The Millionaire Janitor

Photo: The Millionaire Janitor

If you google a gentleman named Ronald Read, you will find a Wikipedia page that describes an American philanthropist, investor, janitor, and gas station attendant.

It’s a fantastic resume.

Read made headlines when he passed away in 2014 for having amassed an $8 million fortune after a lifetime of near minimum wage employment.

To quote Morgan Housel, Partner at the Collaborative Fund, savings is “the gulf between your ego and your income.”

He lived a frugal life, but for 55 years, Read invested the gulf between his ego and his income into dividend-paying stocks, constantly reinvesting his yield. Until his death, Read's friends and family had no idea of his net worth.

He left the bulk of his wealth to his local hospital and library, making him the most significant donor ever to each institution.

Never do today what you could put off for tomorrow.

I don’t know Read’s motives, but you could speculate that he had mastered delayed gratification. He became a millionaire janitor eight times over by putting today's pennies away for tomorrow.

In 1972, Stanford Professor and psychologist Walter Mischel created the “The Marshmallow Experiment.” In the study, a child was offered the choice of one marshmallow now or two in fifteen minutes. The child was left alone with the marshmallow and rewarded with two if, after 15 minutes, the initial marshmallow had not been eaten.

10, 20 and 30 years later, the Stanford team revisited the original participants to determine if any relevant trend had emerged. They found that consistently, those children who embraced patience in exchange for a greater reward scored higher when measured by the (imperfect) measurements of SAT scores, attained education and healthier Body Mass Index.

I am aware that I have abandoned my “skeptics hat” and am possibly being fooled by randomness here, but the empirical evidence in my own life supports the power of delayed gratification.

Motivation for the Future

Last fall, I dealt with a bit of a health crisis - I started feeling terrible on a daily basis. I couldn’t make it through a workout without feeling as if I would pass out, and I had a “body cold” for months that I couldn’t shake. Things came to a head when I started getting wild heart palpitations during a sales call, I almost fell out of my chair (I love sales, but this was extreme).

I spent a full day in the cardiac ward getting analysis done, and the results indicated that my heart had been ageing at an extraordinary rate.

It turned out that I was one of the lottery winners who developed myocarditis (I promise this isn’t political). I learned that my heart had aged 20 years in the previous six months (It’s all better now).

Now “ageing” is an ambiguous explanation - what I was experiencing was substantial heart inflammation - thankfully (in my case) an entirely correctable condition, and mine has been entirely corrected. I had to take a four-month pause on all exercise, six months of heavy detox supplements, and substantial changes to my diet and sleep routine. But today, I feel better than ever.

However, there was a period of time when I didn’t know if or how solvable my problem was. This put me into a bit of a frantic state. I wanted to ensure that anything I could put in place for those I’d leave behind was in place.

I became laser-focused on pounding every dollar I could into long-term yield investments so that if I did end up checking out early, all my family would have to do, was collect.

Like most close calls - there are some key takeaways that I’ve kept with me. I’ve dropped the scarcity mindset but kept the new investing habits. We are an anti-fragile species; it is important to come out of the fire stronger than we went in.

Motivation for the Present

I am building my “Ronald Read” fund for the future, and I enjoy being frugal. But I also enjoy being frivolous. I do both.

My wife and I do an exercise together that identifies where disproportionate returns lie in relation to frivolous expenses. - The lifestyle conveniences we would make if money was not an object.

It's a fun exercise, and the items that appear might not be what you expect - and are likely far more attainable than you think. The individual who introduced this concept to me is an astonishingly successful author, and the top item on his list was never to have to travel with luggage. When he travels, he packs a bag and has it couriered from his house to his hotel so he can travel luggage free. I thought it was such a strange concept; I would never have thought of that - it didn’t resonate with me, but he loves it.

There are some super basic items on my list - my friends know how much I appreciate good coffee - and to me, that extends to the serveware. My mornings are an entirely different experience if I can drink my coffee from a small china cup complete with a saucer. It’s ridiculous, I am aware, but it gives me immense pleasure.

These are small conveniences that deliver a disproportionate amount of happiness. A Ferrari may also deliver satisfaction but not disproportionate to the cost. Here is an absolute truth - spending money to show other people how much money you have is the fastest way to have less money.

A more frivolous item is my sports coaches. There is a (close to) zero percent chance that I will ever become a professional athlete. However, I want to train like a professional athlete. This is a big item for me.

Lebron James spends over $2 million annually on conditioning coaches, nutritionists and physical therapists. His secret weapon is his head conditioning coach, Mike Mancias, who describes Lebron’s life as consisting of three things - “Lebron is either training, in therapy, or sleeping.” - His coach texts him every morning to check in on his previous night's sleep - anything under nine hours raises a red flag.

Michael Jordan had a similar “secret weapon” in his conditioning coach, Tim Grover. Jordan famously told Grover at the end of a season, “I don’t pay you to train me; I pay you, so you don’t train anyone else.” Despite this, Jordan made one exception and introduced Grover to the late Kobe Bryant. They worked together until Kobe’s retirement in 2016.

I don’t have $2 million to blow on athletic conditioning. But I can look for bite-sized chunks - I work with sports coaches that are disproportionately skilled for what I need. I like to kick-box, and as long as I can afford it, instead of joining a class with fellow recreationists (where I should be), I train 1:1 with a coach who trains UFC fighters. It is absolutely not necessary. But I love it.

I have a couple of all-mountain triathlons scheduled for this summer. By all means, any online programming is sufficient to get me race-ready, but I’m happy to put in some extra hours so I can work with a coach who frequently puts professional races on the podium.

Both of these coaches know that I am a goof who will not bring home a championship - but I love it, and they humour me. I feel like a professional athlete when I am in the pool cranking out laps. It’s worth every penny to me.

Give me a choice between an expensive tie or a session with my trainer - I know where my money is going.

Sitting down and getting honest about where your money should go prevents shortsighted impulsive decisions that you will regret later - but it also focuses on where you value what I call “life capital” - the high return life experiences unique to you.

I’ll build the Ronald Read fund for the future, but for the present, I’ll collect the scar tissue and adventures. Life is for living.

Strike the balance.

Happy Fathers Day,