Ronald Read's Investment Plan
Janitor bequeaths millions to library, hospital
Excerpt:
Perhaps the only clue that Ronald Read, a Vermont gas station attendant and janitor who died last year at age 92, had been quietly amassing an $8 million fortune was his habit of reading the Wall Street Journal, his friends and family say. It was not until last week that the residents of Brattleboro would discover Read's little secret. That's when the local library and hospital received the bulk of his estate, built up over the years with savvy stock picks."Investing and cutting wood, he was good at both of them," his lawyer Laurie Rowell said on Wednesday, noting that he read the Journal every day. Most of those who knew Read, described as a frugal and extremely private person, were aware that he could handle an axe. But next to no one knew how well he was handling his financial portfolio.Here's how a janitor amassed an $8M fortune
Excerpt:
Ronald Read, a Vermont gas station attendant and janitor, invested in recognizable names when he amassed an $8 million fortune, according to his attorney. A large part of that fortune was later bequeathed to an area library and hospital after his death, stunning a community that had no idea about his wealth. Most of Read's investments were found in a safe deposit box, Read's attorney, Laurie Rowell, told CNBC. Those investments included AT&T (NYSE:T), Bank of America (BAC), CVS (CVS), Deere (DE), GE (GE)and General Motors (GM). "He only invested in what he knew and what paid dividends. That was important to him," she said in an interview with " Closing Bell ." Read, who died at 92, has been described as quiet and frugal. No one appeared to have any idea that he was so wealthy, including his stepchildren, Rowell said. Read More Janitor bequeaths millions to library, hospital Financial expert Chris Hogan, a strategist with Ramsey Solutions, applauded Read's diligence and believes others can follow his example. "It's a matter of living a certain way, keeping your lifestyle under control and being committed," he said. For example, to reach Read's $8 million fortune, Hogan calculated that investors would have to invest about $300 a month at an 8 percent interest rate over 65 years.Comments (summing it up):
- Living simply
- Investing consistently
- Investing cautiously (low risk dividend stocks)
- Also helping ... living a long life!
Route to an $8 Million Portfolio Started With Frugal Living - After Ronald Read’s death, friends were surprised by his wealth. His top stockholdings included Wells Fargo, Procter & Gamble and Colgate-Palmolive:
ReplyDelete“If he could save a penny, he would,” says Bridget Bokum, a senior client associate at the Wells Fargo Advisors office in Brattleboro, and who is assisting with his estate.
When he died, Mr. Read left behind a five-inch-thick stack of stock certificates in a safe-deposit box. The shares represented the bulk of his estate, and his executor and Wells Fargo still are working to determine their exact worth.
“We all knew he was into the stock market, but not to this extent,” says Claire Johns, who worked with Mr. Read at J.C. Penney and is executor of his estate.
Mr. Read owned at least 95 stocks at the time of his death, many of which he had held for years, if not decades. They were spread across a variety of sectors, including railroads, utility companies, banks, health care, telecom and consumer products. He avoided technology stocks.
Friends say Mr. Read typically bought shares of companies he was familiar with and those that paid out hefty dividends. When dividend checks came in the mail, he plowed the money back into more shares, Ms. Bokum says.
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.
Physically holding stock certificates became passé for investors more than a decade ago, but Mr. Read held onto his.
In recent years, as investing shifted to electronic platforms, firms began imposing fees for ordering the actual certificates. So Mr. Read turned to a more thrifty option, agreeing to have his purchases held by the official record-keeper for share ownership—known as a transfer agent—that each public company employs. That likely saved him from $25 to several hundred dollars per transaction, says Peter Duggan, a senior vice president at transfer agent Computershare.
By buying shares this way, he likely also paid low fees, even compared with those charged now by many online brokerages for do-it-yourself investors. The average fee for buying shares in a so-called direct-stock purchase program is about $3 at Computershare, Mr. Duggan says.