Reblog – How Anne Scheiber built a fortune?
Anne Scheiber was born in 1893. Her father died when she was very young.
Due to poverty, she began to work in her teen years, saved money and graduated from law school. She joined IRS. IRS is ‘Internal Revenue Service’. It is the income tax department of US government.
Being a Jew and a woman in the early part of last century, she faced a lot of discrimination. She excelled in her work. But during her 23-year career, she never got a promotion due to discrimination. She retired in 1944 with a retirement corpus of $5000.
Though she retired at the age of 50, she lived until the age of 101; passing away in 1995.
Her experience as an IRS auditor, scanning numerous income tax returns, showed her how rich some people became by investing in stocks. So at the age of 51, she became an investor and remained so for next 50 years.
When she died, the five thousand dollars has become $22 million. Inflation adjusted, it is roughly $34 million now. She donated the money to establish a scholarship at Yeshiva University and Albert Einstein School of Medicine to help deserving poor women’s education.
Except for her stockbroker and lawyer, no one knew she was that rich. She led an obscure life. Her entire fortune was built through investing in equity.
This article says:
Her investment strategies were simple, if not old-fashioned. Forget about market highs and lows on any given day, month or year. Reinvest your dividends. Hang tough and seldom sell.
“She was never looking for a quick buck,” said William Fay, her broker at Merrill Lynch. “Her whole idea was to get performance on a long-term basis. She felt over the long run the value would grow.”
This is how she turned $5000 to $22 million.
There were many times over her investing career her stocks declined even 30% or 50%. She stayed invested through many ups and downs, booms and burst of markets. Many times, the economy went into recession and came back. There were war and peace, change of governments, economic and political turmoil; through all these, she stayed with her chosen portfolio. She rarely sold. She bought companies whose business she can understand.
Once in a while, I keep giving such examples to motivate you to stay invested in equities for the long term with patience and discipline; without being carried away by the gyrations of the market and the noise of media.
As Jesse Livermore said, once you buy right, all you need to do is to sit tight. This is very uncommon and difficult. Nobody said it is simple. But by focusing on our behaviour, it is very much possible.
Some of the personalities I write about had some serious flaws as well. In Anne Scheiber case, she was extremely frugal.
I only share with you the investment traits which helped to build a fortune. There is no need for us to worry about other aspects of their life.
If a retired lady can do it in the last century, we can also do, not necessarily build a fortune but attaining a worthy goal of financial independence.
The original post is written by D Muthukrishnan (Muthu) from wisewealthadvisors.com. It is available here.