The Grace Groner story
I came across a really interesting story about a woman who was a lifetime secretary for 43 years.
And she invested her way to 7.2 million dollars!
Which I think is really cool because it proves this thing that we are constantly trying to hammer home:
That you don’t need a high income in order to have a high AUM (assets under management), or net worth.
I want to just highlight some of her story and some of the lessons that we can take from this.
We’re pulling a lot of this from an article that we found. And we’re going to discuss 5 lessons to take away from her investing story.
Before we get into these lessons, I recorded the discussion Linda and I had that you can listen to on our Podcast, but, if you would rather read the full transcription, you can do so here in this article! Enjoy!
(The following is an abbreviated transcription from a video Linda and I recorded. Please excuse any typos or errors.)
Bob: But a little bit of her background, she was an orphan. She was apparently raised by her neighbors. Which, I don’t know what that looks like. But it’s an interesting start. At age 25, she becomes a secretary at Abbott Pharmaceuticals. I don’t know that many pharmaceutical companies, but apparently this was a big one.
Linda: Yeah. I don’t know it either.
Bob: She continues to work there for 43 years. Now, here’s what happened. Her first year working there, she bought three shares of Abbott stock for a total of $180. Okay. Three shares, a $180 investment.
Linda: Which, was probably a whole lot of money then.
Bob: Probably was. But as a secretary she somehow managed to come up with $180. She invests that money into those three shares. And then she reinvests the dividends.
The shares she bought were dividend paying stocks. So they might pay a couple percent each year and she takes those payments puts it back in to buy more stock. And just does that over and over and over again.
That’s reinvesting your dividends.
Linda: So she lives off of her paycheck. And any of the dividends she would get, she would just reinvest them?
Bob: Yeah, she did that for 75 years until she died. And that led to 7.2 million dollars.
Linda: That is crazy.
Bob: That’s mind blowing and I love it. That’s so cool. And so there’s five lessons that we can learn kind of from her story. Do you wanna read these?
Lesson 1: Compounding is powerful
Linda: Yeah. So number one is compounding over time is a powerful tool and the rate of compounding matters greatly.
Bob: Yeah, compounding. Apparently, I don’t know if this is true or not, Einstein has reported have said it’s the eighth wonder of the world. It’s just an incredibly powerful force.
Now, the other thing to notice here is that you can’t really save your way to 7.2 million dollars. Especially in today’s current interest rates that we’re dealing with. In this article they specifically talk about this and I love it. It said if she had $180 in a bank at 3% for that 75 years, it would’ve left her with $1,652.
Bob: So this is the thing that’s so important.
Linda: This is the difference.
Bob: Compounding is huge! But the difference between 3% and 12% (whatever the Abbott stock was, I don’t know) is astronomical… $1,600 to 7.2 million dollars!
Don’t be afraid to ask
Linda: One of the ways I like to look at this, because this is something where I feel like I don’t know enough. And you know, I don’t even know how to do that. I make up a lot of excuses that are maybe because I really truly don’t understand what to do. But asking someone is an easy way to solve that problem. Right?
Linda: But you have said to me like, “Linda, if someone was going to pay you 7.2 million dollars to figure this out, do you think you could do it?” And I would go. Yeah, actually I think I could do that for 7.2 million dollars!
Linda: I mean, that’s a really easy way to kind of flip this on its head. Instead of going well, I don’t have the smarts to figure that out.
Bob: Yeah. I love that.
Linda: Asking yourself: “well, if somebody even paid you a million dollars or $500,000, would it be worth it to you to try and figure it out?”
And I think almost always the answer would be yes.
Bob: Yeah. That’s a great way to look at it. So what’s your takeaway from that specifically?
Linda: I think my takeaway would be if I did not have you in my life doing this for me, which let’s be honest, that’s what’s happening.
Bob: It’s a nice perk, isn’t it?
Linda: It is a nice perk. Not everybody has that though. Like before we were married, I think that was my thing is I was well I’m just… I can’t figure this out. I don’t know how to do it. I don’t even know where to start. It’s like, well you could start with someone who just has a little bit more information than you. Maybe your boss?
Bob: Just asking some questions? Yeah, for sure.
Linda: It’s like ask your boss if they know anything. Ask HR, you know, there there’s some easy ways.
Ask Bob, honestly, just send us a message on Instagram.
Bob: I’d be happy to answer anything I can.
Linda: Yeah, he’ll give you a starting point at least.
Our 10X Investing Course
Bob: Yeah. Well, that’s why we made our 10X investing course.
Bob: Because that’s the whole point is for people like you who don’t know where to start and don’t know what to do. It’s like, all right, we’re gonna lay this out step by step as much as possible. So you have something to start. So you have something to run with, you know?
Linda: And again, if somebody’s gonna pay you a million dollars to figure it out and invest… you can probably make it happen. Right?
Bob: I think so. All right, let’s go to the second point.
