# Holy- what a story!



## indexxx (Oct 31, 2011)

Check this guy out- inspiring for those on a modest income.

https://ca.news.yahoo.com/blogs/good-news/frugal-vermont-man-leaves-surprise-170851100.html


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## Cal (Jun 17, 2009)

Thanks for posting that. I always enjoy hearing stories like that for some reason. Interesting life choices.


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## My Own Advisor (Sep 24, 2012)

Wow. Great read.


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## Plugging Along (Jan 3, 2011)

Wow. That was really interesting. 


Just a reminder that those who look like millionares often aren't and vice versa.


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## indexxx (Oct 31, 2011)

I've always maintained that, to a point, it doesn't really matter what you do for a living or how much you make. It's all about how you manage it. I've been a bartender/bar manager my whole life, average earnings I guess. Often not working to travel for months at a time, recklessly spending money on guitars and other comforts but I've also been investing patiently for 20 years or so. Don't think I'll ever had $8 million like the guy in the story, but I own a condo in the Vancouver area, travel well, and will retire reasonably. And I've lived hard and fast and enjoyed it along the way.


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## m3s (Apr 3, 2010)

Investing and cutting wood. Hah! My kind of guy


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## Rusty O'Toole (Feb 1, 2012)

This kind of story comes up every year or 2. Always someone with a modest income, who lived their whole life as if they had no money at all, invested their savings and died worth millions. Always over 90 years old too.

It shows the power of compounding modest investments at average returns over long periods of time. Of course we never hear of the ones who invested their savings in Northern Telecom, Johns Manville, or Eastman Kodak all of which were blue chip investments at one time.


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## Eclectic12 (Oct 20, 2010)

Rusty O'Toole said:


> ... Of course we never hear of the ones who invested their savings in Northern Telecom, Johns Manville, or Eastman Kodak all of which were blue chip investments at one time.


Depends on how much of the overall portfolio, if any re-balancing was done and if one held on to the bitter end.


Cheers


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## sags (May 15, 2010)

Rusty O'Toole said:


> This kind of story comes up every year or 2. Always someone with a modest income, who lived their whole life as if they had no money at all, invested their savings and died worth millions. Always over 90 years old too.
> 
> It shows the power of compounding modest investments at average returns over long periods of time. Of course we never hear of the ones who invested their savings in Northern Telecom, Johns Manville, or Eastman Kodak all of which were blue chip investments at one time.


Not to mention total scams like Bre-X and Bernie Madoff. 

The guy in the story had 8 million dollars. Why didn't he donate some while he was alive ? I think he probably had issues.


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## Eclectic12 (Oct 20, 2010)

sags said:


> ... The guy in the story had 8 million dollars.
> Why didn't he donate some while he was alive ? I think he probably had issues.


A lot of people can't adjust to balance ... after a long time of spending little, it becomes a habit and does not occur to the individual that they should change.

The one I shook my head at was the US lady who died leaving $6 million to her cat.


Cheers


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## Just a Guy (Mar 27, 2012)

It's hard to switch. I started off debt free, before getting injured, and had very few worries about money, which was a big mistake when I lost the ability to work for several years. When I was dead broke, I worried every day about money. After a while, I starrted to realize that my investments had done really well, and that I could easily live off my passive income...but I still have a nagging fear in the back of my mind (quieter now, but still there) that says you could lose everything again (even though my current situation is much more diverse than before and the passive income is there). 

My uncle lived through the Great Depression and was always affected by it...

Some experiences leave their marks...it's not always mental illness.


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## Toronto.gal (Jan 8, 2010)

sags said:


> 1. *total scams *like Bre-X and Bernie Madoff.
> 2. The guy in the story had 8 million dollars. Why didn't he donate some while he was alive? *I think he probably had issues.*


*1.* This story isn't about scams, but about generosity!
*2.* You once said you like to spend every cent you can put your hands on, so do you have issues also? 

What about the big spenders who are featured in articles, who have no idea how they will survive their retirement years without a few millions, do they have issues also in your opinion? 

