The Millionaire Janitor

On-screen: Ronald Read, an investor, philanthropist, janitor, and gas station attendant. — yes you read that right, this former janitor has his own Wikipedia page. But why? How will knowing the reason benefit me?

Here’s why —

Believe this or not, this former janitor left a whopping $8 million when he died. 2 million were given to his family and the rest $6 million was donated.

His secret?

Investing, more accurately the compounding effect. Ronald always set apart a specified portion of any money that he earned and bought shares of blue-chip companies. Over the period of his life, he got income from those shares in two forms — dividend income and capital appreciation income or capital gains income.

He used to reinvest all such dividends that he received into further buying shares of these bluechip companies.

Over the span of his life, he had shares in more than 90 stocks, which actually diversified his portfolio of, shares to such an extent that it did not take a big hit even when he had shares of Lehman Brothers which went bankrupt.

On the other hand

On the other hand, we have millionaires who go broke, and in most cases, this is due to overconsumption and bad investment and financial planning, which ultimately leads them to a place where they lose all their money.

This comparison with the example of Ronald Read just highlights how crucial it is to plan your investments and finance.