Lesson 2: Slow and simple wins the race
Linda: Number two is a simple plan executed over a long period of time usually beats a complicated plan that is adjusted constantly.
Linda: That’s really interesting. And again, those are for the people like me, who it can be really complicated.
Bob: But it’s not like, that’s the thing. It’s not that complicated. The financial industry has tried to convince us all that we’re not smart enough and that it’s so complicated to figure out investing.
Linda: I think you need to say that again, so people in the back can hear it.
Bob: Yeah, I worked in this financial industry for years. And I just know how it works. They want you to think that it’s more complicated than it needs to be.
Bob: Grace just happened to buy this stock at a company that has performed well over the period of time. And she could have bought Enron, or something, and lost it.
But the point is, investing over the long term and just letting it sit and just do its own thing. That’s where the power is. And this is why we’re huge advocates for index funds. Particularly US stock market index funds, because they’ve just consistently performed so well over the long term. And it’s a set it and forget it investment that you can set up.
Investing advice from Warren Buffett
Linda: And that’s the one that Warren Buffett has his wife’s investments going to?
Bob: Yeah. I mean, it’s not just that, but yeah.
Linda: So in other words, Warren Buffett suggests it.
Bob: Yeah, Warren Buffett is always recommending for people who don’t know how to invest, to pick S&P 500 index fund and put your money in that.
And I think the point is we have all kinds of people day trading and trying to go in and out and flip all this stuff. Running around like they’re crazy. And it’s just been proven over and over again, the tortoise beats the hare. And it’s the same idea, the same principle.
In fact, Warren Buffett a couple years ago ended up taking out a million dollar bet with some of the top hedge fund managers. And saying, “I bet that the S&P 500 index fund over a 10 year period is going to beat your hedge fund.”
Linda: Did he win?
Bob: And he won.
Linda: That’s awesome. So how many of them had to pay him a million dollars to grow his financial numbers?
Bob: Well, I think he gave it all to charity. Which is a perfect illustration of this idea that a simple plan executed over a long time will beat a complicated plan.
Linda: That’s really interesting.
Bob: Almost every time.
Lesson 3: Let your investment ride
Linda: Okay. So that leads us into number three, which is she held onto it through a whole lot of different events and circumstances.
Bob: Stock market corrections, wars, everything. She just held for a long, long time and didn’t do anything else. I think what happens oftentimes, or I know what happens, is people get freaked out. It’s like, uhoh, we might be going to war or Russia might start World War III, or whatever, so I’m going to sell all my investments. Or there’s a recession or covid hits. So I’m gonna sell my investments.
And you know, I’ve been guilty of this. I think most of us have. We get freaked out and we sell. And that’s the worst time to sell. If you just honestly forget that you even have it and just let it ride.
If it’s an individual stock that’s not necessarily always the best way, depending on the way the particular approach that you’re taking. So I buy stocks with that in mind. Knowing that I want to hold the stock for decades.
And I buy index funds that I’m planning on holding for decades. In that case, then it just makes a whole lot more sense to just forget about it and stop looking at it. Delete the thing on your phone, you know, showing whether it’s going up or down every day. Because it doesn’t matter, you’re just holding over the long term and that’s what you need to be doing. It saves some mental energy. And it performs better.
Linda: Well, and again, this is actually where I would shine is because I really would forget about it. And then have a pleasant surprise later in my life.
Bob: Yeah. And that’s just the best way to do it.
Lesson 4: Invest early
Linda: Okay. So number four is investing from an early age can make a huge difference in eventual results.
Bob: They have an illustration in this article that I think is perfect. It said if Grace had invested to save $180, the same $180 in 1945 instead of 1935 when she started, she would’ve died with 1.7 million dollars instead of the 7.2 million dollars.
Linda: 10 years later?
Bob: Yeah. So just 10 years difference. It made that much of a difference, 1.72 million to 7.2 million. And this is why I and everyone else is always saying, alright you’re in your twenties… you’re in your teens… get ahold of investing now. Trust me you are going to thank me later. Because time is your number one ally when it comes to investing growth.
How to easily set your kids up financially
Linda: Well, and really this is a great thing for parents of kids who are graduating high school or college to start your kid off investing young.
I think that would be a terrific graduation gift to give or to receive. Because if you just put money into investments and just let it sit, maybe not even tell them that it’s there. Then that will eventually grow to something that is, man…
Bob: Yeah, I just did another podcast or video about this, it is fascinating. If your parents or my parents would’ve invested $2,000 for us the day we were born.
Linda: Oh, no.
Bob: Invested $2,000 one time. And did nothing else to the S&P 500 index fund. When at age 65, we’d both have a million dollars.
Bob: $2,000 investment, one time, that’s it. Over 65 years.
Bob: That is fascinating to think about. But that’s the power of starting investing early.
Linda: We should do that for our kids. Why haven’t we done that?