Mr. Read obviously understood the magic of compounding, and not to benefit him but others; what 'transformative' bequests he left indeed! The hospital/library could have been places that he might have given richly while alive also, with his time. Perhaps he was appreciative for what those places may have done for him!

How much do you reckon the spenders donate at any time in their lives? There are those that can't understand how/why a person would prefer to live frugally, and I find that more puzzling.


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## gibor365 (Apr 1, 2011)

> There are those that can't understand how/why a person would prefer to live frugally, and I find that more puzzling


 Very true! ... and I don't understand "spenders"... how people full of debt wasting money ...
Probably this is because of my backgrounds.... if you lived in CCCP, you have different approach to $ ?!


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## Rusty O'Toole (Feb 1, 2012)

sags said:


> Not to mention total scams like Bre-X and Bernie Madoff.
> 
> The guy in the story had 8 million dollars. Why didn't he donate some while he was alive ? I think he probably had issues.


Why didn't he buy himself a new suit and a steak dinner? Why didn't he die in Las Vegas with a champagne bottle in one hand and a whore's tit in the other?

Had issues, lol.


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## sags (May 15, 2010)

I wouldn't leave 8 million dollars and hope the beneficiaries spent it on the intended purpose.

They have a way of forgetting where the money came from and embark on their own dreams and ambitions.


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## Toronto.gal (Jan 8, 2010)

With the name Read, his library donation of $1M+ made perfect sense, as did his nearly $5M gift to the hospital; he also made several smaller donations.

Generous & smart. RIP!


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## sags (May 15, 2010)

He certainly was an astute investor and very generous with his gifts.

Hopefully, the hospital and library will establish a trust fund in his name and use the interest from the fund to improve services forever.

It would be interesting to learn of his investing over the years.

I wonder if he owned Berkshire shares............50 shares purchased at a cost of $1,000 in 1967, would be worth about $8,000,000 today.


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## Beaver101 (Nov 14, 2011)

indexxx said:


> I've always maintained that, to a point, it doesn't really matter what you do for a living or how much you make. *It's all about how you manage it*. I've been a bartender/bar manager my whole life, average earnings I guess. Often not working to travel for months at a time, recklessly spending money on guitars and other comforts but I've also been investing patiently for 20 years or so. Don't think I'll ever had $8 million like the guy in the story, but I own a condo in the Vancouver area, travel well, and will retire reasonably. *And I've lived hard and fast and enjoyed it along the way*.


 ... +1 :encouragement: and so you do have a life! :biggrin:



Eclectic12 said:


> *A lot of people can't adjust to balance ... after a long time of spending little, it becomes a habit and does not occur to the individual that they should change. *
> The one I shook my head at was the US lady who died leaving $6 million to her cat.
> 
> Cheers


 ... totally agree. In fact, I know a few people who lived/lives like that.



sags said:


> *I wouldn't leave 8 million dollars and hope the beneficiaries spent it on the intended purpose.*
> They have a way of forgetting where the money came from and embark on their own dreams and ambitions.


 .. not sure why you would care about this after you've gone to heavens? 

In this case, I wonder why there is no mention of the 2 step-"children" getting an inheritance or any of the proceeds? too bad.


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## Beaver101 (Nov 14, 2011)

Toronto.gal said:


> With the name Read, his library donation of $1M+ made perfect sense, as did his nearly $5M gift to the hospital; he also made several smaller donations.
> 
> *Generous & smart*. *RIP*!


 ... +1. But I think he should have splurged a little too. And then each to their own.


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## donald (Apr 18, 2011)

Your dead on just a guy
also being a investor myself a portf can take a life on to it's own
Maybe he just keep seeing opportunities in the market?(instead of spending)re-investing always?
I know for a fact there is a dopamine high receiving dividends/gains/distributions
I know for me i always have a nice feeling seeing my acct grow/accumulate(it's like the ultimate crossword puzzle,the markets and it is challenging and rewarding(money can't buy that if he was truly engaged and obviously he was)
anyways interesting story


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## sags (May 15, 2010)

I assume the stepchildren were left a significant amount, or they no doubt would have challenged the will.


