There was a news story a couple weeks ago about Sylvia Bloom, a legal secretary from Brooklyn, NY who died at the age of 96 after working at the same law firm for 67 years. Her 67-year run is notable, but friends and family were astounded to learn shortly after her death that she had amassed more than $8 million dollars on a secretary’s salary. Sylvia left some money to relatives and friends, but he bulk of her estate was donated to fund scholarships for needy students.
Reading about Sylvia’s story reminded me of another, similar story from a few years ago. Ronald Read was a janitor who lived frugally and, seemingly, within his means. He passed away at the age of 92 with a fortune of more than $6 million dollars, that he donated to a library and a hospital in his home state of Vermont.
What Sylvia and Ronald both had in common was smart spending and investing habits. Neither one had a crystal ball. What they did have was discipline.
Let’s break down Ronald’s potential investment timeline to see how his discipline paid off in a big way.
1945 - Lets say Ronald started investing in 1945 with $1,000.
Thereafter, he invested $50 a month, every month, until 2014.
1967 - It took Ronald 22 years to grow his investment account to $100,000. That was in 1967.
1965 – 1975 - Between 1965 and 1974, Ronald kept adding $50 per month, but the stock market was fickle and his account had ups and downs. His account stagnated -- it totaled $93k in 1965 and $98k in 1974.
Many people would have been afraid of the market fluctuation and gotten out during those years.
1989 - Ronald stayed the course. By 1989, his investment account was worth $1 million.
1999 - Just ten years later, in 1999, it had grown to $5 million.
2002 - When an economic downturn hit, Ronald’s account shrunk to $3 million in 2002. Many investors were spooked and got of the market at that point.
2007 - Not Ronald. He stayed the course and his account doubled, to $6 million, just five years later in 2007.
2008 - Another downturn followed, and he lost $2.2 million. In 2008, his account had shrunk to $3.8 million. Ronald didn’t flinch.
2014 - He kept investing and in 2014, his account was worth $10 million.
I know most of us don’t have 60+ years to invest at this point, but Ronald’s trajectory illustrates the importance of consistency and of staying the course even in down markets. After the time periods when his portfolio took the biggest hits, the largest gains followed within five years.
Take a look at Ronald’s chart below for some inspiration!
1945 - $1,000
1965 – $93,000
1967 - $100,000
1974 - $98,000
1989 - $1 million
1999 - $5 million
2002 - $3 million
2007 - $6 million
2008 - $3.8 million
2014 – $10 million
The best investment advice you can follow is this: start early and stay consistent. History has proven that even investing small amounts – consistently – and staying the course in down markets, will pay off in the end. Let the market work for you!
So think of Sylvia and Ronald, and get started. If you want some investment advice, please don’t hesitate to contact me.