This post is another installment in our recurring series, “Retiring Wealthy On An Average Salary“.   To see the other installments, please click on the link in the navigation bar above.    The idea behind the series is to highlight the stories of average folks who made good decisions in order to be able to retire wealthy – even though they made an average salary during their working years.  The hope is that it will help to inspire the rest of us as we continue on our own journeys of building wealth.

Today I want to highlight the story of one woman, who flew under the radar much of her life, only to give away millions of dollars when she passed away. I'm going to call this one “The Story Of The Saving Secretary”.

The Story Of The Saving Secretary

Grace Groner was  a simple woman who lived a frugal lifestyle.   She never owned a car, and shopped at rummage sales.  She worked for many years as a secretary, and only after she passed away did people realize that she was a multi-millionaire.

She lived in a tiny one-bedroom cottage in Lake Forest, Ill.She bought her clothes at rummage sales, didn’t own a car and worked most of her life as a secretary for a pharmaceutical company.

Yet after her death at age 100, Grace Groner left Lake Forest College a gift of $7 million to be used for scholarships. The money came from three shares of stock she bought–and held on to–in 1935.

“She did not have the (material) needs that other people have,” William Marlatt, her attorney and longtime friend told the Chicago Tribune. “She could have lived in any house in Lake Forest but she chose not to.…She enjoyed other people, and every friend she had was a friend for who she was. They weren’t friends for what she had.”

Ms. Groner seemed to have plenty of friends, but they were close friends because of who she was and not because of what she had. Many of them didn't even know how much she had. Her lifestyle didn't really give any clues to the fact that she was wealthy.

While Ms. Groner did end up retiring wealthy, how she did so may not be something we would necessarily want to emulate. In some respects she ended up being very lucky.

Ms. Groner’s story might seem like a classic Millionaire Next Door fairy tale–the thrifty, conservative, hard-working saver who hoards pennies over a lifetime to accumulate vast wealth. And that is certainly part of the story. Aside from occasional trips, Ms. Groner was rigorously frugal due to her Depression-era upbringing. (Not having a husband or children may have also helped her savings rate.)

Yet the way Ms. Groner garnered her wealth was, in fact, more like one big, lucky gamble than a lifetime of scrimping and saving.Ms. Groner worked for 43 years as a secretary for Abbott Laboratories. In 1935, she bought three specially issued shares of Abbott for $180. She never sold a share, even after repeated stock splits. She also kept reinvesting the dividends. By the time of her death, she owned more than 100,000 shares valued at about $7 million.

As David Roeder of the Chicago Sun-Times points out: “It is a grave error to put your nest egg behind a single company, and it is worse when the company is your employer. Groner had a winner, but others have done this with Enron, General Motors or Bear Stearns.”The all-in-one basket strategy was, of course, a grave error for employees of Enron and others. And financial advisers love to herald diversification, which didn’t turn out so well for many investors during the financial crisis.

But Ms. Groner’s story shows that savings alone probably doesn’t get you to $7 million. It seems that loading up on a one single investment and getting tremendously lucky over a long period of time can get you there. But don’t count on it.

So basically she became so wealthy because she saved religiously, but especially because she bought 3 specially issued shares at $60 a piece back in 1935.  She never sold the shares, and it doesn't sound like she diversified at all.  In the end she was very fortunate that the company she worked for didn't have problems, because if it had she may have ended up losing her entire fortune.

While I wouldn't suggest others try to get wealthy in the way that Ms. Groner did, I still think her story bears out the importance of valuing relationships over money, of not buying things you don't need, saving and investing (although her specific strategy I wouldn't recommend).

What do you think about her story? What keys do you pull out of this story?  Tell us your thoughts in the comments.

Last week I published the first post in a series I'm calling “Retiring Wealthy On An Average Salary”. The series is intended to give us a brief glimpse into the lives of some average people who made average salaries, but still managed to retire with a net worth that we would say makes them wealthy. My intention in writing the series is to help people realize, you don't have to be a celebrity or a doctor in order to retire comfortably. Instead, you just have to work hard, have a plan, and save and invest diligently.

Last in this series, we told the “Story Of The Thrifty Engineer“. This week I want to talk about the story of a thrifty teacher who was able to save a fortune on a teacher's salary, and later give it all away to help others.

The Story Of The Altruistic Educator

Edna Diehl, was a Davison, Michigan woman who spent almost 3 decades as a teacher and counselor at the city's high school.  She was known to be a serious educator that didn't take any nonsense from her students.  She pressed them to succeed and do well in whatever careers they pursued.  Former students have also stated that she had a soft side, and showed how she cared deeply for them and wanted them all to do well in their lives.

Edna and her husband (who had no children) were also careful with their income, and made sure to save and invest their money regularly over the years. The result was that they had amassed a fortune of well over a million dollars by retirement.

Instead of spending all of that money as some might have done, Edna decided that once she passed her fortune would be used to fund college scholarships for the district she had taught in.

DAVISON, Mich. — A woman who spent 29 years as a teacher and counselor at the city high school has left $1.3 million to the school district.

Edna Diehl died in July at 88. The Davison Educational Foundation will hold the money in trust, with the interest to be used to fund scholarships.

The district expects the interest will generate about $60,000 a year, paying for two years' worth of college for five students every year, said Kevin Leffler, a school board member and foundation president.

Diehl and her husband, Ben, who died in 1997, had no children.

She was known as a serious, sometimes even strict, teacher at Davison High School. Former students said she cared deeply and wanted them to succeed in life.

“She was pretty serious most of the time. But she could also be fun outside of school,” Connie Olejniczak, a student during the mid-1960s, told the Flint Journal.

Diehl was known for her ability to raise money for student trips, colleagues said.

“I remember her having to count money all the time,” said Dick DeLoge, a retired teacher who worked with her for about five years.

Davison is 50 miles north of Detroit.

I'm sure it must have been a wonderful feeling for Edna to be able to give such a wonderful gift to the students of her district as she did. Being able to give $60,000 a year in scholarships is no small feat, and her hard work and forethought will mean a college education for many hard working students in her district.

How Can Even A Teacher Become Wealthy?

So how does someone become wealthy on a teacher's salary?  Education experts Mark C. Schug and William C. Wood offer their advice to teachers in an article on beyond-the-book.com. Their 3 rules for teachers:

• Start Early:  When you start saving early you have the benefit of having more time to enjoy the wonders of compound interest.
• Buy And Hold:  Spend less than you earn, and don't go into debt.   Save your money, and purchase investments, and then don't touch them.  If you withdraw your money you short circuit the gains you might have made due starting early and the wonders of compound interest.
• Diversify:  Don't put all your eggs in one basket, in other words, don't have all your money invested in one – or only a few stocks.  Instead diversify your holdings via low cost mutual funds.

They say that since teacher salaries start lower than some other professions, it is doubly important that they start earlier than others.  I think their advice would be applicable to most of us, however, not just teachers.  Start early, invest regularly and make sure you are diversified.

What do you think?  Does the example of the altruistic teacher give you hope that you could do the same?  Do you think it's possible to become wealthy on an average salary? Tell us your thoughts in the comments.