Ronald Read, a lifelong resident of Windham County, Vt., came from humble beginnings. He was the first in his family to graduate high school, having graduated from Brattleboro High School in 1940, and served in North Africa, Italy, and the Pacific Theater during World War II, according to CNBC. After the war, Ronald found work as a gas station attendant and then a janitor at a JC Penney store, and married a woman who had two children.
Ronald was always a frugal man, but unbeknownst to most who knew him — Ronald died a multimillionaire in 2014. He was 92. No one, not even his family and friends, had any idea their local retired janitor was a multimillionaire. He had stock holdings and property valued at almost $8 million, most of which he left to Brattleboro Memorial Hospital and Brooks Memorial Library in Brattleboro, Vermont.
If you’re wondering how Ronald accumulated his wealth, you’re not alone. The story of his philanthropy made national headlines, and his financial discipline is commendable to many. It goes to show just how much control you can have over your finances if you really want to.
Here are three rules to follow to build wealth like Ronald Read:
Live beneath your means
This is the simplest, most powerful way to become wealthy. Though it may not be as easy as it seems.
Ronald Read was known for his frugality. He routinely wore plaid flannel shirts, an old baseball cap, and threadbare winter coats with safety pins keeping them closed and together. He drove a second-hand Toyota Yaris and would park far enough away from his destination to avoid paying parking meter fees, no matter what the weather was like.
In Ronald’s old age — when he wasn’t gathering and chopping his own firewood — one of his few luxuries was eating out for breakfast at his local hospital’s coffee shop, or later at his local Friendly’s restaurant. He would always order the same thing; an English muffin with peanut butter and a cup of coffee. For Ronald, a full life was in the simple joys of life.
Getting to a place where you’re living below your means may take some thoughtful consideration. It could mean altering your current lifestyle, but don’t look at that as a bad thing. Living below your means and not overextending yourself, is one of the most straightforward ways to become wealthy.
If you currently have debt, do what you can to eliminate it so you can start building wealth for yourself. Credit card debt, personal loans, you name it, can likely all be eliminated with discipline and adhering to a debt repayment method like the debt snowball or debt avalanche methods.
Never stop learning
Despite his obvious frugality, Ronald Read subscribed to The Wall Street Journal and Barron’s. He read the Journal every day and Barron’s every week to stay on top of current events and innovations. In his 80s, Ronald got his first library card at the Brooks Memorial Library in Battleboro, VT, and began to borrow books there regularly to further his education, including his knowledge of investing.
"Being a self-made man with his investments, he recognized the transformative nature of a library, what it can do for people," said the library's executive director, Jerry Carbone.
Ronald would also regularly discuss investments with his neighbor — who was also his financial advisor at Wells Fargo — to make sure his investments were sound and on track. His thirst for knowledge paved the way and gave him the knowledge necessary to put a plan in place so he could reach his financial goals.
You can’t expect to be an expert in investing right off the bat, it does take a desire to learn. If you need a place to start where you won’t feel overwhelmed, familiarize yourself with the stock market and brush up on your investment terms. This should give you a solid foundation as you continue to learn and begin to get more involved with investing.
Invest your savings
When you live beneath your means, you’ll have extra money you can save and invest for your future. Ronald practiced these three key behaviors when investing his money:
- He was in it for the long-term: Ronald was a conservative investor who preferred solid blue-chip firms over more risky internet companies and startups. He knew it wasn't right for everyone, but knowing it was right for him, he stuck with it, and it paid off.
- He bought what he knew: Ronald stayed away from technology investments since he didn't follow the technology industry enough to feel it was right for his portfolio. His top five holdings were Wells Fargo, Colgate-Palmolive, Procter & Gamble, American Express, and J.M. Smucker. When you buy stock in companies you know, you can take a lot of the guesswork out of your investment strategy.
- He invested in companies that matched his investment preferences: Ronald favored investing with long-term dividend companies he had known for a long time. He felt they were the most stable, and sticking with dividend-paying companies gave Ronald the opportunity to accumulate more shares by reinvesting his earnings.
Today, there are so many great opportunities to get started in the stock market beyond traditional means of investing. And the more options available to you, the more solid an investment strategy you can create. Stash, for instance, is an online investment platform that opens up the world of investing to anyone with $5 and a smartphone. Stash investment account prices range from $1 per month for the basic account to $9 per month for Stash+, which includes a slew of perks. Stash is a simple and affordable way to build a portfolio of stocks, bonds, and exchange-traded funds (ETFs).
Other platforms, such as Fundrise, give investors a way to diversify their portfolios by investing in real estate. It takes just $500 to get started, and your funds will be spread across a diversified mix of private real estate assets located throughout the United States. There’s no one catch-all portfolio but rather different options for you to choose from that best align with your investment style.
Despite having little formal education and working blue-collar jobs his entire life, Ronald Read carefully saved his money and invested wisely over time to ultimately grow a fortune worth nearly $8 million. While income plays a pivotal role in building wealth, discipline and determination are also crucial for reaching financial goals.
If you want to build wealth like Ronald, look at your finances and consider the changes you can make to start living beneath your means. This should free up enough money to start saving and investing for the future, and you should find that over time you’ll start amassing your own riches. Maybe the next story to break will be about how you built your wealth.