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## Causalien (Apr 4, 2009)

sags said:


> I assume the stepchildren were left a significant amount, or they no doubt would have challenged the will.


Mr. Read is a perfect exame if why you should pick stocks.

Sometimes something is done for the pure joy of it. Cutting wood is a very enjoyable activity. I can do for days at a time. That and cooking for people.


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## carverman (Nov 8, 2010)

Rusty O'Toole said:


> This kind of story comes up every year or 2. Always someone with a modest income, who lived their whole life as if they had no money at all,* invested their savings and died worth millions. Always over 90 years old too*.


It's like the old saying.."he who dies with the most---wins!" :biggrin:
Of course the reality check is that you come in the world with nothing and you leave with nothing.



> It shows the power of compounding modest investments at average returns over long periods of time. Of course we never hear of the ones who *invested their savings in Northern Telecom*, *Johns Manville, or Eastman Kodak* all of which were blue chip investments at one time.


They were too big to fail..or so a lot of investors were told..and in their hey day in the 90s. they and their investors were flying high, making money hand over fist..but like everything else, there comes a time where the good times are over and everyone has to pay the piper.

Target should included here as well. They owe billions in the state of bankruptcy.


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## Eclectic12 (Oct 20, 2010)

^^^^^

Why should Target be included?

I can't recall Target Canada being listed on a stock exchange.
Target USA is listed on the US exchanges but has not declared bankruptcy AFAICT.


Cheers


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## namelessone (Sep 28, 2012)

Rejoice to his generous donation!
I estimate his compounded annual return is 15% over 42 years with $10000/year(in today's dollar) annual investment.


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## CrashTestSnoopy (Jan 21, 2015)

Eclectic12 said:


> A lot of people can't adjust to balance ... after a long time of spending little, it becomes a habit and does not occur to the individual that they should change.
> 
> The one I shook my head at was the US lady who died leaving $6 million to her cat.
> 
> Cheers


I knew someone who grew up poor and became very wealthy but would still just eat pho most of the time rather than at expensive restaurants. He would always take home anything he did not finish. It's a good quality to have to always remember how tough it was back then and also to remember that people in other parts of the world are constantly starving. 

As for the lady leaving 6mil to her cat, I can definitely picture someone who had lost hope in humanity and the only comfort she had while living was from her cat. In her perspective, only the cat deserved it.


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## Eclectic12 (Oct 20, 2010)

I'm not sure the person you are mentioning is similar as "most of the time" implies that they would eat at an expensive ... or even a medium priced restaurants. The type of person I'm referring to, has to be arm twisted to do so and even where someone else is paying - is uncomfortable. Basically, they have spent so much time stretching their dollar that it is painful to spend it.


As for the lady leaving her fortune to her cat ... I don't recall there being the detail to figure out if she figured "the cat deserved it" or if there was any lost hope. Maybe it was so and maybe it was not ... the big thing for me was that the cat wasn't likely to live long enough to come close to using the estate so it seemed rather sad. I wonder where the estate would go after the cat died.


Cheers


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## sags (May 15, 2010)

A few details have been provided regarding how Mr. Read acquired the 8 million dollars.

Basically it was investing $300 a month for 65 years and receiving an 8% annual return.

He followed the Warren Buffet model of investing in big corporations that paid dividends.

John Deere, Bank of America, and GM were some of the stocks.

(The article doesn't say if he kept GM stock right into bankruptcy)

The library said he had no interest in any books on investing.

The message here may be that the best course of action is to keep investing simple.

Don't bother with diversification, rebalancing, indexing or reading different theories..........and just let it ride.

http://www.cnbc.com/id/102410730


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## sags (May 15, 2010)

Okay............so I invested maybe $100 a month (employer/employee) for 40 years into my CPP..........and should have the same 8% return on investment.

So where is the return from all my cash.........invested over the same period as Mr. Read ?

Current recipients who have paid over a long period of time (since the fund was started) are getting stiffed by the CPP.

We should be receiving a lot higher benefits than the piddly amounts we are.


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## cheech10 (Dec 31, 2010)

Why would you expect equity level returns from CPP? The risk tolerance is drastically different...


