True Story: How $180 became $7 Million
Located 30 miles to the north of Chicago, Lakeforest College is spread over 100 acres. It boasts of a beautiful campus and a few notable alumni but something unusual happened in 2010 that shocked the campus and caught national attention as well. When college president Stephen D Schutt came to know about this, he is said to have exclaimed "Oh, my God".The college received a surprise grant of over $7 Million to benefit the students of Lakeforest college. The question to ask is, where did the money come from? If you learn about the source of this extremely generous grant, then you too may perhaps use the exact same words as Schutt. The grant came as per the will of an unsuspecting 100-year-old woman named Grace Groner.
Who was Grace Groner?
Born in 1909 in a farming community within Illinois, Grace and her twin sister were orphaned at the age of 12. Mr Anderson, a kind and prominent person within their community, took them as their own and even funded their education at Lakeforest College where Grace went on to graduate. Grace never married and ended up being with the Anderson family who counted her as their own. She joined Abbott pharmaceuticals as a Secretary in 1935 when the Great Depression was in its darkest hour. Grace ended up working in Abbott for the next 43 years.
How did Grace make her millions?
We know it sounds too fantasy-like and too simple to be true but it only took a simple investment of $180 from Grace to make $7 million. That's it! During her first year at Abbott, Grace was smart enough to buy 3 shares of the company worth $180 and even smarter to hold onto it for the rest of her life. She kept re-investing all the dividend payments over the next 75 years in which her stock split multiple times over and everything put together, she ended up with around 100,000 shares worth over $7 million dollars!
What can we learn from Grace?
KISS - Keep It Simple Stupid
It may sound stupid but sticking on to a simple plan for a ridiculously long period of time can do more wonders to you than constantly adjusting an extremely complicated and "intelligent" plan. Grace held onto her stocks through World War 2, countless recessions and contless other economically challenging times' but not once did she panic and sell her stocks. Classic investors are not necessarily the ones with a great intellect but often the one with great patience.
Power of Compounding
Had Grace chosen to keep her money in the bank for 75 years with an interest rate of let's say 5%, at the end of 75 years she may have ended up with less than $900! Can you believe it? It is only because of the power of Compound Interest, her $180 could grow to over $7 million.
Do check our blog here to know how Compound interest works.
Spending vs Investing - Striking the right balance
Grace of course lived a frugal life - she was unmarried, lived in the same apartment for 75 years, she enjoyed walking so never brought a car, and often enjoyed shopping during sales. Grace's lifestyle may be a little too frugal for most of us but it is for you to strike a right balance between how much you want to spend vs invest towards your financial freedom.
If you are confused about how much to spend and invest, do check our blog on the 50:30:20 budgeting system for a tried and tested formula!
The fact that Grace decided to buy shares in her first year at Abbott made a huge difference in how much wealth she accumulated. Let's say Grace bought those shares in 1945 instead of 1935, she would have over time accumulated not even $2 Million - less than 1/3rd of what she eventually made.
You must invest as early as possible to allow your money to find full expression.
If Grace's story has inspired you to start investing in your future and of those you love and care for, download the GlideInvest App from Google Play Store or Apple App Store and invest in personalized investment plans. We wish you all the success and prosperity!