When janitor Ronald Read died, his family was shocked to find out that this whole time, he had an $8,000,000 net worth.
As a World War II veteran, Read had served in North Africa, Italy, and the Pacific theater. When he came home, he got a job as a gas station worker and then as a janitor for J.C. Penney.
Read was also married, and had two kids.
How Did He Do It?
Everyone that knew Ronald Read also knew that he was a very frugal person, he drove a used Toyota Yaris, tailored his own coat with safety pins, and chopped his own firewood. He maintained this frugality well up into his 90's.
So you can imagine his children’s surprise to find that he was secretly a multi-millionaire.
But Read’s friend and neighbor Mark Richards knew how he spent his money, “I’m sure if he earned $50 dollars a week, he invested $40 of it.”
The Janitor’s Investing Strategy
Read followed Warren Buffett’s investment strategy and picked stocks to hold for the long term. This required strong willpower to do but he did it his whole life.
Over time his investments grew and eventually they were worth $8 million dollars.
The Wall Street Journal reported that Read “owned over 95 stocks at the time of his death, many of which he had for years if not decades.”
“Among his longtime holdings were blue-chip stalwarts such as Procter & Gamble, J.P. Morgan Chase, General Electric and Dow Chemical. When he died, he also had large stakes in J.M. Smucker, CVS Health and Johnson & Johnson.”
What Did He Do With His Fortune?
Ronald left $6,000,000 to his local library and hospital in Brattleboro, Vermont.
The library invested the money so it may pay dividends for the forseeable future.
And the hospital plans on using the money to update their technology and infrastructure.
What Lessons Can We Learn From Ronald Read?
- Use Time To Your Advantage — Read picked stocks that had a proven track record and that he believed were going to last far beyond his lifetime.
- Reinvest Your Dividends — Read remained frugal even though he could’ve lived his last years lavishly if he wanted to. He remained focused and reinvested his dividends which grew his fortune far beyond anyone would believe a janitor’s salary could be capable of.
- Don’t Speculate — Ronald exclusively bought blue chip stocks, these are stocks that have household names and a reputation for steady growth. He didn’t invest in hot stocks like tech, nor did he invest in crypto-currency.
- Enjoy Your Wealth — Unfortunately one of the lessons we can learn from Ronald is a negative one, he never lived to see the impact his generosity had on his community. Maybe this further displays his humbleness or his investment resolve, but what is the point if you don’t gleam some benefit from your lifelong work?
If you are making more than a janitor makes, there is no reason why you couldn’t save and invest for an even greater net worth than Mr. Read’s, most people in America are making 10 times annually what Read made in a year.
We can all afford to be a little more frugal and a little less materialistic, If everyone did this then we would truly be the land of the free.
Originally published at https://forgefinancialfreedom.com on December 14, 2019.