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## Toronto.gal (Jan 8, 2010)

sags said:


> 1. I invested maybe $100 a month (employer/employee) for 40 years into *my CPP*..........and *should have the same 8% return on investment.*
> 2. *The message* here may be that the best course of action is to keep investing simple.


*1.* LOL.
*2.* There are multiple messages actually - discipline/LBYM/paying urself first, etc., etc. Did you do any of those, or were you just counting on #1.


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## GreatLaker (Mar 23, 2014)

CPP is a defined benefit pension, meaning pension payments are based on contributions and years worked, not on investment returns.

You contribute about 10% of income (split evenly between employee and employer if not self employed) up to a ceiling of about $53k for up to about 40 working years. Then if you start taking the pension at 65 you get an indexed pension of about 25% of your final income (up to the same income ceiling), for as long as you live. If you take it early or later than 65 the payment is adjusted accordingly. If you work fewer years or make less than the ceiling you get less. I simplified it a lot, but conceptually that's how it works.

But the pension is for life, indexed. If you live longer than average, you win, if you die earlier you may feel ripped off but you will be too dead to care. The beauty of it is the longevity risk is transferred from the pensioners to the pension sponsor, but the pension sponsor retains the investment return risk. I am happy to have a portion of my income guaranteed for life and indexed, and I think most people that are not very wealthy should be as well.

A very good book is The Real Retirement by Fred Vettese and Bill Morneau if you want to understand where your income should come from in retirement. Another good one is The Third Rail by Bill Leech and Jacquie McNish if you want to see how some government pensions really get in trouble.


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## gladaki (Feb 23, 2014)

Butr, isnt time is different now


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## Eclectic12 (Oct 20, 2010)

cheech10 said:


> Why would you expect equity level returns from CPP?
> The risk tolerance is drastically different...


Risk tolerance is one of many factors ... another is the flexibility an individual has (choose not to buy, choose to over-concentrate on a sector/company) versus a fund that has to do something with the inflowing cash and may be bound by "only so much per sector" restrictions.

Then too - not being familiar with the early CPP history, I wonder if like many other programs, it was originally setup with the idea that few would be collecting compared to those working resulting in less professional investment management.


Cheers


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## sags (May 15, 2010)

Toronto.gal said:


> *1.* LOL.
> *2.* There are multiple messages actually - discipline/LBYM/paying urself first, etc., etc. *Did you do any of those, or were you just counting on #1*.


Actually, we counted on 4 times #1 (2 CPP and 2 private DB pensions) ....and noted that our private pensions pay a much higher return on our contributions, 3 times better than the CPP, despite contributing to the CPP for a much longer period of time. And of course there is OAS for each of us, for which we paid a lifetime of supplementary taxes...........but that benefit is subject to the whims of government, and there is no spousal benefits attached to it.

Discipline wasn't required and paying yourself first was mandatory

As to the comparative results between Mr. Read and the CPP..........and the difference in the benefit accrued to Mr. Read or CPP contributors.

This quote is from the CPPIB website............

_Every three years the Chief Actuary issues a report that reviews the financial state of the Fund and measures its sustainability. The most recent report (2013) projected that *CPP contributions will exceed annual benefits paid until 2022*.

The Chief Actuary concluded that “despite the projected substantial increase in benefits paid as a result of an aging population, the Plan is expected to be able to meet its obligations throughout the projection period and to remain financially sustainable over the long term.”

CPPIB’s sole focus is investing the assets of the CPP and we have built an organization to handle the tremendous growth of the Fund as it increases in the next decade. *Starting in 2023, the CPP is expected to begin using a small portion of CPPIB investment earnings to supplement the contributions that constitute the primary means of funding benefits.
*_

I have never seen a report that shows when 100% of the contributions and 100% of the investment returns will not be enough and the reserve fund will be tapped to pay benefits.

The size of the fund will be increasing.............while the number of beneficiaries of the fund will decline, when baby boomer recipients numbers start to decline.

The CPPIB are not constrained at all in their investment choices.

The fund has a great deal of investments in public equities, in Canada and around the world. They own stocks in many companies, some of whom pay dividends to the fund.

