Ronald James Reed – an American philanthropist, investor, janitor, and gas station attendant (read that one more time).
Ronald Reed was born in rural Vermont, in a tiny house with little money. He was the first person in his family to graduate high school, made all the more impressive by the fact that he hitchhiked or walked four miles to school each day.
For those who knew Ronald Reed, there wasn’t much else worth mentioning. His life was about as low key as they come.
Reed fixed cars at a gas station for 35 years and swept floors at JC Penney for 17 years. In 1959, at the age of 37, he bought a two-bedroom house for $12,000.00 and lived there for the rest of his life. Reed was married with two stepchildren, whom he put through college. His wife died of cancer at age 50 and he never remarried. A friend recalled that his main hobby was chopping firewood.
Reed died in 2014, age 92. Which is when the humble rural janitor made international headlines.
2,813,503 Americans died in 2014. Fewer than 4,000 of them had a net worth of over 8 million dollars when they passed away. Ronald Reed was one of them.
In his will the former janitor left 2 million to his stepchildren and more than 6 million to his local hospital and library.
Those who knew Reed were baffled. Where did he get all that money?
It turned out there was no secret. There was no lottery win and no inheritance. Reed saved what little he could and invested it in blue chip stocks. He had smart spending and investing habits. Then he waited, for decades on end, as tiny savings compounded into more than 8 million.
That’s it. From janitor to philanthropist.
The fascinating thing about this story is how not-so-unique to investing this is. In what other industry or profession does someone with no college degree, no training, no background, no formal experience, and no connections accomplish this?
I struggle to think of any.
It is impossible to think of a story about Ronald Reed preforming a heart transplant better than a Mayo or Cleveland Clinic trained surgeon. Or designing a skyscraper superior to the best-trained architects. There will never be a story of a janitor outperforming the world’s top nuclear engineers.
But these stories do happen in investing. That is because building wealth has little to do with your intellect, income, or investment returns, and very much to do with your savings rate, consistently of it, and time. Barry Ritholtz of The Washington Post praised Reed, writing, “How a man of such modest means accumulated so much wealth contains exemplary lessons for savings that apply to all of us.”
Ronald James Reed’s story is a powerful example of how anyone, regardless of their upbringing or education can build wealth through consistent investing. It requires discipline, patience, and a long-term perspective. Live a bit below your means and invest the rest – time is your friend. That’s it!
“In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.”
-Peter Lynch
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
-Warren Buffet
