Let me share with you a story:
Once, there was a man born and raised in Vermont, a state bordering the States and Canada. He had served the US army in Italy during World War ?. After that, this man returned to Vermont and had worked as an attendant and mechanic in a local gas station for 25 years. Then, he took a break for a year, before working as a part-time janitor for a local JC Penney departmental store for 17 years.
In 2014, this man passed on at 92, leaving behind an estate worth US$ 8 million which primarily consists of US stocks.
Of which, he bequeathed US$ 4.8 million to Brattleboro Memorial Hospital, US$ 1.2 million to Brooks Memorial Library and US$ 2.0 million to his 2 stepchildren, caregivers, and friends. Needless to say, all his beneficiaries were stunned by his sizable estate and the generous gifts and contributions to his local community.
His life story was covered by major financial media such as WSJ, CNBC, Business Insider, and the Motley Fool. Since then, this man is widely acknowledged as an investor and a philanthropist. His legacy serves as an inspiration to all investors, not just in the United States, but also to the world.
Who is this man?
His name is Ronald Read, widely known as the US$ 8 million janitor.
So, how did he do it?
How could a simple man amass such great wealth in his lifetime?
Well over here, I’ll share 5 key lessons that we could learn from Ronald Read on matters relating to personal finance and investments. You might be surprised to see that wealth building can be simple and it has to do with our habits over our intelligence, income status, and academic backgrounds.
Lesson #1: A Passion for Continuous Learning
Ronald Read did not graduate from a business school or work in finance. Rather for him, Ronald Read self-taught himself the art of investing by reading financial publications such as Wall Street Journal, Barron’s, and books and materials that he can obtain at the local library. This is inspiring because Ronald Read chose to learn and kept himself updated continuously in investment matters despite him not coming from a finance background. He demonstrated a passion for learning and this leads us to our next lesson, which is:
Lesson #2: Invest in Only What He Understands
Ronald Read left behind a portfolio of 95+ stocks worth US$ 8 million, where he focused on businesses that he could understand and pay hefty dividends. Some of his stockholdings included Wells Fargo, P&G, Colgate, AMEX and JP Morgan. I learnt that Ronald Read would refrain from purchasing stocks which he couldn’t understand. This includes technology companies as he is not a techie. For Read, I also discovered that he had a habit of reinvesting his dividends collected, back into purchasing more dividend-paying stocks. I believe that explains how he can compound his stock wealth to as much as US$ 8 million.
Lesson #3: Patience in Investing, not Trading
I’m not sure when Ronald Read began purchasing stocks. But based on the WSJ, it was recorded that Ronald Read bought shares in 1959. So, it means that Read had 55+ years of stock market experiences. During this period of time, we could find that the US stock market had been through booms and busts and a handful of crises. However, in contrast to popular belief of market timing and prediction of economic events, Ronald Read was known to be a patient man and he stayed invested throughout. His investment successes are not based on market timing, but rather on exercising patience and investing for the long-term.
Lesson #4: Ordinary Income, Extraordinary Wealth
While income status plays a part in wealth building, Ronald Read showed that it is possible for people to achieve extraordinary wealth with ordinary income. He demonstrated that how we manage income after receiving them is as crucial as earning them. Presently, there are high-income earners who fail to build wealth as a result of becoming high spenders themselves. In fact, some have become a lot poorer after receiving a raise in income. But, that is not the case for Read. In his lifetime, he demonstrated that a little frugality and consistent investing over the long-term could do wonders for one’s personal wealth, even if he had made a modest income as a gas station attendant, mechanic and a part-time janitor.
Lesson #5: Giving Back to the Community
Ronald Read gave 75% of his US$ 8 million estate back to his community. Sure, I believe most people, myself included, would have other opinions as to how this wealth could be used, especially if they have it in their lifetimes. But regardless, Ronald Read had demonstrated that he had the foresight to plan his estates. He also understood the purpose of why he needed to build such wealth and that is to give back to his local community. Maybe to him, a penny saved or invested is a penny to be donated to his local hospital and library.
Conclusion: A Tribute to Ronald Read
All in all, Ronald Read remains an inspiration to myself and as well as millions of investors worldwide. He has demonstrated that a modest man can build wealth via consistent learnings, savings and investing in stocks that he understood over the long-term. Thus, obtaining and keeping wealth is more of a habit over one’s intelligence and education.
That is it for now. I wish that you enjoyed my take on Ronald Read.
If you wish to learn more on the art of stock investing, here’s a free training you can attend:
Link: How to Build a Stock Portfolio that Pays Increasing Dividends?
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