Share this story
Close X
Switch to Desktop Site

Secret millionaire donates her fortune to Lake Forest College. Here's how she did it.

(Read article summary)
View video

AP Photo/Seth Wenig/file

(Read caption) Berkshire Hathaway Chairman and CEO Warren Buffett is interviewed in New York, Feb. 22. Mr. Buffett, worth an estimated $40 billion, is known for his frugality, much like secret millionaire Grace Groner.

View photo

Grace Groner's life doesn't sound like the stuff of financial legend. After graduating from Lake Forest College in 1931, in the throes of the Depression, she found a job as a secretary for Abbott Laboratories, where she would work for the next 43 years. In 1935, she invested in three shares of the company’s stock, each then worth $60.

That decision would made Ms. Groner a millionaire seven times over. But her riches didn’t change the course of her life. She never altered her lifestyle to reflect her growing bank account. Almost no one knew of her wealth.

About these ads

Remind you of someone?

Recommended:Top 10 ways to spend a Goldman Sachs bonus

The secret millionaire shares certain traits with Warren Buffett, CEO and chairman of Berkshire Hathaway, whose fortune is estimated at $40 billion.

Here’s how you can follow the lead of these humble rich to grow your own fortune:

1. Live below your means

Groner lived in a tiny one-bedroom cottage she inherited from a friend. She didn’t own a car and bought her clothes at rummage sales. Mr. Buffett lives in the same Omaha, Neb., home he purchased in 1958 for $31,500.

2. Let it ride

Groner let her investment – three shares of Abbott stock – grow untouched, a strategy of investing often touted by Buffett. While most stocks won’t see the type of returns that Groner saw, “value investing” – which Buffett has come to define as “finding an outstanding company at a sensible price" ­– and reinvesting the dividends will let you take advantage of the power of compound interest.

About these ads

3. Discretion

Groner was more circumspect than the megabillionaire. While Buffett’s wealth is well known due to the public nature of his position, only Groner’s attorney knew about her vast reserves until she passed away recently, giving her $7 million estate to her alma mater.

As Thomas Stanley and William Danko write in The Millionaire Next Door:

Wealth is not the same as income. If you make a good income each year and you spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.