This true story I found in an online journal depicts the magic of compounding and the impact behavior has on our finances.
Grace Groner and Richard Fuscone
Grace Groner was orphaned at age 12. She never married.
She never drove a car. She lived most of her life alone in
a one-bedroom house and worked her whole career as a
secretary. She lived a humble and quiet life. This made the
$7 million she left to charity after her death in 2010 at age
100, all the more confusing. People who knew her asked:
Where did Grace get all that money?
Grace took humble savings from a meager salary and
enjoyed eighty years of hands-off compounding in the stock
market. That was it.
Weeks after Grace died, an unrelated investing story hit
Richard Fuscone, former vice chairman of Merrill Lynch
declared personal bankruptcy, fighting off foreclosure on
two homes, one of which was nearly 20,000 square feet
and had a $66,000 a month mortgage.
Fuscone was the opposite of Grace Groner; educated at Harvard
and University of Chicago, he became so successful in the
investment industry that he retired in his 40s to “pursue
personal and charitable interests.”
But heavy borrowing
and illiquid investments did him in. The same year Grace
Groner left a veritable fortune to charity, Richard filed for
It is the study of how people behave with money.
And behaviour is hard to teach.
Random Useless Fact:
The first calculator was invented in the mid 17th century.