Entrepreneurs

How living ‘paycheck to paycheck’ helped teach this billionaire to be successful

Ken Langone is one of four co-founders of Home Depot and, at 82 years old, is worth $3.5 billion, according to Forbes.

But Langone's current wealth belies his humble beginning. Growing up in Long Island, New York, Langone's parents lived from "paycheck to paycheck," he tells CNBC Make It.

Having limited financial resources and working multiple jobs as a young person gave Langone skills and perspective that the businessman drew upon later in life to become successful, he says.

"I started working when I was 11 or 12," Langone tells CNBC Make It. "One of the first things I did was sell some Christmas wreaths. And also collected [scrap] cardboard because I found out that it was worth some money."

By the time he was 14 or 15, "I delivered newspapers. I worked in a butcher shop. I cut lawns. I caddied. Those are the things I did," Langone recalls.

"And then I started working in construction at 16 and 17."

Ken Langone
Olivia Michael | CNBC
Ken Langone

Langone's motivation to hustle was simple: "I wanted to make money! My dad was a plumber, my mother worked in the school cafeteria. Money wasn't plentiful. My parents lived from paycheck to paycheck," says the now multi-billionaire.

His parents covered the essentials, but there weren't a lot of extras. "We had a nice little house — it was warm in the winter and hot in the summer because there was no air conditioning. We had plenty of good food. But I just made my mind up that I wanted to have some money, and I was willing to work, and I was willing to work hard," Langone says.

Those experiences paid off in more than just spending money.

"I developed a work ethic that I think has stood me in good stead these many years," says Langone.

Ken Langone with his mom and dad when he graduated from Bucknell in June, 1957.
Photo courtesy Ken Langone
Ken Langone with his mom and dad when he graduated from Bucknell in June, 1957.

Making money was rewarding and provided autonomy.

"I always felt good if I had a buck in my pocket. I felt some some degree of independence and accomplishment," says Langone.

He saved some of what he earned and spent some. He would go to the movies and buy fashionable clothes. While working at the butcher shop, he'd bring home meat for his family and have the cost deducted from his pay.

"I wasn't foolish with my money but on the other hand, I enjoyed it," he says.

In addition to developing his work ethic, Langone says he learned how to read people.

"The thing I learned in all these different jobs was to try and study people, especially as a caddie," says Langone.

"When you're a caddie and you're carrying a guy's bag, it's amazing the number of people you caddie for that when they have a bad shot they don't blame you, and then there's some people that blame the caddie even though the caddie had nothing to do with a bad shot," says Langone.

"And so I learned early on to try to size people up, look at their mannerisms, listen to the way they talk. And it was very, very helpful to me in later years when much of what I was doing depended on my judgment in other people," Langone says.

In part, Langone has his mom to thank. She only reached the seventh grade herself, but wanted more for her son.

"We used to go to my grandparents' for lunch on Sunday afternoons," Langone recalls of his childhood. To get to Port Washington where they lived, his family would have to drive from their poor neighborhood through the rich part of town.

"We used to drive through a wealthy section called Roslyn Estates. And every Sunday when we drive through Roslyn estates, my mother almost instinctively, would say, 'Would you like to live here someday, Kenneth?' I said, 'Yes, mom, I would.' She said, 'Well, if you want to live here someday, you've got to work hard; you've got to get an education.'

"And I still think those two things hold sway," says Langone. You've got to "learn as much as you can and work like hell."

Indeed, Langone graduated from Bucknell University and earned an MBA from the New York University Stern School of Business. Langone worked on Wall Street and as a financier and entrepreneur before he joined Bernie Marcus, Arthur Blank and Pat Farrah to launch Home Depot.

Ken Langone with his father in 1957. Photo courtesy: Ken Langone

The first Home Depot store opened in May of 1979 in Atlanta. Despite a slow start — the founders couldn't afford enough merchandise to fill the store so they had to stock the shelves with empty boxes to give the illusion of being flush — it didn't take long for Home Depot to become successful. The home improvement store chain went public in 1981.

Now, there are more than 2,200 Home Depot stores around the world and the market capitalization of Home Depot is more than $230 billion.

Today, says Langone, "I still love my work and now frankly, if I had to pay to go to work, I would. That's how much I love my work."

Langone's journey from a hardscrabble childhood to billionaire, which he detailed in his new book "I Love Capitalism!", also taught him the importance of luck, the Home Depot co-founder says.

"You need some breaks," says Langone, who will not refer to himself as "self-made" in deference to the countless people who helped him along the way.

"You know I often say, if I have a chance to choose between smart and lucky, it's lucky every time. Not saying that smart doesn't help — it does help — but so many times in life you have serendipitous events that go on and it changes your life."

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