wasn’t so much fighting for Luann.
I wanted to win. Nothing else was acceptable to me; and I refused to consider losing.
I needed to be as rich .That one thought put all the pieces of the puzzle together.I had to own my own oil company.
It had been one thing to work for an oil tycoon. Running my own company was a different situation. Everything happening in the Middle East was reflected in the price of oil, so I became a news junkie, watching eight screens in my office with multiple remotes. I knew every politician and where they stood, every sheik and all the players in OPEC. I taught myself how to do that and I’d memorized all the area code for all the pipelines and gas terminals. I kept up with my business associates by area codes.Hanco Oil cash flowed in 30 days.I made $500,000 the first month.
For the first time since I’d climbed on the metaphoric bull ride of my life with Luann and Frank, I felt intense relief. I paid all our business bills, personal bills and legal fees – and had some money left over.If there had been such a thing as the Pledge of Allegiance to Money, I would have put my hand over my heart and made it right then. Although I didn’t realize it on a conscious level until years later, at that moment I’d internalized a new truth.Money would solve all life’s problems.
My whole motivation about money changed. If money had been a god, I would have fallen to my knees to worship. In a way, that’s what I did because I put getting money ahead of everything else in my life. Hanco’s sales soared from $500,000 to $5,000,000 a month. By the end of our first year in business, our gross sales were $10,000,000 a month. Our cash flow was so mind boggling that I went on a spending spree. I bought 35 show horses and hired a trainer. We stopped flying commercial, leasing private planes to travel. I bought two of every kind of car I wanted, including two Cadillacs that I never drove.Life, I found, was much easier with money.In my mind, it was the only thing that would make the world go away.Although I was convinced that extreme wealth would solve all my problems, it changed me in a way that nothing else had ever done. Instead of becoming calmer and more peaceful because our financial woes were over, it had the opposite effect on me. In addition to being boastful and proud, I was irritable and on edge. I felt like a bundle of nerves wrapped in skin.
There was a bite in the air one Saturday morning as I watched my trainer work with one of the horses. “Mr. Hansen,” he said, “I was wondering if you could float me a loan. I’ve got this situation…”“If you want money, get it the same way I did!” I snapped.When a panhandler asked for a dollar I barked, “Get a job!”In the office, I didn’t tolerate excuses. “What do you mean that you haven’t got those invoices ready? Whatever I’m paying you is too much! Your incompetence astounds me!” I ranted and raved over everything.I was convinced that if I had enough money, I wouldn’t have to deal with people like D’Angelo. If people gave me a hard time, I put them out of business and never lost a minute’s sleep over it. I took advantage of anyone just to get more money,In those days, the early 1980s, if you made a nickel a barrel on oil, you were doing great.I made 45 cents a barrel.I did it by buying product for 50 cents a gallon. Then I looked for buyers who weren’t paying close attention to the markets, scalping them for a big profit.It didn’t bother me in the least.I felt bad that Luann had lived in mobile homes, starting over twice with nothing. In an attempt to make it up to her, I hired maids, cooks and private teachers for our children. I gave her everything money could buy – except for the man she’d married.
I didn’t know myself anymore.Worse, I didn’t care to.
I never wondered what would happen if the oil bubble burst. Men like Robert, who’d been in the industry for years, had learned to survive through the markets ups and downs. As an owner, this was my first rodeo. Although I understood the business and was good at it, I’d never experienced a major downturn in the price of oil and gas.When dealing in commodities, the price is in constant flux. Those changes have to be factored into your equation. Had I run the business in a smaller way and been happy with a good living instead of extreme wealth, we would have eathered the coming storm.But that’s not the way I did things.Which meant that I was unprepared when the market turned. Older and wiser men knew to avoid debt and keep multiple millions of dollars in reserve.I wasn’t older and wiser.I was young and cocky.I never saw it coming.I’d bought massive amounts of inventory – on credit – when the market turned. It only took two or three weeks before I was upside down. I’d built up a huge cash flow, so although I was losing money at warp speed, it was hard to detect.I felt like I was on a broken elevator in a high rise – free falling so fast my stomach was in my throat.
“Listen,” my brother-in-law said, “I’ve made a huge mistake and we’re in serious trouble. You’re not making any money and you can’t continue on this way.”That evening I read an industry magazine which reported that Exxon was floating checks and the attorney general was determined to stop them. Their plan seemed ingenious to me. They had their account receivables on one coast and their account payable on the other. When they paid their bills, there wasn’t sufficient funds to cover the checks. With receivables on the opposite coast, it gave them time to get money into the account before the check hit the bank.Thus, floating checks.I can do that.I knew it wasn’t a long-term solution but hoped it would buy some time until the market improved. I set up my payables on the east coast and my receivables on the west coast.It worked.I got way out there, floating millions of dollars. Then Bank of America started sending my checks back. One morning I got a call from them asking me to come in for a meeting.I stepped into a plush office where two of the head honchos awaited me. We shook hands and made small talk for a few minutes before getting down to business. The bank president didn’t mince words.“You’re playing the float.” “No,” I said locking eyes with him, “I’m not.”Everyone in the room knew I was lying.
I left the meeting and called my brother-in-law, telling him what they’d said. “Make this look good,” I ordered.“I’m not cooking your books! If this goes down, you’re in big trouble!”
Everything was falling apart. My creditors were getting nervous and asking questions. Now that I finally had the money to keep up with Frank’s legal fees, I couldn’t just watch it all go down the tube. Hanco was hemorrhaging money and I couldn’t pay my bills. I was desperate.One Saturday morning, I called my brother-in-law. “Tell me what to do and I’ll cook the books.”
He heaved a sigh. “I’ll do it.”He cooked the books and signed off on them to Bank of America on Monday. The worst was yet to come, hell-bent and prison bound…