Ronald Read

Introduction

The true story of Ronald Read is one that is very interesting and inspirational, and I hope that you will be able to get a feel for the power of investing by the end of this article.

Storytime

Ronald Read grew up in a very poor household. He was the first person in his family to graduate from high school. After graduating, he went into the military. Once he was discharged, he worked as a gas station attendant and then as a janitor, earning very little. However, when he died, he had a fortune of $8 million. How did he do it?

Investing

As it turns out, Ronald Read got this much money through two ways: First, he lived very simply, eating very simple meals and wearing old, fraying clothes. Now, I’m not saying you have to live that way. You can totally do it if you want, but it is definitely not necessary to gain the fortune that he did.

The second way is through investing. His strategy was simple, but very effective: He bought blue-chip stocks (stocks of companies that are very well-known and that have a good reputation), and stocks that paid good dividends, which he could then use to buy more stocks.

He had a very diversified portfolio, with stocks from many different industries, which helped minimize his risk.

And the most important thing that he did was hold on to his stocks for a very long time. This allowed him to reap the long-term gains of these stocks as they climbed higher.

These strategies earned him $8 million over his lifetime, which he was able to donate to the organizations that had helped him, such as the local library that gave him access to news on his stocks.

Lessons

I really like this story because it shows how powerful the stock market can be. Ronald Read started from a minimum wage job and grew it to an $8 million fortune. You can do it too.

There are some important things that he did that helped him achieve his success. The biggest one is patience. When Ronald Read bought stocks, he didn’t buy them with the intention of selling them in 1, 2, or even 5 years. He held onto them for at least 10 years, and since the companies that he bought into were very high-quality companies, he was rewarded heavily.

It’s also important to note that not every investment he made worked out. He owned stock in Lehman Brothers, which went bankrupt in 2008. You and I will both make poor investments (I myself have made many bad investments already, and certainly will make more). The key is to not get too hung up on them, and to keep moving forward.

Ronald Read’s investment in Lehman Brothers also shows the power of diversification. The failure of Lehman Brothers affected him very little because of how diversified his portfolio was.

Conclusion

This strategy is not a get-rich-quick strategy. You won’t experience immediate growth, and probably won’t for several years. However, over time, you will see returns. Ronald Read’s story demonstrates many important lessons, and shows just what the stock market can do for you. You might not, and probably won’t, experience the incredible returns that Ronald Read experienced, but, if you are patient, you will see the benefits.