Ronald Read lived in rural Vermont and pumped petrol for a living. But on his death, friends were surprised by his wealth.
Mr. Read, a longtime resident of Brattleboro, Vt., died in June at the age of 92. His friends were shocked when they learned his estate was valued at almost $8 million. Long widowed and with two stepchildren, he left most of his money to a local hospital and library.
So how did he manage to pull it off? Besides being a good stock picker, he displayed remarkable frugality and patience—which gave him many years of compounded growth.
He lived modestly, working as a maintenance worker and janitor at a J.C. Penney store after a long stint at a service station that was owned in part by his brother. Those who knew him talk of how he at times used safety pins to hold his coat together and sometimes parked his 2007 Toyota Yaris far from where he was going to avoid having to feed the parking meter.
When he died, Mr. Read left behind a five-inch-thick stack of stock certificates in a safe-deposit box. The shares represented the bulk of his estate, and his executor and Wells Fargo still are working to determine their exact worth.
To Have and to Hold
Friends say Mr. Read typically bought shares of companies he was familiar with and those that paid out hefty dividends. When dividend checks came in the mail, he deposited the money back into more shares.
Physically holding stock certificates became passé for investors more than a decade ago, but Mr. Read held onto his.
In recent years, as investing shifted to electronic platforms, firms began imposing fees for ordering the actual certificates. So Mr. Read turned to a more thrifty option, agreeing to have his purchases held by the official record-keeper for share ownership—known as a transfer agent—that each public company employs. That likely saved him from $25 to several hundred dollars per transaction, says Peter Duggan, a senior vice president at transfer agent Computershare.
By buying shares this way, he likely also paid low fees, even compared with those charged now by many online brokerages for do-it-yourself investors. The average fee for buying shares in a so-called direct-stock purchase program is about $3 at Computershare, Mr. Duggan says.
Mr. Read relied in part on print publications for his investment research and, while he subscribed to The Wall Street Journal and Barron’s, he also made use of the local library. He also chatted about investing with those he knew, including a neighbour who also was his Wells Fargo adviser in Brattleboro. He regularly sought advice from this adviser and kept a brokerage account at the firm, but it held only a small portion of his investments, according to Mr. Read’s attorney, Laurie Rowell.
For today’s investor, using Mr. Read’s exact approach could be somewhat cumbersome. The fees now charged for paper certificates make that kind of trading expensive, and having purchases held by a transfer agent puts an added burden of research and record-keeping on the investor. Most low-cost investors these days favour the ease of online trading platforms and the ready accessibility of research on the Internet.
From Anna Prior, Wall Street Journal