What I Learned from Hetty Green

Photo N.B. Whaling Museum

I must have been about 12 years old when I picked up a copy of the Guinness World Record’s book and came across the record set by Hetty Green for “richest woman in America”. The early 1900’s outfit she was wearing in the picture really peaked my curiosity.

What I learned about Hetty was that she was seen as a great miser. She was wealthy, but lived below her means. She had inherited a fortune from her father who had made his money in the lucrative whaling industry.

I found a biography about Hetty Green at my local book shop. As an adult I wanted to learn more about Hetty Green and what I could learn from her investments. The cover picture intrigued me as much as the one in the Guinness World Record’s book.

This time I wanted to know who was Hetty, and how did she live and make her fortune. The book went into great detail from her childhood until she passed away in 1916.

It was the investment’s she made that I wanted to learn about.

How does a person amass a large fortune? Well in Hetty’s case it was her investments in stocks and bonds, buying them at a low price holding the investment and selling it at a higher price.

It’s a strategy that many investors use, buy low sell high. As she amassed large amounts of stocks and bonds her fortune kept growing. The stocks that she held would pay heft dividends each year, allowing her to further expand her investments into real estate.

The railroad stocks of the day were one of her favorite investments. The other key to making her fortunes was that Hetty did her homework. She only invested in things that she had researched and thought out. She would wait a least a day before making an investment. As her wealth grew from investments in mortgage bonds and real estate, she kept her spending to a minimum. As a preferred investor of the Chemical Bank in New York City they offered her office space for free.

Hetty preferred to live in Hotels and rent flats or live in a boarding house. The savings from not having to maintain a mansion were put back into her investments. She became known as the “Queen of Wall Street”.

When it came to her children it was reported that instead of paying for a procedure on her son that would have saved his leg, she declined and the leg was amputated.

It was documented in her biography that Hetty was know as a tight -wad. She would eat porridge or oatmeal and spend little on clothing or hygiene products.

These are the lessons I learned from studying Hetty Green:
* Luck in this case a substantial inheritance
* Invest the interest and never touch or put the principal amount at risk
* Live within your means
* Never invest in anything without doing research
* Never rush an investment wait and think it over before taking action

These principles are sound and compare to similar strategies that others have used to make large fortunes.

A lesson that will stick with me from reading Hetty Green’s biography is that living below my means I can take the money saved and invest it to further grow my portfolio. Although I would not get to the point where my hygiene or choice of food would suffer, in order to save money. The more money you can accumulate the more investment opportunities you will have.

I find myself asking “What would Hetty do?” when it comes to investments.

Studying and learning from those who have generated large amounts of wealth has helped me with my choices.

Maybe one day I will make it to Bellows Falls where Hetty is buried and pay my respect, but I won’t bring flowers as she would have hated that waste of money.

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