This Vermont doorman amassed a fortune of $8 million without anyone around him knowing. Here are 3 simple techniques that made Ronald Reed rich — and they could do the same for you

This Vermont doorman amassed a fortune of $8 million without anyone around him knowing. Here are 3 simple techniques that made Ronald Reed rich — and they could do the same for you

Warren Buffett is reported to have once said, “You don’t need to go to extraordinary lengths to achieve extraordinary results. You just need to do the ordinary, everyday things very well.”

It may sound too simple to be true, but if you ever doubted the wisdom of the Oracle of Omaha, you should hear the story of Ronald Reed.

A retired gas station attendant and janitor passed away in Vermont in 2015. Nothing about his life or death was unusual, except for the fact that his estate was revealed to be worth $8 million posthumously.

This was a surprise to much of the local community in Reed. “He was a hard worker,” his stepson told the local press after his death, “but I don’t think anyone had any idea he was a millionaire.”

Reading didn’t have the kind of career path you’d usually associate with a billionaire. How did he do that? Here’s a closer look at the three simple techniques that made him so rich.

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thrift

Ronald Reed seems to have a reputation for being very frugal. In fact, he probably could have given Buffett — who’s famously frugal — a run for his money.

Reid’s friends recall him driving a used car and using safety pins to hold his frayed coat together. He even continued to chop his own firewood well after his 90th birthday.

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It’s a painlessly straightforward approach: spending less than you earn makes you invest and generate wealth over time through investments.

“I’m pretty sure if he made $50 a week, he probably invested $40 of it,” Reid’s friend and neighbor, Mark Richard, told CNBC.

investments

After his death, Reid’s personal portfolio was analyzed by The Wall Street Journal. They discovered that many of his positions had been held for several years – if not decades – and generated huge returns over that time.

In 2015, the Reds’ portfolio included heavyweights such as Wells Fargo (NYSE: WFC), Procter & Gamble (NYSE: PG), and Colgate-Palmolive (NYSE: CL).

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Again, here’s another resemblance between Reed and Buffett. If these names sound familiar, it’s probably because you’ve seen some in Buffett’s portfolio, too. In fact, Berkshire Hathaway has had a large position in Wells Fargo for several years and Procter and Gamble is still part of the portfolio.

Both investors prioritized long-term positions in undervalued and ignored companies. This is what helped Reed build his multi-million dollar fortune. However, for both investors, the key ingredient was time and patience.

longevity

Ronald Reed lived to be 92 and Buffett is 92 now. Both investors have benefited greatly from living and working longer than average. In fact, 90% of Buffett’s fortune was made after his 60th birthday. If he retired early in his fifties, most people would never have heard of Warren Buffett.

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The power of compounding is amplified over longer time horizons. In other words, investing for a longer period is likely to yield better returns. Buffett’s compound annual growth rate of 9.17% would have turned $1,000 into $9,000 in 25 years and $13,900 in 30 years.

To be fair, none of us can control how long we live. Instead, start early and stay In the market for as long as possible is probably the best strategy. It is also recommended to let the winners ride longer. Taking profits early or trading your positions often increases costs and reduces the power of compounding.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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