The Untold Story of A Self-Made Investing Millionaire

In a world dominated by men, here is a rare untold story of a woman who quietly made it big as a stock market investor.

Anne Scheiber was 51 years old when she retired from her job as a low-level auditor from the American Internal Revenue Service in 1944. She never earned a salary of more than $4,000 per year, and although she was an exemplary worker, she never received a promotion. Maybe, because she was a woman and a Jew, the lots that were discriminated against in the workforce in general in the west during that period.

As per the executor of her Will, Benjamin Clark, Scheiber, who was already investing her small savings in the stock market when she retired in 1944, started here post-retirement life with a portfolio of about $21,000. Adjusted for inflation, that was about $297,000 in today’s money. Not really a large sum to retire in the US.

However, unlike most people, the story of Anne does not end with her retirement at age 51, with $21,000. That’s what most of us are looking for, right? A kitty good enough so that we hang our shoes and suits and retire to a happy, peaceful life?

But Anne’s story continued for another 50+ years, till 1995, when she died at an age slightly above 101. By that time, her investment portfolio was worth $22 million! That’s about $36 million in today’s money.

Now, if you are awed with that number, please note that Anne created this $22 million from $21,000 at an investment rate of return of just 14.6%. This was almost double the US S&P 500 index’s annual return of 7.5% during that period.

So, how did Anne do it? Was she a super investor?

One factor that helped her was the $3,100 ‘annual’ pension that she received after retirement, a large part of which she invested. It was a petty sum, to say the least.

But, as per Clark, the real heroes of Anne’s story of wealth creation were three – frugality, longevity and compound interest.

Although she was neither born into great wealth, nor did she generate it during her working life, Anne did possess these three very important things.

Firstly, she had an awful lot of time on her side. Despite retiring from the IRS in 1944 at the age of 51, Anne would go on to live for another 50 years.

Secondly, she had an extremely high savings rate. According to Clark, it was as high as 80% of her income. The fact that she never married or had children would have helped enormously in that respect, as would her frugality. She reportedly wore the same clothes since the mid-1940s, never changed her furniture, and lived her entire life in a small apartment that she rarely left.

Thirdly, she invested her small savings and reinvested her dividends in a diversified basket of high-quality stocks and let compounding work uninterrupted for 51 years. In doing this, she never attended a single shareholders meeting or read a financial statement.

As per Clark, almost every action she took post-retirement was about increasing her ownership of productive cash generating assets, which she rarely sold.

Of course, as per the few records about her, she was not a happy person (though we are not certain about that, given that she survived that long). “Anne was the loneliest person. I never saw her smile,” Clark said later. “She was very distrustful of anybody. She didn’t want anybody to know what she had, how much she had.”

As per her Will, she left virtually all her fortune to Yeshiva University in New York to support scholarships for Jewish female students. She was seemingly embittered by her experience, and this act of generosity was to help other women overcome job discrimination that she endured.

It was an eccentric life to lead – some might even not approve of it – but she certainly left behind a huge legacy and lessons for someone who worked a 9-to-5 without ever getting a promotion.

Anne Scheiber is a classic example of how regular people build wealth in the stock market, over the long term, without doing anything crazy.

“Take a simple idea and take it seriously,” said Charlie Munger, who turned 95 years old this January.

He has also said, “Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”

The biggest lesson that Anne’s life teaches is that if you live long enough, and live frugally, and invest simply and sensibly, and do it just in small bits and pieces, you may achieve greatness in your money life.

And, by the way, it’s not just about the money. Being frugal with your time, and taking small simple steps, over a long period of time, will take you a long way in any sphere of life. Habits, relationships, work, everywhere.

Of course, life is not just about money and compounding. You must not aim to live a lonely and miserly life (like not changing your furniture or the clothes you wear for years) as Anne did, and you may also want to get over your bitterness and forgive people and situations.

But I’m sure you get the idea, right?

• Start early and make time your friend,
• Save money month after month (while enjoying the present with your family),
• Work on a simple and stress-free investment process that can help you beat inflation (and that’s it!),
• Buy high-quality businesses that you would never sell, till they remain high-quality,
• Ignore the stock market volatility except to take advantage of it, ignore the upcoming recessions, and many other corrections that may shake out many more sophisticated investors, and
• Be happy with whatever you have now, and focus a lot on your health and happiness so that you may live long.

Then let the three horses of frugality, longevity and compound interest create miracles for you. Money or otherwise.