William Scott, 52, an assistant vice president in the radiation transport division, is a typical SAIC millionaire. He’s been with the company for 27 of its 28 years. Early on, he saw the power of the company’s internal market — and made several key financial moves to create value over the long haul. Here is his get-rich-slow scheme:
Buy until it hurts.
Scott built his fortune by buying as many SAIC shares as possible, whenever possible — even when he couldn’t afford it. Investing $500 in 1970, for example, meant jeopardizing a down payment on a new house. Those shares are now worth $750,000. Scott even invested money he didn’t have. “Four years into the company, my manager said I’d get two options for every share I purchased. I went to a banker and got $20,000, as much as I could borrow, and bought a bunch of stock.”
Sell, but slowly.
Scott is a strong believer in SAIC’s prospects. But that doesn’t mean he maintains a strict buy-and-hold policy. “I trade nearly every quarter,” he says. “I give stock to my kids and they sell it. I sell some to diversify, or to buy things like a vacation condo. Basically, when the stock goes up, it usually goes up by a big fraction of my salary. I take a small amount of that increase and sell it.”
Accumulation beats compensation.
Too many people emphasize cash compensation when they consider changing jobs, Scott says. But the real action is always with equity. “When your stock grows 15% per year, which we’ve been able to do for a long time, that means the price doubles every five years,” he argues. “So who cares whether someone is getting a bigger bonus than you are? All you have to do is hang in there, keep buying stock, and you’ll pass that person.”