How To Build An $8 Million Bank Account, While Earning Less Than $30,000 A Year At A Job

Everyone waited solemnly as the law firm representatives slowly opened the safety deposit box. Nobody expected it to contain much.

After all, he was just a part-time janitor for most of his working career.

And according to, the average salary for a janitor is $26,000. A honest pay for honest work for sure, but a far cry from the six digit salaries so common with other careers.

There might be something, albeit small, in the safety deposit box that contained his estate documents, thought the representatives. After all, Ronald was frugal.

But they were about to find out that not only was Ronald very frugal, he was very smart.

As the top came off the box, they could tell that it was completely packed with something. What was it?

Letters? No.

Old photos? Nope.

A diary perhaps? No again.

The box was packed tight with…stock certificates. When the final tally was made, Ronald Read, the former part-time janitor, was worth $8 million.

Read served in the Army during World War II and then worked as a mechanic with his brother for many years. After his brother’s garage was sold, Read could have taken some time to relax, but he apparently did not take to well to the idea of sitting around and doing nothing.  He eventually went to work as a part-time janitor at J.C. Penney. He finally retired in 1997 and passed away last summer.

And although his jobs never had big salaries, Read enjoyed investing in the stock market, always putting his money into conservative, dividend producing stocks.

He lived modestly, and hated to spend money or see anything go to waste. His attorney said that he wouldn’t even park close to her office because he didn’t want to pay for parking!

I know that some of you may be quick to brush-off this story right here, as some form of an anomaly. As something that is not realistic for the average person because you think it involves extreme frugality.

And if you do, you’ll miss the important lessons of what this person did and how you too can create a multi-million dollar bank account. Because as frugal as Read appeared to be, that’s only one piece of the puzzle that led to his success.

As I read Read’s story, an all too familiar narrative appeared. A narrative that seems to show up in many a person’s story who is successful at building large sums of money. Indeed, I recognized many parts of my own story.

And here are the components of that narrative:

They kept at it: Read could have taken time to relax after his brother’s garage was sold, but he did not. He didn’t take to the sedentary life too well. He knew that there are no lazy paths to anywhere worth going. There is no substitute for just doing the work. As Einstein once said, “Genius is 1% talent and 99% effort.” To be a runner you must run. You must write to be a writer. You must actively attend to your relationships if you want them to flourish.  And if you want a big bank account, you must do the work to make it grow. The decision to settle for mediocrity is a life killer. If you settle for just anything, you’ll never know what you’re truly worthy of. There is ample time for you to be who you want to be. Despite the struggles that you might be facing, never give up on yourself. Don’t just take the easy way out and settle for less than what you know you are capable of.  Keep at it until you’ve reached the goal line.

They are frugal: I know most people hate this topic because they associate it with deprivation. I want to be clear about something here: I don’t view “spending less” as a goal all on its own. To me, spending less is really just one part of an overall philosophy of building wealth. I see frugality as a two-step process: (1) Deciding what matters to you and what doesn’t. What kind of life are you trying to build? Which things bring you genuine happiness and which don’t? (2) Purposefully using your money on the things you value and that will help you reach your goals. Over time, those are at successful with money see frugality less as deprivation and more as a means to an end. Spending less means that they have more investment capital, more “money seeds” to go plant and earn even more dollars. Spending less isn’t the end point, it’s the starting point. When you do it right, you make it easier to reach your financial goals, create a more secure life for your family, and free up more of your time to spend on things you enjoy. What’s not to like about that? Being frugal is not about deprivation, it’s about freedom.

They invest early and keep on investing throughout their lives: If you’re young, you may not think you need to open a retirement account. You probably think it’s easier to worry about it five years from now. Or ten. You’re wrong. No matter what your age, now is the time to begin saving for retirement. If saving is the key to wealth, then time is the hand that turns the key to unlock the door. As they say, “Procrastination is the assassin of opportunity.” Every year you put off investing makes your ultimate retirement goals more difficult to achieve. Through the miracle of compound interest, even modest returns can generate real wealth given enough time. In the short-term, compounding doesn’t reveal it’s benefits, but over the course of twenty or thirty years you will be amazed at what can be built. It is often said that compound interest is the eighth wonder of the world and Mr. Read’s fortune could have been made by investing as little as $300 per month at an 8 percent return for 65 years. Start now, don’t wait.

They invest conservatively: It appears that Mr. Read had a predilection for blue chip, dividend-paying U.S. companies. His top holdings included such conservative stalwarts as Wells Fargo, Procter & Gamble, Colgate-Palmolive, American Express, J.M. Smucker and Johnson & Johnson. Hardly the rocket ride, hair-on-fire type of investments that are in some portfolios of those trying to get rich quick. But as I said in a previous post, aiming for returns that are in the stratosphere can cause someone to perform unnatural acts with their money. As they chase today’s rockets to the moon, they become sadly disappointed when those rockets return to earth with a thud. I know that conservative investments are boring. I know that they take longer. But I also know this – buying stock in solid, conservative companies is exactly how I built my wealth. No, it’s not a sexy way to invest but lying awake at night worried sick about a risky investment that could lose all your money is not sexy either.

They have a long-term investment horizon: Judging by his 56-year investment in PG&E, it does not appear that Mr. Read traded very often. This is a marked contrast to many investors who shoot themselves in the foot by chasing “hot” investments or “timing” the market. As Buffett so aptly puts, “I would not have a three-year test as to performance, I would buy a group of high-quality companies and I would keep doing that year after year for 30 or 40 years. I guarantee you that you’ll do very well.” I realize that it’s much more preferable to get rich quick than slow. But in wealth building, I’ve found that slow and steady wins the race. Frequent trading has been shown to be the best way to transfer your wealth to a broker in the form of fees and to the government in the form of taxes. Dancing in and out of stocks hoping to be in the right place at the right time is a fool’s game. And the market, like life, doesn’t suffer fools. Time is the friend of the investor who patiently builds their portfolio and let’s it grow. Be patient and build your nest egg.

They have been underestimated: I don’t know this for a fact, but I would guess that Mr. Read was underestimated at some point in his life. And adversity is a crazy thing. It comes in many forms, and at some point in your life — you will have to find ways to overcome it. Think of the last time the odds were against you. Maybe you were considered the underdog in a sporting event, or were told that your goals in life are unrealistic. Whatever the case may be, the only thing that’s important is this – how you react. Some people thrive on adversity and use it to fuel success. Then, there are those who can’t carry that weight and let it bring them down. In my opinion, facing adversity and being underestimated is one of the best ways to reach success. In fact, I believe that one of the best opportunities you can be given in life is to be underestimated. Because being underestimated can plant the seeds, the seeds of demanding a better life. If you have the feeling that you are being underestimated, that’s probably your conscious telling you, urging you, to stop holding back. Stop being little. Demand more.

Ronald Read left an estate worth $8 million. Of that, he bequeathed $4.8 million to the local hospital and $1.2 million to the local library. The remainder was left to his stepchildren and his friends. He accomplished something significant, with just a small amount of resources.

Could someone today duplicate Mr. Read’s results? Absolutely. People are doing it every day. But it does depend on the individual. It depends on whether they will do what the must do today, to get what they must have tomorrow. Will you?

Be free. Nothing else is worth it.




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