Below is a short real-life rags to riches story about Ronald Read. Over the last couple of years, I have said to my daughters "Remember the Millionaire Janitor" when talking about money. I share all the different money lessons from this story at the end.
The Millionaire Janitor Story
There was once a man from the US called Ronald Read. After finishing his service in World War 2, he took up a job at a service (petrol) station where he would fill up people’s cars with gas (petrol). He did this for 25 years. He then worked as a part-time janitor (caretaker) at the department store JC Penney’s for 17 years.
During his whole working life, he never earned much money from his jobs. Many of his friends were poor.
Ronald was different. Whilst he never earned a lot of money, he did manage to save a little bit of the money he earned. It was these small savings that helped Ronald do something remarkable.
It wasn’t until Ronald died in 2014, at the age of 92, that people realised just how remarkable he was. After he died, they discovered that Ronald had secretly amassed $8 million.
He did this by taking a small bit of savings and investing them in companies for many, many years. Whilst he never invested a lot, as he invested regularly and for a long time, his money grew and grew.
Ronald’s wishes were for $4.8 million to go to a local hospital, $1.2 million to a local library (which he used to visit to read about investing) and the remaining $2 million went to his sons, caregivers and family. His money changed the lives of many people.
It is believed that the only person who knew about his investments was his wife (she died before he did).
Whilst he never earned much money, as he looked after it, he was in the top 1% of wealthiest people in the world!
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The key messages from Ronald Read's story
After you’ve told your kids this story, make sure you highlight all the amazing lessons that Ronald Read's story teaches us all.
Firstly, he followed the Three Rules of Wealth:
RULE ONE: Saved more than he spent
This is the foundation of his financial success. He would never have been able to build this wealth if he spent all his money. Despite only having a relatively low level of earnings working in the service station and as a janitor, he kept his standard of living at a level which allowed him to save. In the UK, around 63% of adults are in debt (excluding mortgages), which means this one action put him ahead of two-thirds of others.
“Being wealthy isn’t about how much you earn, it’s about how much you keep”
RULE TWO: Invested what he saved
This is so powerful as many people believe that investing is only for the rich, highly educated or those who work in finance. This man took the time to learn the basics of investing, despite not having a high level of education. He became wealthier than most professional investors! This shows that everyone can learn to invest and if you do the basics well enough, you will become wealthy.
If you want to start investing for yourself and your kids, like janitor Ronald, follow our FREE guide.
RULE THREE: He was patient
He built his wealth up over many years. He didn’t look for quick wins nor did he compare himself to others. Now so many people wish they had the wealth he had but most people aren’t patient enough for their money to grow.
Don’t underestimate these three rules of wealth. Are you helping your kids follow them? The younger they learn to follow these out of habit, the more likely they are to grow up financially healthy and wealthy.
As Grandpa says in Grandpa’s Fortune Fables:
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Other Money Lessons From Ronald Read
The story isn’t just teaching kids about the Three Rules of Wealth. It also helps them learn about:
Charity
This is the other amazing aspect of the story. He used his wealth to help his local library and hospital. Becoming wealthy isn’t just about having nice things, it provides a platform to help others who are in need. Make sure your kids appreciate the benefits of using money to help others. You can read the blog on charity here.
Rich vs Wealthy
No one would have guessed a part-time janitor was super wealthy. They might have even judged him for having a low-paying job. The reality is that he didn’t appear rich but was incredibly wealthy as he looked after his money. Ronald's superpower is that he didn't care what other people think about him or his money. To teach your kids more about this subject please read my ‘Rich Kids vs Wealthy Kids’ blog.
Living frugally
In this real-world story, Ronald Read lived well below his means. As far as people know, he lived a happy life. That being said, with the wealth that he had amassed, there was an opportunity for him to retire earlier, spend more time with his family and travel the world. We want our kids to learn that we need to get a balance between saving and spending. Remember, money is just a tool to do the things that make you truly happy - just having lots of money alone is not the key to happiness.
I hope you share this story with your kids, not just once but many times as they grow up.
Thank you for reading!
Will
P.S. Grandpa's Fortune Fables helps kids learn all about looking after their money and investing. You never know, they might become as wealthy as Ronald Read! Get a copy for your kids, nieces/nephews, grandchildren, schools and friends so more kids grow up looking after their money.
Available at Amazon.co.uk and Amazon.com.
