"Then around 8 o'clock that night, Al called me and told me the bidding had stopped at US$800,000. I calculated that if I had stayed in my job -- though I had recently quit the publishing position -- until I was 65, the amount of money I would have earned was about the same as the amount of money that phone call gave me."
That night, Follett did what he always did when he sold a book: he bought champagne. The ritual began with his first book deal, because "I had a check in my hand for ?150 that I hadn't budgeted for and a bottle of champagne cost ?5." Now, he said, he has champagne every night.
The book sold by the cartload in the US, and still sells 100,000 copies a year around the world, he estimated. Within a year, Follett had saved US$1 million. He opened a bank account in Switzerland and soon moved to France, where the taxes and the elements were less oppressive than in England.
"Suddenly, you make all this money," Follett said. "My immediate thought was the south of France. I had been there. I liked it. I liked sunny weather."
The Folletts and their two children moved to Grasse. Though he had an account at a Swiss bank, generally he did not do much investing. After two or three years, however, he missed England, so he returned despite the heavy tax burden.
Focus on real estate
Guided by a conservative investing bent, Follett estimates that about half of his fortune is in real estate. His three homes include a town house, built in 1732, in the Soho district of London. Then there is a nine-bedroom former rectory, complete with a tunnel from the living room to an indoor swimming pool, in Stevenage, the constituency north of London that Barbara Follett represents. A two-bedroom house on Antigua in the Caribbean has its own pool and tennis court. Most of the rest of his assets are in highly liquid investments.
Though his bankers make some equity investments -- which he declines to name -- Follett generally dismisses the market. (He does, however, have a healthy respect for people who run companies well. "That is not luck at all," he said. "It is character, brains, determination and imagination." Ross Perot, he said, "did not get this rich because he knows computers; he got rich because he can get other people to work their socks off for him.")
In investing, it is not the risk that bothers Follett. "It is all that effort I made on the book going up in smoke," he said. "That's what I hate."
Protecting his assets, rather than scoring big, was also the reason he took to hedging. In the 1980s and early 1990s, when most of his income was in dollars, he hedged, he said, to help reduce the risk that a slump in the dollar would mean trading it for fewer pounds. Now, he said, his royalty income comes in so many currencies that they effectively hedge one another.
The author says that after all these years of work, "I kind of feel entitled" to the financial rewards.
Besides, he said, he is having too much fun to hide it. "How could you hide it?" he asked.
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