Bob: Well, we’ve started some stuff.
Linda: Oh, okay. Good.
Lesson 5: Not letting your wealth define you
Linda: Number five, lastly, the most important lesson.
Bob: I don’t know all of her story, but they’re pulling out something here is that I think is an important part.
Linda: Yeah. So it says that the last and most important lesson is that she was happy and probably would’ve been happy even without the giant nest egg.
Linda: Which I think is just really cool. It’s just a good reminder that money isn’t everything. And even though this was a lovely thing for her to end her life with… she ended up donating it all.
She didn’t depend on this money to make her happy. And I think as believers, we should not either, we do not depend on money. The joy of the Lord is our strength. Joy is one of the fruit of the spirit and being able to walk around showing that like who the Lord is through our joy.
Bob: Yeah, because it’s interesting to me how she really just set up this investment and forgot it. And then just let it go. I don’t know how often she checked her investments, maybe she forgot about ’em for a decade. But it’s interesting because it feels like we see that a lot. Where people who are not thinking about their investments a lot, are kind of disconnected to them. Versus those who are watching them every single day. They are possibly a little bit more tied up in them than they should be from a happiness perspective.
Don’t obsess on what stresses you out
Linda: Well, we’ve even had this happen with the business. Back in the early days of the business I think because you hadn’t been blogging for very long, I remember you were checking every single day on the Google analytics and all the different numbers. You’re like, I want to see what’s working. And you know, part of that is because it was your job and it was new and you wanted to make sure that you were making progress. But it got to an obsessive point for you.
Linda: If you saw a little dip, you were like, “oh my gosh, the business is over.” And you’d get really bummed out, you’d be depressed the rest of the day. I mean, it was pretty interesting. And you said, “I have to stop doing this.” And as soon as you stopped obsessing, it really change. And now we’ve seen big spikes and…
Bob: Big drops.
Linda: …some big drops.
Linda: You’re a lot more even keeled than you were at that point.
Bob: For me it was very fear based. I was nervous that our business was just going to blow up and dry up. It’s like watching the news every day.
Bob: If you watch the news daily, you’re gonna see all the stuff that’s gonna stress you out. You’ll see all these indications of things that seem like bigger deals than they are.
Bob: But if you remove that, then you just live a less stressed life. Because so many of the news stories are just things that people are freaking out about, but don’t actually happen. It’s a fine balance. I want be aware of what’s going on, but…
Linda: To be honest, there’s little that I watch my on local news that affects my daily life. But if I’m watching it and focusing on it, then I notice that I’m so much more stressed out and that affects my daily life greatly.
Bob: Yep. It really does.
Investing lessons learned
Bob: So anyway, I just thought this was a really interesting story. And I love hearing stories like this because it is honestly part of how I built the 10X Investing Course, from real stories. And lessons learned from real people in my life.
17 or 18 years ago, I met with my millionaire mentor. And he shared his story of how he was a middle aged school teacher before he ever invested a single dollar. I don’t think he even started investing till his late thirties as on a school teacher salary. When I met with him, he was in his mid sixties and a multimillionaire. And asked, “all right, how’d you do it?”
I wanted to know how he did it. And so hearing his first-hand story and then some of his other successes, really motivated me. For example he paid off his house with some Starbucks stock that he bought fairly early on. He realized wow, it’s really gone up a lot. We could pay off our house. And then they did.
His story really encouraged me to actually take action. It’s a real person I know and this actually happened to him.
Linda: Well, yeah and he wasn’t making a bajillion dollars a year.
Bob: Oh yeah.
Anyone can buy stock and have a similar story
Bob: So anyway, that’s part of why I want to share Grace Groner’s story. I just think it’s so cool. And it’s something that anyone can do.
Now whether or not you pick a single stock, that’s not necessarily the point. The point is just doing a little bit for a long time consistently. That’s the point I want you take from it.
Because, it’s not about whether she picked Abbott stock or whether she would’ve picked GM stock, or whatever. There’s any number of stocks that she could have picked that it would still be millions of dollars. It’s just a matter of whether it was 7 million or 10 million or 5 million…
Linda: Anything over a million sounds good to me.
Bob: Yeah. The point is that she’s doing really well at the end of her life. And she had a whole lot to be able to give away at that point. I just think that it’s a fascinating story.
Linda: So get on it, start investing. That’s your homework!
Bob: That’s your homework. Let’s figure out how to leave you, or have you leaving 7.2 million dollars when you die. I think that’s a good goal.
Bob: All right I think that’s all for today. I would love to give you a high five or take you out to coffee next time you’re in Nashville. By supporting our site through subscribing to our emails, leaving blog comments, taking one of our courses, following us on Instagram, subscribing to our Podcast and even giving us a thumbs up on YouTube… like it just help us.
But yeah, but that’s all. You’re awesome. Have a great evening and we’ll see you next time.
Links: The Grace Groner foundation