Ronald Read - the blue collar worker who amassed $8m through frugal living and investing

[Brendan Burgess]

I read about this in the FT

Save lots, spend little . . . how a shop caretaker built an $8m fortune

The story of how one’s wealth can be used to make a positive difference to others

www.ft.com

Jason Butler OCTOBER 24 2019

Ronald Read was born in 1921 in Vermont, US. During his childhood he experienced the Depression in the 1930s and he served in the US army in the second world war.

Read went on to work for 25 years as an attendant and mechanic at a local fuel station, later becoming a caretaker at a department store. He had no children but after marrying in his 40s, became stepfather to his wife’s two children.

He lived a simple and frugal life. He drove an old pick-up truck, wore cheap clothes and lived in the same modest house for 54 years. His hobbies included stamp collecting and chopping wood.

When he died in 2015 at the age of 92, despite never having inherited wealth or earning a large income, Read’s estate was found to be worth $8m. After leaving $2m to his stepchildren and caregivers, he left $4.8m to his local hospital and $1.2m to the town library.

 

[Brendan Burgess]

I would love to see a spreadsheet of how much he invested each year and what shares he bought.

Wikipedia has more information

Investing and frugality[edit source]
Reader's Digest's Juliana LaBianca said Read was "a blue-collar guy with blue-chip smarts".[15] The Wall Street Journal noted that his roughly $2,380 purchase of 39 Pacific Gas and Electric Company shares on January 13, 1959, grew to $10,735 by the time he died.[9] Read bought many shares of The J.M. Smucker Company, CVS Health, and Johnson & Johnson and held for long-term several blue chip companies, including Procter & Gamble, JPMorgan Chase, General Electric, and Dow Chemical Company.[9] He focused on companies that paid generous dividends, which he would reinvest into purchasing additional stock.[9] He did not invest in technology companies and the stock du jour because he concentrated largely on companies he knew about.[9][16] When he died, he had no fewer than 95 stocks that were diversified in many industries such as healthcare, telecommunications, public utilities, rail transport, banks, and consumer goods.[9] Although he owned shares of Lehman Brothers when it went bankrupt in 2008, the bankruptcy minimally affected his returns because his investments were diversified.[16] In a safe deposit box at his bank,[16] Read stored his stock certificates, which when piled together reached five inches high.[9] To remain updated on his investments, he relied on The Wall Street Journal, Barron's, and the public library near him.[9] Read read The Wall Street Journal daily.[4]

His neighbors, family, and friends did not know the scale of the money he had amassed.[17] Read used a safety pin on his fraying khaki denim jacket so he could continue wearing it[7][9] and put on shabby flannel shirts.[13] Read was a regular at a Friendly's where one time a patron paid for his meal because the patron thought Read could not afford the meal.[12][13] He owned a used 2007 Toyota Yaris,[12] which Read's lawyer, Laurie Rowell, said despite his being a millionaire, whenever he visited, he parked in the further parking spaces that did not have parking meters.[4]

Writing in The Boston Globe, Nik DeCosta-Klipa called Read "the epitome of Yankee frugality, according to those who knew him".[12] Despite the limited salary from his employment, he was able to amass a substantial fortune through purchasing equities.[7][18] Barry Ritholtz of The Washington Post praised Read, writing, "How a man of modest means accumulated so much wealth contains exemplary lessons for saving that apply to all of us."[16] He noted that lessons could be learned from Read's experience: "But there is also a cautionary tale about recognizing the value of your finite time here on Earth. Perhaps learning to enjoy life while you can is part of that equation."[16] The Wall Street Journal said that "Besides being a good stock picker, he displayed remarkable frugality and patience—which gave him many years of compounded growth."[9] Referring to Thomas J. Stanley's 1996 book The Millionaire Next Door, Los Angeles Times columnist Michael Hiltzik found Read to be "a Vermont retiree who appeared to be one of Stanley's emblematic secret blue-collar millionaires".[11]





Brendan

 

[Andrew365]

It is a fascinating story, but seems like a 1 in a million type story.

 

[Buddyboy]

"But there is also a cautionary tale about recognizing the value of your finite time here on Earth. Perhaps learning to enjoy life while you can is part of that equation."

That's the bit that sticks out for me.
I suppose if he was happy living frugally. Me, not so much, but still more than some others I know

 

[joe sod]

Did not many irish people do something similar on a much smaller scale, they invested in companies they knew , they did not invest in technology companies, they invested in blue chips that paid a generous dividend, reinvesting the dividends. Unfortunately those companies were the irish banks. An awful lot of wealth that had been built up over many years was wiped out in that crash. In hindsight it was a mistake yet the irish banks had hundreds of years beforehand of stability and increasing wealth and profits.

 

[Laughahalla]

Did not many irish people do something similar on a much smaller scale, they invested in companies they knew , they did not invest in technology companies, they invested in blue chips that paid a generous dividend, reinvesting the dividends. Unfortunately those companies were the irish banks. An awful lot of wealth that had been built up over many years was wiped out in that crash. In hindsight it was a mistake yet the irish banks had hundreds of years beforehand of stability and increasing wealth and profits.

Maybe they were too focused on banking shares . A diversified portfolio would have offered some protection.