Do you think you need lots of money to invest in the stock market and make money? The case of Ronald Read shows that you don’t.
Who was Ronald Read?
Ronald Read grew up in Vermont, USA. Furthermore, he served in the US Army during World War II.
Also, from 1945, he worked as a petrol (gas) station attendant and mechanic in Vermont for 25 years.
He retired for a year. Then, he went back to work as a part-time caretaker (janitor) at JC Penney, an American department store chain. He retired from there at age 76.
Philanthropist
Ronald Read died at 92. Following his death, everyone was shocked to learn that he had amassed wealth of $8million (USD). Most of his wealth was in equities. He gave:
- $2m to his two stepchildren, caregivers, and friends.
- $4.8m to Brattleboro Memorial Hospital. The doctors and nurses at the hospital had taken care of him as he became progressively unwell. He died there in 2014.
- $1.2m to Brooks Memorial Library. He used to go to the library to carry out research into the stock market, investing, companies etc.
Lessons learned
How could someone, who reportedly never earned more than $14k/year, amass an $8m fortune? These are the lessons we can learn from Ronald Read.
Live below your means
Ronald Read lived below his means. Additionally, he was well known to live a very frugal life. For example, he wore a safety pin to keep his clothes from falling apart and he drove a very old car.
Invest Regularly in the Stock Market
Moreover, he invested his money regularly in the stock market. He invested in shares of blue-chip companies such as Procter and Gamble, Bank of America and Johnson and Johnson.
Stock market – Dividend reinvesting
Furthermore, to enhance returns, he invested in dividend paying companies. He employed a dividend reinvestment plan (D.R.I.P.). This meant that the dividends were continuously reinvested.
Buy and hold strategy
He adopted a buy-and-hold strategy. Additionally, he also lived and worked a long time. That way time and compound interest were working their magic.
Constantly learning about investing in the stock market
In addition, Ronald Read had a quest for knowledge and improvement which led to lifelong learning. Ronald read the Wall Street Journal and Barrons. Furthermore, he also read books on investing.
Enjoy Life And Invest For The Future
Although Ronald Read amassed a fortune by investing in the stock market, he rarely afforded himself luxuries. A treat for him for example, was going for breakfast to Brattleboro Memorial Hospital’s coffee shop and having one cup of coffee and a muffin.
It’s admirable what Ronald Read achieved.
His strategy sets a textbook example of the power of time and compound interest in investing.
However, I think it’s important to have a good balance between enjoying life and having a comfortable life now and investing for the future.
What lessons could you learn from Ronald Read? Leave a comment in the Comments section below.
Thanks for reading!
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Fascinating story. Yes, textbook example on the power of compound interest growth. Admirable his donation to the library and hospital.
His story is remarkable. His generosity was indeed very admirable.