Earlier this week, the New York Times ran a front-page story on Sylvia Bloom, the recently deceased legal secretary from Brooklyn who bequeathed $6.24 Million to help disadvantaged students afford college. Ms. Bloom was the epitome of the Millionaire Next Door and readers of this blog know I believe strongly in the ability of us “regular folk” to become one too by following a few simple rules: 1) Live beneath your means; 2) Save for your financial independence; 3) Invest; 4) Get wealthy the old-fashioned way, steadily over many years.
The Times article described Ms. Bloom’s relatives as shocked that she had amassed such a fortune. She never talked about her wealth because, according to her niece, “I don’t think she thought it was anybody’s business but her own.” In other words, her wealth wasn’t amassed to impress her friends or to purchase expensive earthly possessions. She, apparently, wasn’t motivated by nice cars, fancy vacations or a large, Manhattan apartment.
We will probably never know what truly motivated Ms. Bloom, but we can learn from her wealth accumulating strategy. “She was a secretary in an era when they ran their boss’s lives, including their personal investments,” recalled her niece Jane Lockshin. “So when the boss would buy a stock, she would make the purchase for him, and then buy the same stock for herself, but in a smaller amount because she was on a secretary’s salary.” Morgan Housel from The Motley Fool says, “…you can build wealth without a high income, but have no chance without a high savings rate, it’s clear which one matters more.” Ms. Bloom didn’t make big money, but she still accumulated big money.
A child of the Great Depression, Ms. Bloom and her husband, a firefighter, lived modestly and, according to her niece, “…she knew what it was like not to have money.” I suspect that she was motivated to save money for the same reason a lot of us are – because savings offers some peace of mind in a very unpredictable world.
I won’t ever discount creature comforts like a nice home, a functional car or a fun vacation – those things are important. But, savings provides us value too, the value of control of our time. It’s not easy to measure something that we probably won’t use until years later, but how valuable is flexibility? The flexibility to maybe take a few years off work when your kids need you the most; the flexibility to maybe take a job with a lower salary but more purpose; the flexibility to maybe leave a lasting legacy of a college education for people you will never meet – like Sylvia Bloom did.
To quote Morgan Housel again: “In a world where hard skills become automated, competitive advantages tilt toward nuanced and soft skills – like communication, empathy, and, perhaps most of all, flexibility. Having more control over your time and options is becoming one of the most valuable currencies in the world. That’s why more people can, and more people should, save money.”