Tuesday, September 28, 1999

The Oseola McCarty Fribble

By Selena Maranjian (TMF Selena)

Note:On September 26, 1999, Oseola McCarty passed away. One of her bankers wrote to give us the news:

"A little more than two years ago, you wrote a very fine Fribble about Miss Oseola McCarty. I am one of the 'bankers' who helped her with financial matters. I have often tried to explain to folks that Miss McCarty's most remarkable feat was living as long as she did. She also found a way to save a little bit of money every week. Time was able to turn even the modest returns of her early investments into hundreds of thousands of dollars. If we had been able to introduce her to equities earlier, she would have left millions instead of thousands."

In the summer of 1995, a washerwoman named Oseola McCarty made headlines in newspapers across the country. Although you may have forgotten her by now, her story bears repeating, as it's chock-full of important lessons for Fools.

Oseola was born in Mississippi some 89 years ago, with no silver spoon in her mouth. This was the pre-Civil-Rights-Movement South, so not only were her means limited, but also, quite likely, her dreams. Her mother worked long hours to support her and from an early age, Oseola learned the value of a hard-earned dollar. As soon as she could work, she did. When she came home from days at Eureka Elementary School, she would iron clothes. And when her aunt fell ill and needed her help, Oseola's formal education was halted -- after sixth grade.

Oseola never married, and she lived for three-quarters of a century in a small, simple house, washing clothes for a living. Not owning a car, she walked everywhere, pushing a shopping cart a mile each way to and from the grocery store. Over the years, she continued to put aside whatever money she could, and plunked her savings into local banks. Although Oseola placed a high value on education, even if she had had the money, she would have had trouble attending the local University of Southern Mississippi (USM) when she was young. It didn't admit African-Americans.

By the mid-1990s, she decided that along with leaving money to her church and some cousins, she wanted to give most of her life's savings to the University of Southern Mississippi. The impressive sum of $150,000 bowled over school officials and was established as the Oseola McCarty Scholarship Fund.

This much of the story is perhaps inspiration enough. What a fine example Oseola set, selflessly helping others when she could simply have bought herself a bigger house, newer clothes, out-of-state vacations or an early retirement. But there are other lessons to learn. So let's continue.

In the course of my research for this Fribble, I was pleased to discover that there is an Oseola McCarty homepage on the Web. I learned there that her bankers, when they noticed how sizable her savings had grown, had stepped in to help her invest it, so that she would earn more than savings account interest. They moved her money into the likes of CDs and conservative mutual funds. Did they do her a favor? You bet. (They also have been looking after her in non-financial ways, convincing her to buy an air conditioner, for example.)

But could they have done more? Perhaps. I don't know when her savings caught their notice, but had it been, say, 30 years ago, her gift would have ended up a lot bigger. It appears that she had accumulated about a quarter of a million dollars by 1995. Let's say that she had only $50,000 in 1965, 30 years earlier. Had the bankers invested her in an S&P 500 index fund, which earns on average, 10.5% per year, her money would have grown to not $250,00 but $999,628 -- virtually a million dollars. Four times as much.

The lesson here is that in an effort to become your family's most beloved ancestor or a charitable cause's most beloved stranger, you should strive not only to save, but also to invest as Foolishly as possible. If Oseola had bought just a few shares of Intel or General Electric years ago, they would have boosted her bottom line considerably.

The final thought for the day from Oseola's story involves the aftermath of her gift. She had not craved attention when she donated her money. In fact, she had to be persuaded to abandon anonymity. And what happened next?

Well, the woman who had only left Mississippi once in her 87 years has now been to Washington D.C and New York City many times. She's been to the White House, met the Clintons, and has set the Times Square New Year's Eve ball in motion. She's received an honorary doctorate from Harvard University, was sung to by Roberta Flack, appeared on "Late Night with David Letterman," and carried the Olympic torch. ("I have arthritis in my foot and hands. But I just did the best I could.") She's been on the front page of The New York Times and was featured on TV as one of "The 10 Most Fascinating People of 1995" by Barbara Walters.

All this makes me shake my head a bit. Has the spirit of giving become so rare in our society that a generous gift makes headlines across the country? While we Fools learn how to best invest our money, we should also give thought to sharing our wealth, both now and later. We should share not only our money but also our time and our new-found Foolish knowledge. Perhaps, as Fools reform Wall Street by leveling the financial playing field, we might also do well to try and reform some of America's self-centered ways. When magnanimity such as Oseola's becomes a commonplace event, the world will be a better place.

I'll end with the main lesson that Oseola taught us. In her own words, from her own website:

"A smart person plans for the future. You never know what kind of emergency will come up... You have to take responsibility for yourself." "It wasn't hard. I didn't buy things I didn't need... The Lord helped me, and he'll help you, too... It's an honor to be blessed like that."

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