Geology is the study of pressure and time. That’s all it takes, really, pressure and time.
-‘Red’ Redding, The Shawshank Redemption
I don’t know much about Geology, but I do know that the growth of long-term wealth is the result of time, compounding and patience.
Just look at the curious case of Grace Groner, who died in 2010 at the age of 100. She was orphaned at a young age and was raised by kind neighbors. She later lived in a tiny one-bedroom cottage in Lake Forest, Illinois. She shopped at rummage sales, loved to walk everywhere so never needed a car and worked most of her life as a secretary. She never married and had no children yet had many friends who loved her for the happy person that she was. So it was surprising to her alma mater, Lake Forest College, to learn that upon her death she left a gift of $7.2 million to the institution to start a scholarship program for students with big dreams but little money.
Grace did not inherit her wealth, nor did she scrimp and save for decades while denying herself the comforts that she really needed. In 1935, at age 25 and in the depths of the Great Depression, she secured a job as a secretary at Abbott Pharmaceuticals and worked there for the next 43 years. In her first year at Abbott, she bought three, yes three, shares of Abbott stock for a total investment of $180. She held onto the stock for the next 75 years and reinvested all dividend payments. Her Abbott stock split many times over the next 75 years, and together with her dividend reinvestment in shares, she died with over 100,000 shares of Abbott stock. No one knew that the unassuming elderly woman had amassed a fortune, until after her passing. The head of the school endowment “nearly fell off his chair” when told of Grace’s generous gift to the school and future students.
The story of Grace Groner can teach us many lessons about life and wealth management:
What will your legacy be?
C.J. MacDonald, CFA
Senior Vice President, Westwood Wealth Management