A Fascinating Case Study in Applied Financial Principles
You’ve probably never heard of Ronald Read, but he can teach you a great deal about personal financial success. Read is an inspiring case study because, though he never made much money as a gas station attendant, mechanic, or janitor for JC Penney, he died with an estate valued at over $8 million, 1 proving financial success is almost never about how much money you make, and almost always about what you do with the money you make.
Read grew up poor in rural Vermont, and developed a work ethic on the family farm, and by daily walking 8 miles to and from school, an ethic later reinforced while serving in the U.S. Army during World War II. As a working adult after the war, Read maximized his positive household cash flow by living well below his means, in fact, he put feet on the concept of frugality. He used safety pins to hold his coat together to avoid buying a new one, drove unsightly (but reliable) used cars, and parked blocks from work to avoid parking fees. Read’s single indulgence was breakfast daily at Brattleboro Memorial Hospital, the cheapest spot in town, but occasionally someone would offer to pay his bill thinking he lacked the funds, offers Read graciously accepted. It would be an understatement to say Ronald Read plugged financial leaks, and is believed to have lived his life free of debt. Read maintained his earned income source long after he was sufficiently wealthy to retire, which he finally did at age 76. 2
Read’s daily practice was to read the Wall Street Journal. This should have been a dead give-away to his observers, but they were taken away by his appearance. Read allocated his resources wisely by buying the stocks of companies he understood, and by diversifying his investments in great businesses at reasonable prices. He didn’t trade speculative stocks, but rather owned capital-efficient, dividend-paying companies for years, and often for decades, much like Warren Buffet. He examined his investments thoroughly, selling only with a fundamental change in one of his holdings. Read accumulated his wealth slowly over time, compounding returns by reinvesting dividends over many years. When he died at age 92 in 2014, this retired janitor was one of the richest people in town, leaving $1.2 million to the local library, and $4.8 million to the Brattleboro Memorial Hospital. 3
Perhaps Ronald Read should have enjoyed his God-given wealth a bit more than he did, but this humble man greatly exemplified applied financial principles for those eager and willing to learn. Think about it. Shaun
“One pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.” Proverbs 13:7
“It is far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.” ~Warren Buffet
“God loves a cheerful giver.” ~2 Corinthians 9:7
1,2 Doc Eifrig’s Health & Wealth Bulletin, “How Warren Buffet Grew His Wealth”, July 1, 2021
3 Westwood Insights, “The Quiet Millionaire Next Door: How a Humble Janitor Amassed an $8 Million Fortune”
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