Anne Scheiber: The Secret Stock Multi-Millionaire

Anne Scheiber is an investing legend but unlike other investing gurus you’ve probably never heard of this ‘secret’ multi-millionaire. Over 51 years she amassed a fortune of 22 million dollars; kickstarting her first self-directed investing account with just $5,000 in 1944. 

A true investing outlier, Anne never earned more than $3100 a year, she lacked any visible sign of wealth. Her fortune was unknown to anyone (except her attorney and stockbroker) until after her death in 1995. 

I think Anne’s financial story is a fascinating one – her approach epitomises the value of sensible long-term investing.

Let’s take a look at some of the investing habits that made Anne a millionaire…..and caution on taking things too far in the pursuit of wealth. 

Anne didn’t fear the stock market and took control of her own investments

In Anne Scheiber’s era, many of her peers shied away from investing after being burnt in the Wall Street crash of 1929. 

Not Anne. Despite also suffering losses in the1930s due to bad advice from her stockbroker, she took matters into her own hands. 

Opening a Merryl Lynch account in 1944 (the same year she retired at age 50) she deposited her life savings of $5,000. 

She then took control of her own investment choices and continued to take a self-directed investing approach for the next 51 years, until her death in 1995.

Buy-and-hold strategy turned Anne into a millionaire

Annes investing strategy is proof that investing doesn’t need to be complicated. Fiercely committed to her simple, no frills buy-and-hold approach strategy, Anne quietly built her multi-million dollar portfolio. 

Buy-and-hold is a passive investment strategy where an investor buys stocks and holds them for a long time (decades) regardless of how the market fluctuates.

With so much time on her side, Anne was able to successfully ride out the ups and downs. Her approach was to hang tough and seldom sell. At one point in the 1970s, Anne’s stockbroker recalled her portfolio was down 50% but she still didn’t sell.

Patience and the ability to make non-emotional decisions are trademark characteristics of successful buy and hold investors. Anne Scheiber definitely had both.

She is reported to only have bought companies she was familiar with and reinvested all her dividends without fail.

Rather than seeing stocks as ticker symbols on a graph, she understood that stocks represented a real stake in a company. This led her to think with the long-range vision of an owner, not a day trader.

Time was on her side

Anne was 101 when she died and her longevity gave her investments an enormous amount of time in the stock market.

While it’s reported that Anne took control of picking and managing her own stocks at age 50 with a $5,000 lump sum, there is evidence that she started investing earlier than 1944 – her attorney and estate executor said she likely started with $21,000 in 1936.  

That equates to 50+ years in the market. 

Anne understood the power of compounding and her story is the perfect example of how time in the market, rather than timing the market, really pays off in the long run.

Anne was determined and persistent (even when the odds were against her)

By all accounts, Anne was one very determined woman. 

Growing up in poverty, she did all she could to make life better for herself –  saving enough to put herself through law school before she started working at the IRS.

She stayed with the IRS as an auditor throughout her 23 year career and reportedly, although she excelled at her work, she faced a lot of gender discrimination. Due to this she was never promoted and never earned more than $4,000 a year.

But Anne was determined to create wealth for herself. She was willing to fight and do what it took to create her financial independence. 

I think this kind of determination is something we all need at some stage (or various stages) along the path to creating financial independence. It’s not easy, it takes commitment and sometimes it might seem like the odds are against us…..but it CAN be done. 

She saved as much as 80% of her income

At one point Anne Scheiber was reportedly earning more than $200,000 a year in dividend income but despite her millionaire status, she continued to live very frugally. 

According to her attorney, Anne had an incredibly high savings rate, putting away as much as 80% of her income for investing. She wasn’t married and didn’t have children, so this obviously helped increase her capacity to save but so did her frugal approach to living. 

Probably a little too frugal for most of us. Understatement of the year!

It’s said she wore the same clothes for decades, rarely left her rent-controlled apartment in NYC and as a recluse, had no social life to speak of. 

I think the cautionary side of the Anne Scheiber story is that focusing on building wealth to the exclusion of all else, will leave you, as reported by the few that knew Anne, very unhappy.  

Don’t get so focused on the destination that you lose the joy along the journey necessary to get there.

The Down Side of Anne Scheiber’s Lifestyle

While Anne might be on the extreme end of frugality, there’s a lot to be said for the power of simplifying your spending in the pursuit of building your financial freedom fund. 

You don’t need to wear the same clothes for 3 decades but prioritising your expenses and making smart financial sacrifices will speed up your journey to financial freedom. 

So, what happened to Anne Scheiber’s millions? 

She donated her $22 million fortune to Yeshiva University’s Stern College for Women; who had never heard of her. 

Her attorney said the donation came from her desire to help Jewish women battle the kind of discrimination she felt she had encountered during 23 years with the I.R.S. 

The Anne Scheiber scholarship was established thanks to her extraordinary donation. 

It’s undeniable Anne’s final philanthropic gesture was incredibly generous and left a huge legacy. Personally, though, I’d prefer to enjoy life more than it sounds like she did and show generosity to those I love and causes I support while I’m still around. 

Building a legacy for my family is one of my biggest financial goals but I want to enjoy it with them too. 

That said, there’s a lot we can learn from quiet millionaire Anne Scheiber’s sound approach to investing, wouldn’t you say?