Reselling seems to be an alternative for those who cannot afford a dedicated server. And since, I am very well off. I figured I would skip over the entire reselling fiasco, and equip my hosting company with dedicated server right off the bat.
However, I am unexperienced in operating a server.

Hence my questions.
What daily tasks are involved with running your own dedicated server?
What precautions can I take, to avoid hacking; and or any other client nightmares?
Is the uptime dependent on my work and performance on the server? Or is the place I am getting the dedicated server from, responsible?
Would I have to install mysql, cgi, ect ect? Or do servers come already equipped?
WHM and control panel for my clients, does this cost extra? If so, where do I buy it from?

That is about it for now. Thanks greatly for your time.
Regards.

Michael, I highly suggest you consider reselling and learn while you are reselling. When you are ready, you can step up to a server. Some hosts make this transition easier than others, so you may want to keep that in mind, and ask this question, when looking for accounts.

A second possibility, is to either hire someone to manage the server or lease a fully managed server. Although this is generally more expensive than an un-managed server, at least you know that someone with experience is handling the basics.

What you are basically asking is, "Hey, I don't know how to drive a car and haven't gotten my license yet, and I want to take a bus load of children on a vacation. Will I need to buy gas and would it help if I put tires on the bus?"

Now, don't take this the wrong way. All this tells you is that you should hire a bus driver to be safe and build up your knowledge of running a server. That's a good thing.

Besides the basics, there are many other things you need to know (some very technical and seemingly trivial things, until that thing becomes a major issue).

If I were you, I'd look for a nice, solid reserller account with a 'ramp up program' to a dedicated server (at the right time).

I have looked at some resellers, such as MCHost.
And with 16 GB of BW and 1 GIG of space, I can only cator to smaller sites who want 20 MB plans for $4 a pop.

Meanwhile, I want the big fish. The sites one step below a dedicated server. Who pay $20+ a month.
As these webmasters are usually much more experienced.And there is much more profit.

Chicken, or anyone else, would Co-Location suit me needs?
I have heard they take care of everything for you. Is this true?

Generally colocation means that you pick out and buy or build a server yourself and ship it to a data center. You are often responsible for rackspace and transfer, sometimes additional fees, but more importantly, you are responsible for that server and the hardware. If a HD dies, you buy a new one and pay someone to install it.

I don't think this is the direction you should head.

Ask yourself this... Why would an experienced webmaster (big fish) who is paying a premium for hosting want to be hosted on a server run by an unexperienced admin, who is unfamiliar with even the daily tasks involved with running a dedicated server? I realize you want to avoid the 'reselling fiasco' however it would be in your best interest (and the best interest of your clients) to avoid the 'dedicated server fiasco' as well.

If you truly have no interest in a reseller account, then look into a fully managed, backed up, secured, monitored solution. It won't be cheap, and personally I don't feel this is how you should start out.

You say you are well off, but aside from having money, what is your background? Why do you want to do this? Have you thought about how you are going to handle support for these clients?

It just sounds to me that you want to open up an auto repair shop, yet you have no experience in the automotive industry, nor knowledge of cars or fixing them. If all you can do when your first customer walks in is kick the tires, the road ahead isn't going to be smooth. Top it off, you aren't interested in working on your friend's cars, you want to sign up Hertz Rental and service their fleet.

I don't want to kill your dreams, but you need help in this and you don't seem to personally have the knowledge to do what you'd like to do. Maybe some of the hosts on the forum will email you some solutions and try to get you going in the right direction.