Vol. 89: Dad’s accidental fortune

A family mystery solved

       In the evening of his long life, my father, Herman Rottenberg, encountered a pleasant mystery. At an age when most people worry about outliving their money, Dad seemed to have more coming in than going out. Although he had stopped working for a living at the age of 46 (when he sold his knitted wear manufacturing company to devote his life to promoting international good will through folk dancing), Dad’s assets somehow continued to accumulate right up until his death 11 years ago at age 97.

       But how? Most of the proceeds from the sale of his business had gone to create the not-for-profit foundation that supported Dad’s international touring dance company as well as his new base of operations: International House, the New York residence hall for graduate students, where Dad managed its cultural programs for 45 years. (Dad’s escape from the knitted wear rat race is discussed in my recent column #87: Click here.)

       But Dad never drew a salary from his foundation or from International House. So how had he managed to support himself and his family for half a century after he gave up gainful employment?

An assertive accountant

       That question puzzled Dad as much as anyone else. “Where did all this money come from?” he occasionally wondered aloud. When he was 95, I sat down with him to try to solve the mystery.

       The answer, it turned out, could be traced to a sheer accident that occurred decades ago, involving two of Dad’s long-term colleagues: his oldest friend, Herbert Z. Gold; and his accountant— a gruff, shrewd, and very assertive cigar-smoking mentor named Mark J. Goell.

       Dad and Herb Gold were classmates from second grade in Brooklyn through their subsequent years at Brooklyn Ethical Culture School, Boys High School, and college. At Penn, they roomed together in the dorms for four years. They also played together in the Penn band (Dad on the clarinet, Herb on the piccolo). Their interests diverged only in their Penn classes: Dad was a pre-med student dissecting cats and frogs, while Herb studied finance in the Wharton School.

Bad timing

       Their friendship continued after Dad and Herb graduated in 1936, but commercially their lives deviated. Dad fell afoul of the Jewish quotas then in force at most U.S. medical schools and scrambled to find some other occupation. At first, he floundered as a traveling salesman. Then he became a partner in a pen and pencil venture that soon folded. Then, early in 1939, Dad purchased a small firm that was doing $30,000 annual volume importing knitted underwear from Switzerland.

       Talk about bad timing! The outbreak of World War II later that year precluded importing anything from Europe. To salvage his investment, Dad took this struggling company into the sweater field, buying yarn and hiring contractors to turn that yarn into merchandise.

       The same war that had prevented Dad’s firm from importing underwear now generated a demand for clothing to serve an expanding war economy. After two years, Dad brought in his father— previously a manufacturer of ladies’ rayon underwear— as his general manager and half-partner. Soon their erstwhile import company began to manufacture its own merchandise in factories they established in Brooklyn and Valley View, Pa. This was the successful operation that Dad ultimately sold (to his father!) in 1962 for his new life in folk dancing.

Untimely death

       Herb Gold, meanwhile, attended law school and moved from Brooklyn to Long Island, where he went into his father’s home construction business. By the time World War II ended, Herb was running a company ideally positioned to build houses and apartments for the multitudes of servicemen then returning from the war and starting families. He was also well situated to capitalize on the “white flight” stampede to the suburbs that consumed many upper-middle-class New Yorkers throughout the ’50s. Herb’s company won the contract to build the urban redevelopment program for the village of Rockville Centre and played a major role in the creation and growth of the famous “Five Towns” on Long Island’s South Shore.

       But this boom was still far in the future when, around 1950, Herb’s business partner suddenly died of a heart attack. The partner’s widow withdrew her investment, leaving Herb, in his mid-30s, in desperate need of a new partner, preferably someone he knew and trusted.

       Dad’s accountant, the aforementioned cigar-smoking Mark Goell, urged Dad to seize this opportunity. Dad, like Herb then in his mid-30s, replied that he was struggling to build his own business and had no money to invest in Herb’s. But Mark Goell, then in his mid-40s and much more confident and forceful, refused to take no for an answer. “You will do this!” he insisted, as Dad later recalled the conversation.

       So, Dad went into debt to become Herb Gold’s silent partner. And that investment generated a steady stream of income for Dad from that day on, without Dad’s lifting a finger, even after Herb himself died in 2011 at the age of 96. By helping a friend in need, Dad helped himself as well.

A true professional

       What are the lessons here?

       — First, you can never know when fate will surprise you with an unexpected opportunity.

       —Second (as the British philosopher Havelock Ellis observed), the by-product (in this case, Dad’s silent investment in Herb’s concern) is sometimes more important than the product (Dad’s own knitted-wear manufacturing company).

       —Third, loyal friends and advisors whom you trust can make a big difference in your life.

       —Fourth, you don’t need many friends and advisors. One or two good ones will suffice.

       —Fifth, a supportive father can make a big difference, too.

       —Sixth, true professionals (like Mark Goell in this case) serve their clients by providing their best independent judgment in their clients’ behalf, even if they reap no immediate benefit themselves.

       —Seventh, even the friendships you made in second grade may prove valuable later.

Enjoy Dan Rottenberg’s newest book, The Price We Paid: An Oral History of Penn’s Struggle to Join the Ivy League, 1950-55. You can also visit his website at www.danrottenberg.com