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Janitor Leaves $8 Million


wescobrk
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I love and dislike this article. I would have liked  the journalist to give at least some hint on how much he contributed and how much were gains, but having said that, I thought it was a pretty amazing story.

They didn't list anything about him inheriting any money so the reader can only assume it was on his own.

 

I guess something to generate discussion for the board is if he wasted any part of his life? Maybe he didn't receive any joy besides saving and investing. The story didn't comment about the quality of his relationship with his wife and children.

Is it a good life to only splurge on breakfast when you have millions in the bank?

Obviously society is benefiting from his sacrifice, but I wonder if he sacrificed too much?

http://www.cnbc.com/id/102404530

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I've read about several people like him and they all have a few things in common.

 

- they were cheap to a fault

- they have longevity, lived to be 80+

- they invested consistently

 

We all talk about getting several million for retirement say at 60. But going from 60 to 90 is where things really kick in. Just getting 11% return in the last 30yrs which is the s&p 500 TR return over that time, would mean you money goes up 23X ! So all he needed was 400k in 1985 at 60 to achieve this (provided he didn't draw cash from it, which is trait#1)

 

So it isn't hard IF you have the 3 traits. So I assume he ha no inheritance, it is all selfmade.

 

 

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Is it a good life to only splurge on breakfast when you have millions in the bank?

 

Yes it is. Frugality is very compatible with a good and rewarding life. Its only in this, the Age of Stupidity, that this even comes up as a question.

 

To the extent that anyone has studied this question and many, many, many have, no one has concluded that the best way to make yourself happy or live a good life is to spend more money. If anything its quite the opposite in every spiritual and philosophical tradition I can think of. Its such a settled point that even philosophical opponents agree e.g. Stoics vs Epicureans

 

The Hedonists (Epicurus) argued that friends, simple pleasures, knowledge would bring you happiness.  But they also argued that you shouldn't eat expensive foods or enjoy luxuries because it would make it harder for you to be satisfied.

 

The Stoics argued happiness could be obtained not by changing your external situation but instead by changing your thinking, hence the Epictetus quote: "Man is disturbed not by things, but by the views he takes of them".

 

The one common denominator is that nobody advocates for material possessions or spending money. At best they advocate for not being too extreme in asceticism (Buddhist middle path).

 

You can read the happiness research studies and I don't think any of them has argued for spending more money.

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Thanks everyone for posting.

I certainly wasn't ascribing a moral argument for the way he lived, if anything I was giving him enormous credit with my comments on sacrifice.

I was merely generating discussion for the board as maybe people can argue if one is living too conservatively or ascetically.

I certainly am not arguing he shouldn't live the life he wants to life. I believe, deepest in my soul, with Franklin's and Jefferson's (Franklin modified inalienable to unalienable) to life, liberty and happiness.

I'm aware of the happiness studies but thanks for posting.

 

I'm aware of the 'hedonic treadmill' and I'm under no illusions that leads to a happier life.

 

I just wanted to generate some discussion, more of a moderator, but please don't think I was criticizing this man.

I was not in the slightest. He was very unselfish.

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Is it a good life to only splurge on breakfast when you have millions in the bank?

 

Yes it is. Frugality is very compatible with a good and rewarding life. Its only in this, the Age of Stupidity, that this even comes up as a question.

 

To the extent that anyone has studied this question and many, many, many have, no one has concluded that the best way to make yourself happy or live a good life is to spend more money. If anything its quite the opposite in every spiritual and philosophical tradition I can think of. Its such a settled point that even philosophical opponents agree e.g. Stoics vs Epicureans

 

The Hedonists (Epicurus) argued that friends, simple pleasures, knowledge would bring you happiness.  But they also argued that you shouldn't eat expensive foods or enjoy luxuries because it would make it harder for you to be satisfied.

 

The Stoics argued happiness could be obtained not by changing your external situation but instead by changing your thinking, hence the Epictetus quote: "Man is disturbed not by things, but by the views he takes of them".

