Rex Maughan: Forever Living Products founder turns to philanthropy

December 05, 2007

He's a billionaire entrepreneur with operations in 125 countries, a host of philanthropic projects worldwide and frequent flyer miles to match, yet longtime Arizonan Rex Maughan is a surprisingly simple man.


He reacted with characteristic humility recently when he learned that his alma mater, the W. P. Carey School of Business, had named him to its "Alumni Hall of Fame" for 2007.


The founder, chairman, president and CEO of Forever Living Products, a Scottsdale-based line of natural health and cosmetic aides, said of the honor, "I am proud of ASU, and of being a graduate. But I don't feel like I've done enough to get into the Hall of Fame," said Maughan.


As for the label "billionaire businessman," Maughan jokes, "It makes me feel funny. I don't know how to write that many zeroes!" But the Forever Living empire is vast. Founded in 1978 to make products from the aloe vera plant, Forever Living at its foundation is a multi-level marketing business. The company has grown from its roots, however, and now operates resorts as well as marketing cosmetics. And Maughan himself is involved day to day in the operations of his far-flung holdings.



An entrepreneur from real estate to health products


Maughan grew up on a ranch in Soda Springs, Idaho, surrounded by a tight-knit Mormon family. His life revolved around plant and harvest cycles, horseback riding and friends -- one of whom is his right-hand man in business today. Ranch life could be hard. During the lean times, he recalled layering cardboard over the holes in his boot soles "so the alfalfa stems didn't poke through." He never forgot those worrisome moments; in fact, as an adult, he funneled that vulnerability into building schools and digging wells in needy communities.


Similarly, the scruffy ranch kid's love of the outdoors evolved into environmental activism in the U.S. and abroad. He became involved with the U.S. parks system, collaborating on thorny public-land and cattle-grazing issues. In Samoa, when a Japanese company began logging a rainforest, he persuaded tribal chiefs -- Maughan speaks Samoan -- to cancel the contract and turn the acreage into a protected park; in return, he built a modern school to replace the village's thatch-roofed hut, and hired certified teachers.


Maughan began investing in land while still working as an accountant in the early 1960's, buying a few acres here, a small ranch there. Then, tiring of accounting, he joined Del Webb, builder of retirement communities, and spent the next 13 years working his way up while steadily adding to his own real estate and ranching investments.


He founded Forever Living Products in a two-room office. The company initially made lotions from the aloe vera plant, a desert succulent known for its healing properties. The product line has grown and diversified, now encompassing 180 health and beauty aides ranging from vitamins to aloe detergent, from spring water to lip gloss, from protein powder to bee pollen. Since aloe vera is still a key ingredient in many of Forever Living products, Maughan segued into aloe cultivation and processing.


He branched into the resort business in 1981, under the umbrella of a sister company, Forever Resorts. "I like traveling and exploring places, and I wanted to have fun while I worked, so it made sense," Maughan explains. "When someone asks, 'what did you do this week?' I am likely to say, 'oh, I dedicated a new office building in Vietnam and then we went to Lake Powell to check out the new boat engines and choose between a few types of water skis.' Which means I had to tour ancient ruins in a foreign country, then go water skiing and boating … it's my job!"


Maughan began buying resorts with sagging profits, sending in turnaround teams and coaxing new revenue out of them. State authorities asked him to take over boat and marina concessions at several national parks, too. Today, Forever Resorts has 70 sites, including 25 game parks in South Africa (where he's breeding extinction-threatened sable antelopes), the Southfork Ranch featured in the '70s television show, Dallas, even a renovated castle in Budapest.


His sprawling empire has grown too large to visit each country in which Forever Living and Forever Resorts operate, a policy he stuck to for many years, partly because he liked meeting distributors (there are nine million of them). But Maughan says he still gets a keen sense of satisfaction from talking "to people who have been using our products and have better health as a result, and people who sell our products, can afford a better lifestyle, and end up giving back to their own communities. It's nice to see people move beyond worrying over getting enough food to eat and putting a roof over their heads."



Lessons from the trenches


Along the way, he's taken a few knocks and learned some hard-won wisdom. He steers clear of consistently negative people; only gives advice when asked specifically for help; does not lend money -- "it's the fastest way to end a friendship" -- avoids workplace favoritism and evaluates potential employees for honesty and integrity as much as for their technical or business credentials. He's fond of home-spun metaphors, likening a sunny attitude to "sticking a finger in honey. You can't do it without getting a little honey on your finger, and then everything you touch after that is a bit sticky."


Asked why he's left competitors in the dust, Maughan is succinct. Undercapitalization and dishonest business practices doom most of the companies he's seen falter. Failing to cover expenses from revenues and "robbing Peter while thinking they can pay Paul down the road" is the most common offense, he adds.


He's made his mistakes, including collaborating for many years with a rancher who lacked the appropriate skill set and wasn't willing to change in order to make a profit. "Eventually I had to tell him that I couldn't afford to have him around, as I didn't have a big enough money tree to satisfy all of his problems," Maughan explains. Public records indicate a bitter lawsuit ensued, but was dismissed by a judge.


If he had to start all over again today, and Forever Living was out of the picture, he'd find a business niche related to archeology, where he could explore past cultures, poke around antiquities and haunt museums, all while on the payroll. That's why Maughan hunts for rundown historical buildings when expanding Forever Living offices around the world. He researches the structure's history, has it professionally restored and then equipped for modern-day business operations. Occasionally he falls in love with a building, renovates it and opens it to the public as a museum, as he did with the Robert Louis Stevenson home in Samoa.


A second back-up career would be mining engineering, he admits. Maughan is fascinated by geology, and dabbles in mining -- gold in Alaska, sapphires in Montana, silver in Nevada. "Big stones, natural resources -- it's all so interesting," he says.


He doesn't plan on retiring -- ever. But Maughan says he's also a vastly different person than he was 15 years ago, when his inner drive morphed from profit-chasing to solving social and environmental problems. "Nowadays, I spend more time working on projects to help people who have less. That's what is fun, for me," he adds.



Bottom Line:


  • Maughan is a corporate guinea pig, personally testing all new Forever Living health products, from aloe vera juice to weight-loss aides, before giving the green light to marketing.
  • Despite the billionaire designation and the business and philanthropic awards, he "is still the same guy I was when working three jobs to get through college. I do about the same thing today I've always done."
  • Maughan flies business class when traveling outside of the country, but eschews the "rich food and alcohol" served in first-class.
  • He likes fancy wheels. The Jeep Wrangler is for everyday running around, but there's a Hummer and a Bentley in his Scottsdale garage, along with wife Ruth's sporty Aston Martin.