Here is a story from CNBC about a janitor who built an $8M portfolio.
The big question is, how does someone making close to minimum wage become a multi-millionaire?
Ronald Read’s Background:
- He was the first in his family to graduate from high school.
- Thereafter, he served in the military during World War II, specifically in North Africa, Italy, and the Pacific.
- After the war, he came home to work at a gas station and as a janitor at JCPenney.
- He also got married and raised two children.
- He maintained a frugal lifestyle. Friends remember him driving a used Toyota Yaris, using safety pins to hold his coat together, and cutting his own firewood well into his 90s.
His secret to his success:
- Discipline – Buy stocks every month. This is key! You need to treat your investment account like a mandatory payment, such as your mortgage, rent, or energy bill. Most investors make the mistake of skipping months. Ronald Read made sure he invested every month. Remember, true wealth is built with “Time in the Market”, not “Timing the Market”.
- Patience – Set your sights on the long-term. Don’t expect to get rich overnight. If you can invest 15% – 30% of every paycheck and do that for over 10 years, compound interest will do a lot of hard work for you.
- Emotional control – When the market goes down, don’t sell. This is a big mistake beginner investors make. Over the last 100 years, we’ve only had about 17 bear markets with an average duration of 10 months. This tells us that when the market goes down, it doesn’t go down for long. The trick is to keep buying more when the market is selling off. Because when the market takes off again, this is where you make big returns!
Stocks that Ronald Read owned:
- Procter & Gamble
- J.P. Morgan Chase
- General Electric
- Dow Chemical
- J.M. Smucker
- CVS Health
- Johnson & Johnson
In summary, buying individual stocks every month is the secret. Don’t focus on how much money you are making, instead, focus on how much you can invest every month.