 

The one common denominator is that nobody advocates for material possessions or spending money. At best they advocate for not being too extreme in asceticism (Buddhist middle path).

 

You can read the happiness research studies and I don't think any of them has argued for spending more money.

 

If you have the means of enjoying material values, why should you not do so just as you do with spiritual values like friendship, productive endeavor, art, etc.? I don't see why there's any difference. You would not say that it's wrong to have a great friend because it will make all of your other friends less enjoyable. By this logic I should starve myself each week so I can appreciate brussels sprouts by Friday.

 

I agree with you that if you're unhappy, spending more money is probably not going to make you happier, but then concluding that the converse is true is wrong too. It's a false dichotomy to claim that either spending more money makes you happier or spending less makes you happier, even if 'everyone' agrees on it. Money isn't the fundamental driver of happiness.

 

Happiness is an emotion that arises from the achievement of values. For some people, producing great music or writing great literature is higher in their hierarchy of values than realizing the full potential of their people management skills. For those that are climbing the corporate ladder, they may value the realization of their management skills more highly. All three are equally valid goals, the achievement of which will lead to happiness for each person, but only one is likely to make much money. Since money represents material values, or consumption, frozen in time, if you have earned your money through honest, productive effort and mutually beneficial trade, it is completely consistent with happiness as an enduring state of consciousness to enjoy the material values that you have earned.

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"If you have the means of enjoying material values, why should you not do so just as you do with spiritual values like friendship, productive endeavor, art, etc.? I don't see why there's any difference. You would not say that it's wrong to have a great friend because it will make all of your other friends less enjoyable. By this logic I should starve myself each week so I can appreciate brussels sprouts by Friday.

 

I agree with you that if you're unhappy, spending more money is probably not going to make you happier, but then concluding that the converse is true is wrong too. It's a false dichotomy to claim that either spending more money makes you happier or spending less makes you happier, even if 'everyone' agrees on it. Money isn't the fundamental driver of happiness."

 

Good stuff, agaglio, thanks for the post.

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92 years old means he grew up during the Great Depression.  We've all heard stories of how that generation, and their children, can be frugal to a fault (slicing off the moldy parts of a bread loaf, etc.)

 

That said, I wonder how much confirmation bias might be operating here.  Maybe someone is aware of a survey study out there, showing what proportion of Depression-era folks have the opposite reaction and go for the opulent lifestyle when good times return.

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92 years old means he grew up during the Great Depression.  We've all heard stories of how that generation, and their children, can be frugal to a fault (slicing off the moldy parts of a bread loaf, etc.)

 

That said, I wonder how much confirmation bias might be operating here.  Maybe someone is aware of a survey study out there, showing what proportion of Depression-era folks have the opposite reaction and go for the opulent lifestyle when good times return.

 

They are a pretty interesting lot. My grandfather used to walk the whole town over visting all 3 grocery stores to save 10 cents on a can of tomatoes, then turn around and donate the shirt on his back to his community, always behind the curtains.

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If you have the means of enjoying material values, why should you not do so just as you do with spiritual values like friendship, productive endeavor, art, etc.? I don't see why there's any difference.

 

There are huge differences. Most people have friends, few people have a billion dollars. If you require a private jet to be happy then it will be more difficult for you to be happy than someone who doesn't.

 

By this logic I should starve myself each week so I can appreciate brussels sprouts by Friday.

 

Yes or do harsh exercises, meditate on your death, turn down the temperature in your house etc. All of these were Stoic practices. The insight being that its easier to reduce your expectations than to fulfill them.

 

Money isn't the fundamental driver of happiness.

 

On this we both agree. But money can be a fundamental driver of unhappiness. I would argue it easily becomes the case with people who are heavily in debt or have expensive tastes. I have seen many people who have more money than they need complain when their money didn't buy them what they wanted....they get an expensive Audi and complain that it required frequent repairs, or an HDTV and complain about plasma burnin because they bought it when plasmas costed $10000. Their expectations are higher because they spend more and they are disappointed when they don't get more.

