Patience is a Concrete Value
By Michelle Kuehner
I went to the River Walk in San Antonio with our family a few years back. During that time, we stopped at a local restaurant for a quick snack in between our stroll. Despite being unable to recall the name of the restaurant, I remember leaving and seeing a street crew of six encircling a car in the middle of the street... in cement.
Because the driver was in a rush and wanted to save some time, they disregarded the warning signs and attempted to drive around the street barricades. However, they ended up getting stuck in a large section of concrete that had just been poured. The haste with which they approached the situation resulted in the loss of more time as well as, I guess, a significant amount of money. I suppose the expression "patience is a virtue" does make sense.
In a book written by Morgan Housel called The Psychology of Money, Housel explains just how much of a role patience played for Ronald James Read, a philanthropist, investor, janitor, and gas station attendant, according to his Wikipedia page.
Ronald Read was born in a small town in Vermont. He was the first person in his family to graduate from high school, which was especially noteworthy considering he hitchhiked four miles to campus every day. For 25 years, Read repaired cars at a gas station and swept floors at JCPenney. At the age of 38, he bought a two-bedroom house for $12,000 and lived there for the rest of his life. He was widowed at age 50 and never remarried. One of his friends mentioned that his main hobby was chopping firewood. People who knew Read had little more to say about him. His life was as low-key as it could be.
Read passed away in 2014 at the age of 92. The ordinary rural janitor gained international notoriety when he bequeathed over $6 million to his local hospital and library and $2 million to his stepchildren in his will.
People who knew Read were shocked. How did he amass such wealth? It turned out there was no mystery at all. Neither an inheritance nor a lottery windfall existed. Read invested in blue-chip stocks and saved what he could. Then, he sat for decades, watching as the small sums accumulated to more than eight million dollars.
The theory behind long-term investing is that a person can profit from the long-term growth potential of their investments while weathering short-term market swings. That was Read's secret sauce.
This strategy is known as dollar cost averaging, and it involves investing a fixed amount of money at scheduled intervals, regardless of market conditions. By purchasing a larger quantity of shares when prices are low and a smaller number of shares when prices are high, it seeks to mitigate the effects of market volatility.
Mr. Read demonstrated that it does not require a significant initial commitment, but rather patience, consistency, and discipline on the part of the individual. By taking shortcuts, you run the risk of finding yourself in a situation that is difficult and expensive to escape from, much like the driver stuck in the concrete.
