I was browsing CanadianMoneyForum.com recently and came across the following thread.
“I saw some commercials saying if you contribute to your TFSA (Roth IRA) every year, in 30 years you will have over one million dollars assuming a ROR in the 4-5% range. One million dollars should churn out $40-50k in tax free income.
Now thinking about this further, does anyone know of someone who got rich this way? I mean start investing a few hundred a week at age 25 and come out with millions at age 60? I personally do not. People who made a fortune got it other ways, by owning a business, getting stock options, or by making a lucky stock or real estate purchase.” ~tygrus
There are many ways to retire wealthy. Owning a business or hitting a home run on a single stock can increase the probability of becoming a millionaire. But to address the question, yes, I do know of someone who became rich simply by investing small amounts of money over many humbling decades. Well, I don’t know him personally. But I know his story. 🙂
Ronald Read, from Brattleboro in Vermont, had $8 million to his name when he died last year at the age of 92. Most of his fortune was donated to a local hospital. After graduating from high school he worked at a gas station for many years. He also served in the military during WWII. Most recently he worked as a janitor for the department store chain JC Penny for 17 years. The secret to his financial success can be attributed to his thrift and his financial acumen.
Stocks he held in his portfolio
“He was unbelievably frugal,” said Ronald’s attorney. The millionaire janitor often wore a flannel shirt and baseball cap, drove around in a used Toyota Yaris (Vitz,) and gave no hint of the size of his fortune. As for his equity portfolio Ronald had invested in large, well known companies such as AT&T, Bank of America, CVS, Deere, GE, and GM. He basically invested in stocks that he knew and understood. Ronald’s investment strategy was very similar to Benjamin Graham’s and Warren Buffett’s, which is to buy and hold profitable companies that have competitive advantages.
“It’s a matter of living a certain way, keeping your lifestyle under control and being committed.” says financial adviser Chris Hogan. “Investors would have to save approximately $300 a month to attain the same $8 million fortune as Read in 65 years, assuming an annual return of 8%,” Hogan told CNBC.
Well that doesn’t sound so hard. 🙂 I think we can all learn a thing or two from Ronald’s approach. My hat goes off to him for keeping his fortune a secret from the public and then donating it to a worthy cause that he believed in. He’s given a new generation of investors like myself the inspiration to pursue financial independence and has proven that it CAN be done. 😀
Random Useless Fact:
A cat’s eye can show its emotional state. A narrow pupil can indicate anger or irritation, while a wide open pupil is indicative of fear or excitement.