The Janitor Worth $8 Million
I often use the example of the janitor, Ronald Read, who worked at JC Penney’s as well as a side job as a gas station attendant. At the time of his death at age 92 in 2014 he had an estate worth $8 million.
The World War II veteran lived simply, driving a used car and cutting his own firewood when he was 90 years old.
He picked good stocks and owned stock in 95 companies and held onto them. An example of not wavering from his discipline.
He donated $6 million of his fortune to his local library and hospital.
The Nurse Who Gave Away $4 Million
Stephanie Mucha is another great example. She who worked more than 40 years as a licensed practical nurse in Buffalo, New York.
Mucha started her fortune with 50 shares of Medtronic at $5.11 per share.
She and her husband did not waver from their discipline, growing their shares for 26 years.
They added to their shares over that time and eventually held 8,500 shares at $54 each totaling $459,000.
By 2007 her portfolio had grown to more than $3 million.
Mucha did not own a computer. She made all of her trades over the phone.
A smart woman, she reinvested her dividends.
She even sold her wedding band after her husband died for $2,700 and invested the proceeds.
She donated $4 million of her fortune as well as provided scholarships for 30 students of Polish heritage.
How to invest on a fixed income
The time to plan is now, despite your age and income. Even if you are already in your 60s.
According to Jeremy Siegel, author of Stocks for the Long Run, “Over a 10 year period stocks beat bonds 80 percent, 20 year period they beat bonds by 90 percent and over a 30 year time horizon, they beat bonds nearly 100 percent of the time.”
According to the Motley Fool, “For holding periods of 17 years or more, stocks have always beaten inflation, a claim bonds can’t make.”
A healthy allocation of stocks makes sense for investors of all ages with experts indicating if you are 30 to 40 years away from your retirement goal invest anywhere from 60 to 80 percent in stocks. If you are in you are 10 years or less to your retirement goal, anywhere from 50 to 80 percent in stocks.
Stocks have never had a negative yield return.
As mentioned in my current USA Today column, “Despite the market’s big drop this Monday, the indicated dividend yield of the S&P 500 is just about 2.0 percent which means, once again, stock yields are above the 10-year Treasury yield.”