Phyllis A. Stone was a typical New Yorker. There was nothing special about her. She wore frumpy house dresses, drove a beat-up old Chevy Cavalier, lived modestly in a two-family house and frequented her local church. A friend of hers described her as “an average person and a lovely lady who was not at all ostentatious.” She was ordinary in all sense of the word, except, she had one astonishing secret. That secret would only be reviled upon her death.
When Phyllis Stone died at the age of 91 in 2013, the beneficiaries of her will got a shocking surprise. Phyllis Stone was a millionaire. To be specific, Phyllis left an estate worth more than $6 million. Her friends were astonished. Her beneficiaries even more so.
Phyllis bequeathed nearly all the money to charity. Upon her death, she left six-figure bequests to several local not-for-profit organisations and social service agencies, including identical amounts of $885,642.89 to the Children’s Hospital at Albany Medical Center, Salvation Army, American Red Cross and the United Way of the Greater Capital Region. $250,000 was given to each of The American Heart Association, American Lung Association and Capital City Rescue Mission. She also left £250,000 to her local church.
This act of philanthropy was amazing especially coming from a person like Phyllis. “You’d never guess she was a millionaire based on her appearance,” said one of her friends. But yet Phyllis was a millionaire; several times over.
So how did this average New Yorker build a seven figure fortune?
The answer lies in the stock market. During her career, Phyllis worked at Mobil Oil Corp for more than 35 years. As far as the reports go, she worked in real estate division of the firm earning an average pay. But what made her different is that unlike most employees, she had an owner and not employee mindset. She was not content with just taking home a meagre salary. Phyllis wanted a portion of the profits Mobil made. And she did exactly this by buying shares of Mobil Corp.
At the time of her death, Phyllis had “tens of thousands of shares of Exxon Mobil and other stocks and bonds”. By working at Mobil, she had seen how well the business did and became an owner. This is the reality of what most investors look like: normal people who are otherwise good with money.
People probably don’t conjure images of her when they hear the phrase “oil millionaire” or “investor” because it’s not as exiting as the mirage. They’d rather imagine some twenty-something-year-old college grad wearing an expensive suit, living in a loft in London, Paris or New York City, partying every night till the sun rises. (I’m not exactly sure why, though I suspect films, magazines, and television have played a role as this is a common plot device or archetype.)
But Phyllis was an oil millionaire in every sense of the word. She had millions worth of stock in Mobil Corp (now Exxon Mobil) and had an annual dividend income in the hundreds of thousands of dollars. This money dropped into her account no matter what she did. If she chose to stay at home all day watching t.v. the money rolled in. If she chose to go down to the beach, the money rolled in. If she chose to take a round the world trip, the more still rolled in. Phyllis created a dividend machine that would pump out six figures in pure passive income annually without her having to do any work. Bliss.
That is the story of Phyllis A. Stone and how she became a secret buy and hold millionaire. From the above, I think we can derive three main points.
1. Save More Than You Earn and Invest The Difference
This is the golden rule of personal finance. If you continually spend more than you earn, you will never be in a position to retire rich. ON the other hand, if you continuously save money month after month and invest that amount, wonderful things can happen. Phyllis new the important of this. It is why she was not ostentatious. She wore frumpy dresses and drove a beat up chevy. She knew that amounts not spent today could turn into millions in the future.
2. Buy shares of excellent companies
When you’re investing for the long-haul, you want to own excellent businesses that have durable competitive advantages, generate lots of cash, high returns on capital, have owner-oriented management, and strong balance sheets. Exxon Mobil is great example of a company with these traits. It is no wonder Phyllis was able to compound her money over a long period of time.
3. Let your money compound uninterrupted for a very long time
Probably the biggest reason Phyllis stone was able to amass such as substantial fortune was that she allowed the money to compound for over half a century. No, that doesn’t mean you have to live the life of a monk or deny yourself the things you want. What it means is that you learn to let your money work for you instead of constantly striving to scrape by, barely meeting expenses and maintaining your standard of living.