How many people would celebrate a 6% return? It may not seem like much, but that’s what it took to turn $5 million into $100 million over a 51 year period.
It’s also a true story.
Through a combination of investments in loans and mortgage, real estate stretching across the country (was once the single largest real estate owner in Chicago), corporate bonds, railroad holdings, banks, and a gold mine, one person turned an impressive inheritance into a fortune that would make them one the richest in America.
And she did it despite the cultural norms of the time.
Hetty Green was born in 1834, into a wealthy Quaker family with a successful whaling business. What she learned about business, she first learned from her grandfather, helping with his daily correspondence, and later doing the same for her father.
The numbers are a conservative estimate. When Hetty died in 1916, she was valued somewhere between $100 to $200 million (roughly $2 to $5 billion today).
Her nicknames “The Queen of Wall Street” or “The Witch of Wall Street” represent the dichotomous views of her at the time. She was an oddity — the richest woman in America — at a time when women had few rights and were meant to “stay home.”
The oddity of it all made her a target for the press (which makes it harder to separate rumor from fact). She gets painted in one instance as a smart, shrewd businesswoman and in another as an eccentric, crazy miser.
After reading a few interviews she did, I think the truth lies closer to shrewd businesswoman. She was part of the group led by J.P. Morgan to fend off a run on the banks during the Panic of 1907.
Rightly so, Hetty defied the norms. She was as business-savvy as the most successful men on Wall Street and she knew it:
I am able to manage my affairs better than any man could manage them; and, what man has done, woman can do. If I had let other people do my business for me, I most likely wouldn’t have had any business to do now, and it is the duty of every woman, I believe, to learn to take care of her own business affairs.
She had a few other things to say as well.
On why investing starts with saving.
No person can invest unless he has the wherewithal. Most great fortunes have been started by men who saved and saved and saved, and finally had a few hundred or a few thousand dollars to invest whenever the opportunity should come.
On the Panic of 1907 or being ready (and willing) for opportunities.
I saw the situation developing three years ago, and I am on record as predicting it. I said then that the rich were approaching the brink, and that a panic was inevitable.
There were signs which I could not ignore. Some of the solidest men of the Street came to me and wanted to unload all sorts of things, from palatial residences to automobiles. The New York Central quietly negotiated with me for a big loan, and that made me sit up and do some thinking…
I saw the handwriting on the wall and began quietly to call in my money, making a few new transactions and getting into my hands every available dollar of my fortune against the day I knew was coming…
When the crash came I had money, and I was one of the very few who really had it. The others had their ‘securities’ and their ‘values.’ I had the cash and they had to come to me. They did come to me in droves. Some of them I lent money to, and some I did not. That was my privilege. Those to whom I loaned money got it at 6 percent. I might just as easily have secured 40 percent. But never in my life, no matter what has been said against me, have I practiced usury, and no one knows it better than the wealthy men who have had business dealings with me.
On depressions, the cycle of public sentiment, and American business.
Personally, I have faith in American business institutions, and as soon as this faith spreads again to the people the financial depression will be a thing of the past, and not till then.
It was caused by this very lack of faith: A good many things contributed to the loss of confidence.
On not sweating the small stuff.
One of my rules of my life is never to worry uselessly about things. I am just as ready as ever to stand up for my rights, and I do the best I can every day as I go along. But after having done a thing, my policy is to let it drop and take up something else. The result is that business never disturbs me after business hours; mever makes me lose any sleep, in other words.”
On how she viewed her money.
I regard my property largely as a trust. It is not mine absolutely. I take care of it on much the same principle as you would foster a valuable animal in your charge. Of course my attitude in the premises was inherited. My father believed that the money left to one should be given over undimished to the next generation. That also is my idea.
He believed that one who inherited property had the right to spend the income it yielded, but not waste the principal.
On her secret to business success.
About all that can be said is that my investments have been carefully chosen and have turned out well as a rule. A fortune can not be built up around any fixed idea or, in other words, without the exercise of plain common sense. I buy when things are low and no one wants them. I keep them…until they go up and people are anxious to buy. That is the general secret to business success. One thing, however, has been wrongly attributed to me, and that is speculating. I never speculate. Such stocks as belong to me were purhcased simply as an investment, never on margin.
You see I believe in using common sense in business. Before deciding on an investment I therefore seek out every kind of information about it. There is no great secret in fortune making. All you have to do is buy cheap and sell dear, act with thrift and shrewdness and then be persistent.
Why Women Don’t Get Rich – NY Times 1901
Hetty Green Talks Cash and Politics – NY Times 1908
Seventy Years Rest Lightly on Mrs. Hetty Green – NY Times 1905
Hetty Green: A Character Study – National Magazine 1905