The Multimillionaire Next Door

By Matthew Gutierrez · October 13, 2024

*LinkedIn newsletter is posted at a one-day delay.

Sign up for the email version to stay most up-to-date: https://westudymarkets.beehiiv.com/subscribe

In India, breast cancer is a leading cause of death for women.

But an initiative that teaches blind women how to detect the disease in its early stages is providing them with meaningful employment and addressing a critical need in preventative care. “I see my disability as a positive,” one of the blind women said .

Today, we'll discuss another inspiring story: Ronald Read, a janitor who amassed an $8 million fortune.

All this, and more, in just 4 minutes to read.

— Matthew

Quote of the Day

"The best way to treat obstacles is to use them as stepping-stones. Laugh at them, tread on them, and let them lead you to something better.”

— Enid Blyton

From Our Friends at Finance Buzz

If you have outstanding credit card debt, getting a new 0% intro APR credit card could help ease the pressure while you pay down your balances.

Our credit card experts identified top credit cards perfect for anyone looking to pay down debt and not add to it.

Get Started!

What Else We’re Into

?? WATCH: How Kodak invented the snapshot.

?? LISTEN:?Technology: The economic dynamite featuring Mark Mills.

?? READ: Paul Graham on when to do what you love.

Trivia

The U.S. Federal deficit topped what figure in the latest fiscal year, driven by higher spending on interest and programs for older Americans?

• $1.2 trillion
• $1.5 trillion
• $1.8 trillion
• $2.3 trillion

The Inspiring Story of Ronald Read

Amassing a fortune

Ronald Read, a gas station attendant in small-town Vermont, quietly amassed a fortune worth $8 million. It’s a powerful lesson in frugality and the powerful effects of compounding.?

When Read, who lived in Battleboro, Vermont, died in 2014 at age 92, he left about $8 million to charity. He displayed incredible patience and left most of his money to a hospital and library, so his $8 million estate was not subject to federal estate tax. (Part of his library donation allowed the library to extend its hours and renovate its 50-year-old building.)

After working at a gas station, he lived modestly as a maintenance worker and janitor at a JCPenney.?Read left a five-inch-thick stack of stock certificates in a safe deposit box. He owned at least 95 stocks that he had held for (mostly) decades.?

“Not only did he refuse to flaunt his wealth; his estate included a 2007 Toyota Yaris valued at $5,000, but his closest friends and family members did not know he had even a tiny sliver of the fortune he left behind,” Howard Weiss-Tisman reported in the Brattleboro Reformer.

He owned stocks in railroads, utilities, banks, healthcare, and consumer products, avoiding tech companies. He usually bought shares of companies he knew well that paid dividends. He'd usually buy more shares once his dividend checks arrived in the mail. And he had big holdings in Procter and Gamble, J.P. Morgan Chase, General Electric, and Johnson and Johnson.?

As reported by CNBC, Read’s attorney said: “He only invested in what he knew and what paid dividends.”

Like any great investor, he made mistakes. His portfolio included shares of Lehman Brothers, which collapsed in 2008. But he diversified so that no one or two failures would fundamentally impact his returns. He read The Wall Street Journal, studied stocks at the local library, and chatted with neighbors about investing.

His family was “tremendously surprised” when they learned of his wealth.?

“He was a hard worker, but I don’t think anybody had an idea that he was a multimillionaire,” Read’s stepson Phillip Brown told the Brattleboro Reformer in 2015.

Keeping it simple

Born in 1921, Read was the first in his family to graduate from high school. During World War II, he served in the U.S. military in North Africa, Italy, and the Pacific. Then he came home, married, and had two children. Among his frugal habits, he drove old cars and used safety pins to hold his coat together. A lifelong Vermonter, he cut his own firewood, even in his 90s.?

“I’m sure if he earned $50 in a week, he probably invested $40 of it,” said friend and neighbor Mark Richards.

Friends noted that he saved nearly 80% of his income starting sometime in his mid- or late 20s. According to reports, he invested roughly $300 per month at an 8% return for over 65 years.?

Lessons for all

There are a few investing lessons here other than patience. Read rarely traded or sold stocks. Because he kept physical certificates, selling shares was a process. He’d need to...