The CPP is also invested in private equity, real estate and infrastructure ventures.

The actuaries, including the chief actuary, .........only report on the current and future status of the fund, according to it's present structure.

They, and the members of the CPPIB itself, don't consider or answer questions involving the level of benefits, or the qualifying rules.

It isn't within their mandate or prerogative to inform the public or comment, that benefits should be raised, so I don't expect they will do so.

As I see it, the benefits should be significantly increased above the 25% of YMPE level.


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## RBull (Jan 20, 2013)

^you keep beating that drum sags. Maybe you can get it fixed in time for when I want to collect in 9 years or so.

Back on topic- Great story. Never judge a book by its cover.


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## Tawcan (Aug 3, 2012)

What a great story. Really neat to hear that he was just holding dividend paying stocks and let power of compounding work its magic.


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## PrairieGal (Apr 2, 2011)

I really enjoyed reading this story too. Just show what a lifetime of living frugally, and investing a small amount consistently over time can do. 



> It's hard to switch. I started off debt free, before getting injured, and had very few worries about money, which was a big mistake when I lost the ability to work for several years. When I was dead broke, I worried every day about money. After a while, I starrted to realize that my investments had done really well, and that I could easily live off my passive income...but I still have a nagging fear in the back of my mind (quieter now, but still there) that says you could lose everything again (even though my current situation is much more diverse than before and the passive income is there).
> 
> My uncle lived through the Great Depression and was always affected by it...
> 
> Some experiences leave their marks...it's not always mental illness.


My Dad lived through the Depression. He has a good pension, CPP and OAS and won't touch his nest egg. He scoffs at the $14.00 meals his senior's residence puts on, saying he could make a whole pan of lasagna for $14.00. I tried to convince him that there was the social aspect of it too, and to lighten up a little and enjoy his money, but he won't hear of it. 

He does believe in education, having been a teacher during his career, and has gifted each of his grandchildren $5000 when they went to post-secondary school.


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## Rusty O'Toole (Feb 1, 2012)

The lesson I get from this is, he was worse off by saving and investing. He scrimped and saved and denied himself things so he could invest the money and never enjoyed any of it. He would actually have been better off if he had spent it as he got it.

Now if the story said he started saving and investing in his twenties, and the accumulated money made the difference in retirement of just getting by or being able to travel, have a new car, new clothes, or enjoy a more active social life then I could see it. But apparently all he ever did was save money and eventually die and leave it to someone else.

I'm not knocking it if that is what you want to do but it seems kind of sad and pointless.


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## none (Jan 15, 2013)

Rusty O'Toole said:


> The lesson I get from this is, he was worse off by saving and investing. He scrimped and saved and denied himself things so he could invest the money and never enjoyed any of it. He would actually have been better off if he had spent it as he got it.
> 
> Now if the story said he started saving and investing in his twenties, and the accumulated money made the difference in retirement of just getting by or being able to travel, have a new car, new clothes, or enjoy a more active social life then I could see it. But apparently all he ever did was save money and eventually die and leave it to someone else.
> 
> I'm not knocking it if that is what you want to do but it seems kind of sad and pointless.


Funny, because I think you come as a little sad and pointless (often).

Who are you to say that this person didn't enjoy his life? Perhaps he reaped tremendous satisfaction and pleasure knowing that this financial legacy was going to make the world a better place?

Some people actually derive real pleasure from helping other people.


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## Rusty O'Toole (Feb 1, 2012)

I often am sad and pointless, that is how I know it when I see it.


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## Parkuser (Mar 12, 2014)

Rusty O'Toole said:


> The lesson I get from this is, he was worse off by saving and investing. He scrimped and saved and denied himself things so he could invest the money and never enjoyed any of it. He would actually have been better off if he had spent it as he got it.
> ...
> 
> I'm not knocking it if that is what you want to do but it seems kind of sad and pointless.


Well, he was not winning in the "who has the most toys" game because he was playing and winning the financial game. Winning the game he was playing made him happy. Money was just a way to keep score. Being happy is more important than having toys IMHO.


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