How 10 average folks became multi-millionaires

One of my favorite things to do is ready about average people who build significant wealth during their lifetimes. For some reason, these real life case studies resonate with me. They show the true power of investing and the real magic of compound interest.

We typically only hear about the mega billionaires and how they created their fortunes. Think Mark Zuckerburg who started Facebook, or Bill Gates who started Microsoft, or even Jeff Bezos who started Amazon. Each started a company and became a billionaire when the company went public. It is hard to wrap our arms around these stories because their path to wealth isn’t easy to replicate.

However, when you read about average people becoming multimillionaires without winning the lottery, you start to “see” how you might do something similar. At least this what happens when I read about these secret millionaires.

Here are a few “real” case studies you might enjoy of average people creating significant wealth:

1. Ronald Read, who was a gas station attendant and janitor, created an $8 million dollar fortune and left it to a local library and hospital in his will. Mr. Read was….”Known as an intensely private man who loved to chop wood and drive his second-hand Toyota Yaris around the Vermont town of Brattleboro.” Apparently Read would typically dress in a well-worn coat, flannel shirt and a baseball cap.  You would never be able to tell that he was a multimillionaire. In fact, his step-son had no idea of his wealth. The picture included above is actually of Mr. Reed. You can find his story on Yahoo finance at this link or an article on here.

2. Grace Groner, a secretary for Abbott Laboratories generated a $7 million dollar fortune living like the “secret” millionaire next door. In the article at this link, you’ll see she bought shares of her company’s stock and held onto them for decades reinvesting all of the dividends into additional shares. The key idea behind what she did was “reinvesting” all of the dividend income allowing it to compound over a long period of time.

3. Anne Scheiber, who was an IRS auditor, built a fortune of $22 million and left her wealth to Yeshiva University upon her death. She only invested into stocks she understood and these stocks tended to be “blue-chip” companies. She also elected to reinvest all of the dividends allowing her investments to compound over 50 years. You can read about Anne here.

4. Hayford Peirce, a science-fiction writer created an investment portfolio that provides him with $146,194 a year of income. His initial goal was to was to build a portfolio of stocks that would provide income needed for retirement. Back in 1995, he setup a plan to create $250,000 of annual income by the year 2025 and continues to follow this plan today and is obviously making significant progress towards this goal. His plan was to buy high quality dividend paying stocks and reinvest the income into additional shares. Read about Hayford in this article. (If you want to see my personal investing plan designed to generate over $300,000 a year of income, download this free book.)

5. Kathleen and Robert Magowan were “secret millionaire” twins who amassed a $10 million dollar fortune. Kathleen taught first grade for 35 years before retiring while her brother Robert was a Prudential Insurance agent. According to this article, they lived in their parents house and never really looked at their investments because they didn’t have a need for money. They left a significant portion of their wealth to charities.

6. Agnes Plumb left a $98 million dollar fortune to charity. Agnes’s story is a little different because she inherited her father’s Kellog stock. She simply held the stock allowing it to compound over time. A friend thought there was a math error when Plumb asked him to make a bank deposit for her. The deposit was for $437,000 and represented dividends received from the Kellog stock. You can read about Agnes here.

7. Curt Degerman collected bottles and cans to be recycled. Everyone assumed he was poor. He never completed school and never got married. They were shocked when he passed away at the age of 60 will $1.4 million. He used the money he collected from recycling to invest and build his wealth. Curt’s story is at this link.

8. Phyllis Stone passed away with a $6 million fortune after working at Exxon Mobile. Apparently she “wore frumpy house dresses, drove a beat-up old Chevy Cavalier, and lived modestly in a two-family house in Albany, New York.” Her investment portfolio included tens of thousands of shares of Exxon Mobile and other stocks and bonds. Here is a link to an  article on Phyllis who ended up leaving significant amounts of money to charities through her will.

9. Jack Gsantner accumulated $5.2 million as a billing clerk for Union Pacific. Nobody had any idea he was a multimillionaire because he drove old cars and drank cheap beer.  The funeral home apparently found tons of stock certificates and details on over 20 rental properties he had owned. They also found numerous savings accounts with significant amounts of money sitting in them. You can check Jack out here.

10. Lewis David Zagor, who lived in a rent controlled apartment in New York, passed away with an $18 million dollar fortune. Apparently he had so much dividend income coming in each month that he would go on shopping sprees at Saks Fifth Avenue when he wasn’t traveling the globe. He apparently was a hoarder and left a complete mess in his apartment. You can read more about Mr. Zagor and see a video of his apartment here.

As you read these stories, see what commonalities you find. There are several and these commonalities might be a formula you can use create your own multimillion dollar fortune.