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Update: PhilosophicalEconomics did a fantastic post on the math behind Ronald’s portfolio and can you still do it today.
One of my favorite kinds of stories popped up this week. I know it’s been covered in a lot of places, but I wanted to talk about it for a few minutes.
I feel like I just found Mr. Money Mustache‘s long lost uncle. From CNBC (and 50 other places):
A Vermont man who sometimes held his coat together with safety pins and had a long-time habit of foraging for firewood also had a hidden talent for picking stocks — a talent that became public after his death, when he bequeathed $6 million to his local library and hospital.
Ronald Read was born in Dummerston in 1921. He was the first in his family to graduate from high school, walking and hitchhiking about four miles each way from his home to the school in Brattleboro. After military service during World War II, he returned to Brattleboro, where he worked at a service station for 25 years, then worked for 17 years as a janitor at the local J.C. Penney. He spent his free time scavenging for fallen branches for his home wood stove. He drove a second-hand Toyota Yaris.
“Investing and cutting wood, he was good at both of them,” his lawyer Laurie Rowell. “You’d never know the man was a millionaire,” Rowell said. “The last time he came here, he parked far away in a spot where there were no meters so he could save the coins.”
“He only invested in what he knew and what paid dividends. That was important to him,” she said
That’s an amazing couple of paragraphs for a whole variety of reasons. What does it teach us?
The Power of Frugality
Ronald Read is the personification of every frugality/savings/personal finance website on the internet. He never made much money. This guy blows every myth about needing 6 figures to save out of the water. He didn’t do anything fancy. But he kept his expenses extremely low through nothing but common sense and a bit of inconvenience, and it created amazing results.
The Power of Time
A point not mentioned anywhere was Ronald’s age. Had he died at 70, his nest egg would have been substantial, but it would have been vastly smaller that the ultimate amount 22 years later. Compounding is an amazing thing and this exemplifies the simple mathematical fact that getting rich is not hard given enough time. 92 is a hell of a run. Let time do the heavy lifting.
The Power of Dividends
While we don’t know exactly what Ronald was holding, it certainly sounds like he was probably a conservative investor and had a focus on dividends.
The Power of Living how you Want
This is a man who long before 92 could have chosen to do anything he wanted. New cars, better clothes, world travel, and yet he kept on driving his Yaris, chopping his firewood, and eating at his diner. It’s probably not the lifestyle I would have chosen, but clearly this guy was doing exactly what he wanted to do. I admire someone who knows what they like and doesn’t give a damn what anybody else thinks about their choices.
The Beauty of Giving Back
I think it’s awesome that Ronald decided to give at least a huge portion of what he had to the local library and hospital. He’s leaving a legacy that will help thousands of people.
I love Stealth Wealth. I love stories like this one. Hat’s off to Ronald.
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