This is an Amazing Compound Interest Story, In 2020, students and faculty of Lake Forest College in Illinois held a quiet remembrance in honor of Grace Elizabeth Groner, a philanthropist who endowed the school with $7 million when she passed away in 2010. Groner’s wealth mostly flew under the radar during her 100-year life, which is why Lake Forest College administrators were quite surprised when they learned about the generous endowment left by this kind woman.
Amazing Compound Interest Story of Grace Elizabeth Groner
Born in 1909, Groner was adopted by a Lake Forest family who knew her parents. Shortly after graduating from college, she took a job at Abbott Laboratories, a pharmaceutical giant that has been making news headlines related to the development of a rapid antigen test that can detect SARS-CoV-2; the test can be used at home and is scheduled for mass shipment in 2021. Groner started out as a secretary, and she held that administrative position until retirement.
Groner’s Stock Portfolio Strategy
A few months after she started working at Abbott, Groner purchased three shares of the company, which at the time was trading around $60. Groner’s stock portfolio was driven by two investment strategies: Long-term holding and disciplined compound interest. Each time ABT stock paid dividends, she reinvested them for the purpose of accumulating more shares. As can be imagined, ABT went through multiple splits during Groner’s lifetime, thus increasing the size of her portfolio. She never married and kept a low profile; she was also known to be frugal and a generous donor to charitable causes.
The $7 million realized by Groner’s compounding of ABT stock cannot be called passive investment. She worked her entire life and contributed to her portfolio. There were many opportunities for Groner to explore other potential investments, but she held on to her portfolio with the discipline of Warren Buffett. We can all learn from Groner’s approach to investing and money management; she was not a Wall Street investment banking wizard, but she outperformed quite a few experts. When it comes to investing, the bottom line is not how much you know about it, but how you behave as an investor.