We don’t often hear about the passing of unassuming, elderly janitors… but when they leave secret multi-million dollar fortunes behind, that tends to get newspapers’ attention.
Ronald Read lived in Vermont his whole life. He worked as a soldier, then a gas station attendant, and then a J.C. Penny janitor. He was well liked but lived a simple life, reportedly working right up until his death last June at the age of 92.
Upon his death, his friends and family were shocked to learn that he’d acquired nearly $8 million in stock holdings and assets over his life — and he left almost all of it to charity.
In reflecting on Read’s incredible story, The Washington Post says there are both lessons to learn and mistakes to avoid. Let’s look at a few items from each of their lists.
What Read Did Right, According to The Washington Post
- Patience. Read held a lot in stocks, but he rarely traded. He owned most of them for many decades.
- Dividends. “Read was not an active trader,” the Post says, but “he was an active buyer. There is a very big difference.” Read preferred stocks that paid regular dividends. He then used those dividend checks to buy more shares of the same companies.
- Diversity. Read owned many different kinds of stocks, but he avoided technology and anything trendy.
- Philanthropy. By designating charitable beneficiaries for his assets, Read was able to significantly reduce his estate’s tax burden. (In fact, in his case, the whole fortune passed tax free).
- Revocable trusts work well. Read had one, and it made life much easier for his beneficiaries.
What Read Did Wrong (By Post Standards)
In praising his financial prudence, the Post is quick to question whether Read really made the most of his life. Friends and family say he did not enjoy his retirement. They wonder whether he might have been happier had he loosened the purse strings and “lived a little,” so to speak. Maybe.
Of course, most of us are driven to do that which we enjoy most. Who’s to say that Read didn’t lead exactly the life he found most fulfilling?
Whatever we might make of his frugal ways, the Post is absolutely right about one thing — we can all learn a lot of lessons here. Financial responsibility pays off. So does planning. Life is short. And above all else, never judge a book by its cover.