It’s interesting to hear people scold the wealthy in America.
Most people assume that others get rich because they inherited money.
That’s the case for a few spoiled Millennials you’ll see eating 40 oz steak at Delmonico’s with a snifter of Grand Marnier on a Tuesday at 11:30 am.
I’ve seen these people before, and boy – they don’t look happy even with seven-zero inheritance in their bank accounts. Something went wrong there. But this crowd is much smaller than people think.
The truth is that most people don’t get rich because of their parents.
They get rich because they started a business, became a doctor or engineer, or became long-term investors who used the market’s ups and downs to build large, life-changing portfolios.
This latter practice takes time, patience, and a lot of risk management.
Today, I want to introduce you to a few people who started from the bottom and achieved extraordinary things as investors.
Remember: when you’re building wealth, you have to stay positive and find out what makes you happy.
Knowing why you are building this wealth is essential. So, take a few minutes to think about why you want to have a much larger lot in three to five years.
Of course, it’s also important to set aside some money for yourself.
Remember, actually spending some of it from time to time is rewarding. We don’t want to be like Hetty Green, who built up a fortune so that she could pile it up and sleep with a gun beside it each night.
If you’ve always wanted to see Paris – see Paris.
If you’ve wanted to go to the Super Bowl – splurge on 50-yard line seats.
Because you can and should make those purchases as you build your wealth and maintain a solid strategy in place.
People might say that money doesn’t buy happiness.
Well, you’re either a happy person or you’re not a happy person.
So you can be a happy person who can travel to Paris and leave their family life-changing wealth – or you can be an unhappy person who could travel to Paris and leave your family life-changing wealth.
But life is short – so figure out how to become the former and not the latter.
Me? I’m happy.
I remember installing fences in 105-degree heat in Texas while putting myself through college and graduate school. I remember that when my wife and I reached $65,000 in combined income, we felt like we’d won the lottery. I remember starting the journey and chasing a dream.
And tomorrow, I travel to Baltimore to meet with my team and work with some of my favorite people worldwide. I get to get up each day, smiling.
I teach people how to make money in the markets. That has always been my goal, whether I do it through academia or in my own company.
So, I can be a happy person who makes money.
And not a person who was hoping that money would make me happy.
That’s a key difference.
I’m happy that the work I do and the activities I do help achieve financial and personal goals.
But let’s talk more about some interesting characters who prove my point that you can balance finance and contentment – and not look like a broken-down Wall Street trader stuck in an office until midnight six days a week.
Great Investors With Great Stories
Today – rather than talk about strategies, theories, and approaches, let’s meet some people who have built generational wealth.
Studying what these investors have done can help us realize what we need to achieve similar results.
Last year, Forbes magazine did a great profile on a now 80-year-old man who has made hundreds of millions of dollars in the stock market.
Herb Wertheim started life in Hollywood, Florida.
He had dyslexia.
Back then, to society, he was just a dumb kid because of the stigma.
Herb spent more time hanging out the local Seminole kids hunting and fishing in the everglades.
That eventually got him in trouble. He ended up being given a choice of jail or the United States Navy.
Herb chose the Navy. That’s where life began for him.
He studied physics and chemistry after placing high on the entry exams.
At age 18, the young sailor bought his first stock. Wertheim was impressed with a tour of Leaf Jets’ facilities, so he made a small purchase of the stock.
To make a long and fascinating story short, Wertheim went to college and worked for NASA after the Navy. He eventually went to Optometrist school on a scholarship.
He had a practice in South Florida for 12 years. A lifelong tinkerer, in 1969, he invented an eyeglass tint for plastic lenses that would filter out and absorb dangerous UV rays.
In 1970 he started Brain Power, a company that allowed him to spend his time looking for ways to improve eyeglass lenses.
Brain Power grew into a large company that sold optical tints to companies like Bausch & Lomb, Zeiss, and Polaroid. Today Brain Power generates revenues of about $25 million selling lab equipment, cleaners, and accessories to opticians, optometrists, and ophthalmologists.
But Herb’s real brainpower centered around the stock market.
Herb has consistently taken part of his earnings and invested in the stock market. He has a preference for technology companies and industrial companies. Wertheim favored companies that had lots of patents. He is also a big fan of dividends.
Wertheim told the magazine that he is a big fan of never selling.
If the company goes down, you should buy more if you like it enough to own it. He bought Apple in the IPO and then bought more when the stock fell back to around $10 in the early 1990s.
Wertheim is worth several billion dollars after giving away hundreds of millions of his dollars to Florida public universities and other charities.
Brain Power was an excellent business, but it would never have made Herb a billionaire.
Investing in good companies, buying on dips, and managing his portfolio accomplished that outcome.
Safety Pins and Donations
Now let’s meet another gentleman who got very rich in the stock market.
The difference is that Ronald Read didn’t even have a profitable business to provide funds for investing.
Ronald Read was a janitor and gas station attendant in Battleboro, Vermont.
Read chopped his own wood and would use safety pins to hold his jacket closed so he didn’t have to spend the money on a new one.
No one knew that Ronald Read was a voracious reader who had a strong interest in the stock market.
He would scrimp and save and invest cash onto blue-chip stocks.
He liked big, well-known companies that paid nice dividends.
He would let the dividends pile up and buy other companies.
He bought shares in these companies and then just held on for his entire life.
When he died, they found a five-inch-thick stack of stock certificates.
He owned 95 companies in a wide range of industries worth more than $8 million.
For the most part, the money was donated to local charities, the local library that fed his reading passion, and Battleboro Hospital received their largest donations ever.
Herb Werthheim and Ronald Read were very different men.
They both used the simple concept of profitable businesses with decent dividends and multi-decade ownership to build generational wealth in the stock market.
They both used that wealth to make the world a better place than they found it as well.
They both worked hard from the bottom and learned the power of the markets.
We shouldn’t discount their stories or dismiss them.
We should encourage more people to follow their path.
We’ll talk again soon,