The $8 Million Janitor
This story is wild. A janitor and gas station attendant ended up building an investment portfolio worth $8 million in his lifetime. This is how he did it & what we can learn from it.
I think one of the biggest misconceptions people have about building wealth is that you need a lot of money to build wealth. I think a lot of people assume to build a good investment portfolio, you need to be making multiple six figures or millions of dollars every single year. However, that is simply just not true. It definitely helps, but not true. Let me explain…
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So who is this mystery $8 million janitor?
Ronald Read. The man, the myth, the legend. Ronald has a phenomenal story that teaches us how the power of consistency & smart money management can help you build wealth.
The best thing about this story is he never earned a high income. Being a gas station attendant & a janitor, his salary was not great. But that did not matter as much as what he did with the money he made. Rather than spend it all, Ronald saved & invested. His neighbor said “I’m sure if he earned $50 in a week, he probably invested $40 of it”. This is powerful because it teaches us 4 important things:
Don’t spend more than you make!
While this was in the mid 1900s, making $50 a week was not a great income, however Ronald knew one thing… to not spend more than he made. Heck, according to his neighbor, he was spending only 20% of what he made. This is a powerful lesson. This goes to show that even though he was not making a high income, he was able to find a way to save 80%!!! of his income. Now I am not saying you need to go save 80%, but the takeaway is you are going to have to find a way to spend less than you make. If you make $50,000 but spend $50,000… you are going to have no money left over for the second important lesson…
With the money you have left over, buy assets!
The income Ronald had was low, but his knowledge on building wealth was high (see what I did there 😉). I am sure had Ronald just kept that money in a savings account, his money would not have been at the $8 million he had saved. Probably way less. This is because you cannot build wealth in a savings account. If you have a long time horizon & in the correct places, investing that money into assets is what will help you grow your money.
One thing that Ronald did was be consistent. Investing $40 a week, just once is not going to move the needle. Investing $40 a week for 1 year isn’t what grew his money to $8 million. It was investing a % of his income every month, every year, for as long as he could. The consistency he had is what helped grow his investments to where they were.
The last, but most important (in my opinion) aspect for Ronald Read. He was patient. He lived to 92 years old. That is a long time! While consistency is key, so is patience. Understand it is not going to happen over night, but if you keep at it & stay patient. It can happen. But you have to be patient.
I think his story is super valuable to learn from. While I do think living on just 20% of your income is not viable for a long time, the bigger lesson is to live below your means, invest into assets & do it consistently over a long period of time. This is the lesson. This is the takeaway from Ronald Read’s story.
(x)Tweet of the Week:
A few books I have found helpful on my wealth building journey!
I've read over 200 books on becoming rich.
These are my 12 favorite that helped me get over $330,000 invested by age 25.
1: Rich Dad Poor Dad
— Decade Investor💸 (@DecadeInvestor)
Oct 27, 2023
Thank you so much for reading & I will see you next week! Until then, keep buying assets & stacking those dividends. 🙂
- Decade Investor