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Taking some of the same simple steps can make you much richer, too.
If you saw this headline and said to yourself, "I think I've already read about that secretary," think again. There are actually plenty of secretaries who have become millionaires by retirement. I recently wrote about one, Sylvia Bloom, late last year. (I've reported on a millionaire retired janitor, as well.)
Here's another secretary, though, who's just as inspiring -- and instructive: Grace Groner. Read on to learn more about her, and the lessons we can draw from her success that can help us grow much wealthier.
Image source: Getty Images.
Grace Groner attended Lake Forest College. That's relevant because upon her death at age 100 in 2010, the college received a rather hefty donation from her -- to the tune of $7 million. Was she a socialite from a famous, wealthy family? Someone who created a multimillion-dollar business? The wife of a billionaire? Nope -- she was a woman who lost both parents when she was still a child, and ended up adopted by a family in town.
Grace grew up, went to college, got a job as a secretary at Abbott Laboratories, and stayed at Abbott for 43 years. She never married or had children, and lived in a simple one-bedroom apartment until someone left her a small one-bedroom house. She didn't own a car, but did enjoy traveling.
So how, exactly, did Grace end up a multimillionaire by the time she passed away? Well, she had invested in stocks, and as you may know, the stock market is one of the best ways to build long-term wealth. It seems she actually only bought three shares of stock (for $180, at about $60 per share), in her employer, Abbott Labs. She bought them in 1935 and held on to them -- for decades.
So what did she do right, that we too might do, in order to get as wealthy as we can? Here are the smart things she did:
You get the idea by now. You, too, might find some healthy and growing dividend-paying stocks and invest in them for many decades, reinvesting your dividends.
Despite all the things she did right, Grace did commit one big error, and purely by luck, she escaped being burned by it. Her major mistake was putting all her eggs in one basket -- all her shares of stock were in the same company. If it had gone belly up, her growing nest egg would have imploded. Even if she'd bought three shares in three different companies, that's not very diversified: If one-third of your portfolio is cut down by 50%, your portfolio will suffer a drop of almost 17%, which can be painful.
Being ultraconcentrated in your investments can be less problematic if you're an expert investor and are supremely confident in your investments. But most of us should aim to hold between 10 and 20 different stocks -- or, better still, we might just invest in the stock market via a low-fee broad-market index fund, such as one based on the S&P 500.
Another error by Ms. Groner was that she had all her investments in her employer's stock. Yes, it was a company she knew far better than most others, but the downside offsets that advantage: If Abbott Labs had gone out of business, she could have lost both her job and her retirement savings. That has happened to many Americans when their companies have declared bankruptcy, often to their surprise.
Many of us rather ordinary people have the ability to amass great big nest eggs -- and, very often, a million dollars or more. Grace's example shows us how much can be achieved even if you have a very modest start.
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