Ronald Read's Inner Scorecard
“It is tranquil people who accomplish much.”
I recently came across the story of Ronald “Ronnie” Read, a Vermont-based gas station attendant and janitor who amassed an $8 million fortune.
He died at 92, leaving $6 million to his local library and hospital. Read was frugal, spending money only when he needed to, and investing the rest in well-known companies such as Wells Fargo, Proctor & Gamble, General Electric, etc. These smart habits allowed for the magic of compounding (8% for 65 years) and proved a large salary isn’t needed for wealth creation. He’s an inspiration to us all.
That pretty much sums up every article I’ve read about Ronald Read. Unfortunately, financial media pundits elude crucial points.
It was Read’s unwavering commitment to his “inner scorecard” that led to his many millions. Warren Buffett popularized this aphorism; it’s about living life on your terms (Buffett—Inner Scorecard) and not making every decision based on others' opinions.
Buffett attributes this sage advice to his father – “I think he really taught me that it’s more important, in terms of what’s on your inner scorecard than your outer scorecard. I mean some people, get in the position where they, they’re thinking all of the time of what the world’s going to think of this or that instead of what they themselves think about it. If your inner scorecard, if you’re comfortable with that, I think you’re going to have a pretty happy life, and I think the people that strive too much for the outer scorecard sometimes find it’s a little hollow when they get all through”.
Read’s thrifty spending and disciplined long-term investment approach were byproducts of living to his standards and abstaining from external influence. A common rebuttal to Read’s prudent ways is that we have a finite amount of time on earth; it’s precious. He should have learned to enjoy his wealth and given back to his community while he was still alive. Most of these comments are made by “wealth managers” who would have advised Read to liquidate his portfolio and invest in a diversified basket of exchange-traded funds, stocks, and bonds. Ironically, these people would like to enjoy his wealth too.
Read cherished his millions by reading: annual reports, books, and newspapers, collecting: stamps, coins, and stocks (95 to be exact), and eating an English muffin with peanut butter for breakfast, at the same location, on the same seat, every day. Last but certainly not least, he enjoyed being a father and paid his step-children’s college tuition (Read was the first in his family to graduate high school but didn’t hold a college degree, so that must have been especially gratifying for him).
Additionally, the media sends a message that Read’s investing regimen and modest means are replicable
but this is completely misguided. Read’s delayed gratification was unparalleled; an amalgamation of genetics, growing up on an impoverished farm, and living through the depression.
Here’s a link to an annuity calculator illustrating his accumulation of wealth ($350 monthly investments at 8% for 65 years = $8 million):
23,725 days of deferred consumption. His decision to drink hospital coffee instead of Starbucks resulted in the local hospital and library receiving their largest gifts after his death ($1.2 million and $4.8 million). Read had a lot of time to think about his estate; he appreciated the value those institutions brought to Brattleboro, and now the town is living better because of him. (it’s safe to say he was grateful for the books and English muffins).
In essence, the story of Ronald Read isn’t primarily about investing in blue-chip stocks or even extreme frugality. I glean that it’s about being selfless, useful, disciplined, grateful, and ultimately focused on living your own life to decrease the odds of a hollow one.
“It is tranquil people who accomplish much.”