You have probably never heard of 31 year old Scott Duncan. That's likely because he's not behind the latest tech wonder that everyone is talking about. That doesn't change the fact that he is worth $7 billion after inheriting a quarter of his father's share of boring energy pipeline business Enterprise Products Partners L.P. (EPD 2.44%). That makes him the fourth youngest billionaire under 40 in America. In fact, if it wasn't for Facebook's (FB +1.33%) surging stock price, which is behind the wealth of Mark Zuckerberg, Dustin Moskovitz, and Jan Koum, Scott just might have been the richest billionaire under 40 in America. It goes to show that being a tech geek isn't the only path to wealth these days.
The other pathway to billions
While founding a technology company and then watching its stock soar is the more exciting wealth-building approach, it's neither the only nor the easiest path to building lasting wealth. It's certainly not the path Scott Duncan's family took to amass a multibillion dollar fortune. Instead, the Duncan family's start was a lot humbler than the Harvard dorm room that turned Mark Zuckerberg and Dustin Moskovitz into multibillionaires.
Photo credit: Flickr user Ray Bodden
The Duncan family fortune, which Scott shares equally with his sisters Milane, Dannine, and Randa, all started in 1968 when their father, Dan Duncan, created Enterprise. Dan, the son of a poor Texas farmer, founded the company with $10,000 and two propane trucks. However, he slowly built Enterprise into one of America's largest midstream energy companies.
Dan chose to focus on the part of the energy sector that no one else really cared about. Midstream, which is transporting and processing energy, isn't as exciting as exploring for oil and gas where finding a gusher could lead to big profits. Instead, he built the pipelines that were critical for transporting the these oil and gas gushers to customers. This provided him with steady and reliable income as these pipelines and processing plants were something that energy exploration companies couldn't live without. This allowed Dan to partially share in the successes of exploration without dealing with money losing dry holes and volatile oil and gas prices that have bankrupted quite a few oilmen over the years.
By focusing on the safer side of energy, Dan was able to put all of his attention on building or acquiring additional pipeline, processing and storage assets to support new oil and gas discoveries. Each new piece he added to his system generated more income for the business. Today that vast system he built piece by piece includes 50,000 miles of oil and gas pipelines. That's enough to circle the Earth twice.
Compounding riches
The steady business Dan Duncan built continues to build wealth as the company follows Dan's legacy by adding new energy pipelines and processing plants to support America's growing energy industry. Each new addition generates more income and wealth for the company's owners. In fact, last year alone each of the Duncan heirs saw their net worth climb by over a billion dollars due to a combination of the generous distributions and capital gains enjoyed by owning units of Enterprise Products Partners.
The Duncan family, however, are not the only ones being enriched as the company has also steadily built wealth for its outside owners since Dan Duncan took the company public in 1998. Over the years the value of the company's units and its income distributions have steadily increased.
Neither are expected to stop increasing anytime soon as the company has a robust pipeline of future opportunities thanks to the oil and gas boom in America. That means the company should continue to generate a more wealth for Scott Duncan, his sisters and the company's outside owners for years to come.
Slow and steady path to riches
Dan Duncan slowly built one of the most valuable energy companies in America by focusing on an area that many found to be boring. However, his boring business turned his son into the fourth richest billionaire under 40 in America. It's a feat that only Facebook has been able to match, showing that the boring path to richest works just as well as founding an exciting tech company.