 

Happiness is an emotion that arises from the achievement of values

 

I would put it differently. Happiness comes from many things: freedom from worry, being liked and respected, romantic love, achievement, looking forward to future pleasure, having things go your way, being satisified with what you have. You have little control over many of these things. You do have some control over how you judge these things and the level of expectations you have for your life.

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The idea that happiness = reality - expectations always made a lot of sense to me.

 

Of course, one can then argue whether or not maximizing happiness is the end goal. The widespread rejection of the "Experience machine" experiment suggests it isn't. Humans are odd creatures I guess, most of us are driven to want to set challenges and pursue difficult tasks that run counter to the maximization of emotional and physical well-being.

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How do you balance low expectations with pessimism? Low expectations can lead to more happiness, but then you can become pessimistic, don't reach for the highest goals, and ultimately end up less happier.

 

I've generally found trouble reconciling the two to the point where it's paradoxical to me. Maybe I'm approaching it wrong.

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Is it a good life to only splurge on breakfast when you have millions in the bank?

 

Yes it is. Frugality is very compatible with a good and rewarding life. Its only in this, the Age of Stupidity, that this even comes up as a question.

 

To the extent that anyone has studied this question and many, many, many have, no one has concluded that the best way to make yourself happy or live a good life is to spend more money. If anything its quite the opposite in every spiritual and philosophical tradition I can think of. Its such a settled point that even philosophical opponents agree e.g. Stoics vs Epicureans

 

The Hedonists (Epicurus) argued that friends, simple pleasures, knowledge would bring you happiness.  But they also argued that you shouldn't eat expensive foods or enjoy luxuries because it would make it harder for you to be satisfied.

 

The Stoics argued happiness could be obtained not by changing your external situation but instead by changing your thinking, hence the Epictetus quote: "Man is disturbed not by things, but by the views he takes of them".

 

The one common denominator is that nobody advocates for material possessions or spending money. At best they advocate for not being too extreme in asceticism (Buddhist middle path).

 

You can read the happiness research studies and I don't think any of them has argued for spending more money.

 

Great comments on philosophy of life Rukawa.  Keep them coming!  It is fascinating that to me that most ancient philosophies and religions formed independently and rejected materialism.  One interesting thought is that happiness comes not so much from desiring things because you will always desire what you don't have and be miserable about it.  But from eliminating desire so you are never in wont of anything.  That is completely the opposite of mainstream society. 

 

From my reading of history a good percent of people have always spent money on materialistic things.  Now we just have greater means to do so. 

 

 

 

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Maybe he bought some walmart shares a long time ago and forgot all about them. And remembered right before dying. And just went with the whole 'yeah im frugal and dont care about money thing' while being very pissed off he had that money all along and did not spend it.

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There's also a CNN article which has a little bit more detail.  The attorney who is helping with the estate mentions a focus on dividend paying stocks.  He read the journal every day and was very frugal.  It also says he was a mechanic in business with his brother and after his brother sold the garage, he became a part-time janitor in quasi-retirement.  So that adds a little more color. 

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How do you balance low expectations with pessimism?

 

In his Almanac Munger quotes some proverb about the virtue of ignoring your spouses faults after marriage. Munger says that he prefers an even stronger admonition which is to be fully aware of all your spouses faults and to love them anyways.

 

In some sense the same idea can be applied to life. You can be pessimistic and yet love life and try hard all the same.

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  • 1 month later...

Some more information about Mr. Read's holdings and strategy in this WSJ article today: http://www.wsj.com/articles/route-to-an-8-million-portfolio-started-with-frugal-living-1426780320

 

"Mr. Read owned at least 95 stocks at the time of his death, many of which he had held for years, if not decades. They were spread across a variety of sectors, including railroads, utility companies, banks, health care, telecom and consumer products. He avoided technology stocks."
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