In case you missed it, last week there was a news story about a janitor named Ronald Read from Vermont who recently passed away at the age of 92 with a small fortune – $8 million dollars.
I’ll be honest, when I first read the headline I assumed he had either won the lottery, been given a significant family inheritance earlier on or had a wealthy spouse who passed away. After all, how many people would expect a janitor to obtain such a large wealth? Not me, apparently.
It turns out he obtained almost all of his wealth simply by living frugally and investing in dividend stocks.
Related: 5 Advantages of Dividend Stocks
His family had no idea he had so much money and their only clue was likely his regular subscription to the Wall Street Journal.
Although he passed away, his story can be used as a lesson for many of us. On top of his financial savvy he also donated a large portion of his money to local causes. His donations of $4.8 million to the local hospital and $1.2 to the local library were the biggest they have ever received.
Living Within Your Means
His story is so simple yet so many people tend to overcomplicate things with their money – living within your means is a way of achieving wealth.
He worked at a gas station for nearly 25 years and as a janitor for 20 years, so it’s not like he had a high salary and lots of money to spend.
He drove an older Toyota Yaris that was purchased used, rarely spent money on household gadgets and completed his own home repairs whenever possible.
He wore flannel shirts and enjoyed spending time outdoors. When dining at his favorite local coffee shop, someone had once paid his bill under the assumption he wasn’t able to.
His lawyer noted that when he visited the office he would park far away so that he wouldn’t have to pay for metered parking that was close by.
I think his lifestyle was one of the main contributing factors in how he was able to achieve such wealth, yet so many people (including myself) are left searching for answers. Perhaps he had a second job or created a successful business that he later sold for millions. Nope.
Investing – Simple is Good
Although we probably won’t ever know what investments he held, it is known that Mr. Read liked to keep his investing simple. How simple? After he passed away it was discovered he had stored almost $7 million of investments in a safety deposit box.
He invested in dividend stocks and kept on top of the daily economic news by reading the Wall Street Journal daily.
Experts have estimated that if someone saved $300 per month for 65 years with an 8% return they would end up with about $8.3 million. This is simple but effective and likely the strategy that Mr. Read used.
When it comes to investing, Mr. Read has shown that you don’t need to be an expert or constantly chase the latest investing trend. He invested in blue chip dividend stocks such as AT&T, Bank of America, Deere & Company, GE, General Motors. More importantly – he only invested in names he knew from using their products on a daily basis throughout his life.
Conclusion: we can all learn a thing or two about Mr. Read’s life and how he approached his finances. By keeping things very simple he was able to achieve a significant wealth and was still able to do the things he loved.