Here in Chicago, a lot of us are asking questions about Grace Groner (pictured), the elderly "secret millionaire" who gave $7 million to Lake Forest College, her alma mater, when she passed away in January. Allow me, a Chicagoan and the editor of the Money College, to step in and answer some frequently asked questions.
Q. How did a 100-year-old lady save $7 million?
A. The short answer is that Groner made a $180 stock purchase in 1935 in Abbott Laboratories, where she would work as a secretary for more than four decades. What's more, she avoided driving in Chicago, where parking meter rates quadrupled in 2009.
Q. Is it true she lived in a one-bedroom house in Lake Forest, Illinois?
A. Correct. And if you have ever visited Lake Forest, which has about two mansions for every four residents, she was probably the only person who lived in a one-bedroom house in Lake Forest.
Q. Is it true the "A Team's" Mr. T once lived in Lake Forest?
A. Yes, though it's hard to say how often he sipped tea and ate scones with Ms. Groner.
Q. Is Lake Forest College a good school?
A. Absolutely. The liberal arts college, where Ms. Groner graduated in 1931, has a reputation for generous student aid and small class sizes. It was founded in 1857, meaning it was less than 75 years old when Groner graduated there; 1,400 students attend today.
Q. But is there an irony here?
A. Yup; Lake Forest College, like its ultra-wealthy citizens, is not exactly cash poor ... while some community colleges in Chicago -- OK, a whole lot of them -- could use even 7 bucks, let alone $7 mil. (If you're wondering which ones, just look in the school coat of arms for a picture of a bullet-proof vest.)
Q. Is it true Mr. T attended Lake Forest College?
A. No. But he did once cut down all the trees in his front yard, causing an uproar in this toniest of North Shore towns. He claimed he was allergic to trees.
Q. So what becomes of Ms. Groner's house?
A. It becomes a one-bedroom residence for female students of future Lake Forest College classes. The money she donated will set up a foundation to help students pursue internships and study-abroad opportunities.
Q. What would that $7 million have been worth in 1935, when Groner bought the stock?
A. About $475,000, based on Consumer Price Index conversion factors. So the approximate return on that original Abbott Labs investment? She multiplied her money by a factor of greater than 2,600.
Q. Wow, 2,600 times her investment. Is that almost as much as Enron made? Or Bernie Madoff? Or a Wall Street bonus these days?
Q. OK, fine. But what about Mr. T? Are his gold chains worth $7 million?
A. Go ahead. Ask him. I pity the fool.
Want to succeed? Then you need goals!View Course »