Hetty Green knew a thing or two about making money. “A millionaire a hundred times over, she made made her mark beside Carnegie and Morgan, Vanderbilt and Rockefeller.”
Oh yea, and she did this in an era when women were traditionally excluded from all business dealings.
Janet Wallach's biography of Green, The Richest Woman in America: Hetty Green in the Gilded Age, tells the story of her extraordinary life. Hetty's principles, on life and investing, are as relevant today as they were during the late 1800s
“Never losing faith in America's potential, she ignored the herd mentality and took advantage of financial panics and crises. When everyone else was selling, she bought railroads, real estate, and government bonds. And when everyone was buying and borrowing, she put her money into cash and earned safe returns on her dollars. Men mocker her and women scoffed at her frugal ways, but Hetty turned her back on them and piled up her earnings.”
“Cash combined with courage in a crisis, is priceless.” — Warren Buffett
Hetty had a way of stirring the pot, much the same way as present-day billionaire Charlie Munger. Her reputation for harshness was based on her independence, outspokenness, and disdain for the upper crust of society.
“She was,” writes Janet Wallach, “a woman alone in a world of envious men.” And she certainly wasn't going to follow the men.
Everyone but Hetty seemed to be buying. She did not buy industrials, she said, and never bought with borrowed money. Once in a while she cornered a stock like Reading Railroad, but that was the exception, not the norm. “I don't believe in speculating as a rule, and I don't speculate as much as people think.” Her approach was far more cautious: “When good things are so low that no one wants them, I buy them and lay them away in the safe; when owing to some new development, they go up and my shares are so needed that men will pay well for them, I am ready to sell.”
Hetty experienced several financial panics during her lifetime. She believed they offered valuable lessons for the future: “exaggerated expectations, wild speculation, and high leverage would lead to disaster.”
Indeed, Hetty's wisdom was well ahead of its time:
“There's one reason why we have hard times: money easy coming and easy going. American children are not taught how to save money but how to spend it. Everything they want—give it to them so long as you know the price of the credit. That's the policy of the modern mother and she is raising a nation of spendthrifts whose one thought is to get what they want when they want it.”
The wisdom of Hetty Green is as relevant today as it was during her time.
Before deciding on an investment seek out every kind of information about it.
Watch your pennies and the dollars will take care of themselves.
After your business is over you may take your colleague to dinner
and the theater, or allow him to take you, but wait until the
transaction has been closed and the money paid.
Before making a deal, if anyone is fool enough to offer you the
full amount, take it. If you are offered less, tell the man
you will give him the answer in the morning.
Think the matter over carefully in the evening. If you decide that it
will be to your advantage to accept the offer, say so the next day.
In business generally, don't close a bargain until you have
reflected on it overnight.
The secret of good nursing is common sense, just as common sense
is the secret of making money.
What man has done, women can do.
It is the duty of every woman to learn to take care of
her own business affairs.
An ordinary gift to be bragged about is not a gift
in the eyes of the Lord.
Some young women do better in business than men.
A girl ought to be careful about the man she marries,
especially if she has money.
A girl oughtn't to marry until she's old enough to
know what she's doing.
When good things are so low that no one wants them, I buy
them and lay them away in the safe; when owing to some new
development, they go up and my shares are so needed that men
will pay well for them, I am ready to sell.
I am always buying when everyone wants to sell,
and selling when everyone wants to buy.
If one can buy a good thing at lower cost than it has ever sold for
before, he may be fairly sure of getting it cheap.
Every girl should be taught the ordinary lines of
Railroads and real estate are the things I like.
Government bonds are good, though they do not pay
very high interest. Still, for a woman safe and low
is better than risky and high.
Common sense is the most valuable possession
anyone can have.