How People Just Like You Planned Their Way to a Rich Retirement

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Oseola McCartyThe world is full of secrets. We may envy our neighbors next door, with their fancy new cars and in-ground pool, but we might simply be unaware that they're drowning in debt. (The average household with credit card debt owes roughly $16,000, and that's just the average!)

And then there is the neighbor on the other side of our house -- attracting very little attention, driving her 10-year-old car and walking her 8-year-old dog. What we don't know is that she's sitting on a retirement war chest of more than a million dollars, accumulated while she toiled at an ordinary job.

It's easy to assume that really fat bank or brokerage accounts are only for the wealthy and that the most we can hope for is to just get by. If you're earning, say, $45,000 per year and can't hope for much more than annual raises of 3%, it can be hard to imagine a comfy retirement.

Stop selling yourself short.

Meet the everyday millionaires

There are lots of examples of ordinary people who managed to accumulate great sums -- and you can do as well as them, or even better. Consider these four.

The determined washerwoman: First, there's Oseola McCarty. She's perhaps the most impressive example of how much someone can do with very little. She worked doing other people's laundry and never earned more than $9,000 in a year. Yet she managed to save more than a quarter of a million dollars. (Had she invested in stocks, she might have ended up with even more.)

The dropout dry cleaner: Another financial hero is Genesio Morlacci. A dry cleaner who became a part-time janitor in retirement, he died at age 102, leaving $2.3 million to a local university. He had only a third-grade education, but was good with numbers. He invested in real estate, bonds, and some stocks. (Interestingly, since stocks have tended to significantly outperform bonds and real estate over the long haul, Mr. Morlacci might have accumulated even more if he'd invested differently.)

The everyday entrepreneurs: Then there's Golda and Gilmore Reynolds, an unassuming couple in Indiana who surprised their town of Osgood by bequeathing $23 million. She had been a schoolteacher, and over the years they owned several small businesses, such as a car dealership and a tobacco shop. One trait of theirs was a love of stocks and investing, which enabled them to multiply their small fortune into a mammoth one.

The studious stock-picking teacher: Thomas Drey Jr., was a schoolteacher, too, until he retired. He spent a fair chunk of time at the Boston Public Library, studying stocks. The fact that he was able to leave $6.8 million to the library when he died suggests that he got very good at selecting smart investments. He wrote a book on the subject, as well -- America's 100 Best Growth Stocks.

Those are just a handful of many people who come from walks of life not so different from you and me.


You Can Do Better, Too

Clearly, these people amassed their money because they put their minds to it -- something any of us can do. The trick is to save aggressively and invest effectively.

Saving 10% of your income may not be enough, especially if you're starting a bit late. If you need to, you can employ some tricks to boost your saving and investing. For example, take on a second job for a while. Or simply work a few more years than you planned to before retiring. Taking in a boarder for a while can generate a lot of extra income. Or, if more extreme measures are warranted, consider moving into a smaller home -- or to a region with a lower cost of living.

The next step is deploying that extra savings and maximizing its future growth. Parking your long-term money in low-interest bonds isn't going to build wealth very quickly. The most successful builders of long-term wealth look to the stock market to make their fortunes blossom.

Yes, the stock market can be volatile, but if you take the time to learn more about stocks, you can invest somewhat conservatively in stocks and still make good money.

And finally, don't totally deprive yourself, or you'll have very little chance of sticking with your plan. Genesio Morlacci took occasional trips to Italy. The Reynolds had a winter home in Florida. Enjoy your life, but do so with your eyes on the prize -- a cushy retirement.

You can follow Motley Fool contributor Selena Maranjian on Twitter here.


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65 Comments

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evonie55

Too many of us fall for the "retire rich" scheme. Too many invest in stocks & 401k's only to most or all of what they worked for The fact is when you retire, you do so with a limited budget. We all know we won't be getting as much, even with savings, what we got when working. If Wall Street and financiers aren't screwing us, government is. We are taxed up, down, all around. For those who are retirering soon, put your money in tax free acounts. Uncle Sam already taxes your income, why have your retirement taxed also? And location! Look for the place where your money will last. Spend less on things you don't need and enjoy the rest of your life.

November 05 2013 at 12:15 PM Report abuse +1 rate up rate down Reply
surf1zorro

Tommy Drey Jr , no doubt, was an excellent investor.. had he spent less time in the library and more time traveling the world, he might have enjoyed actually SPENDING his money rather than accumulating it...So he became the richest man in the cemetary bequeathing his big bucks to the library he loved... to each his/her own....

January 27 2013 at 10:41 AM Report abuse rate up rate down Reply
jhzc

I said the same thing forget the stocks and invest ingood quality muni or corporate bonds They are much safer and giva a real return of 4 .5 to 6.5% Enough with the stocks outperforming bonds!! Look at the last decade! It is a big lie!

May 31 2012 at 9:09 AM Report abuse -1 rate up rate down Reply
Robert & Lisa

Our average income per household adjusted for inflation has been dropping rapidly since 2007, the year George Bush really started doing stupid stuff. Then Obama does even more of the same. What do you expect, America? How are we going to have decent retirements, when our standard of living keeps falling? We are heading in the wrong direction, and we are quickening the pace.

May 31 2012 at 5:53 AM Report abuse +4 rate up rate down Reply
wapitibowhunters

Key word "work". You will never be rich on welfare, hope and change isn't going to get you there either. If being rich for only a few days a month is good enough for you then stay on welfare. Go to the Casino and enjoy yourself

May 31 2012 at 12:36 AM Report abuse -2 rate up rate down Reply
1 reply to wapitibowhunters's comment
Syl

Hate to tell you that there are many "working" people who still rely on welfare. The recession has killed many well paying jobs and the jobs that are left are low paying jobs without benefits. People need hope and change to finally get out of poverty. Hope and change is giving people the opportunity to go back to school for retraining. If you see the devastation I see daily, you would not judge people so harshly.

December 01 2013 at 10:10 PM Report abuse rate up rate down Reply
AgDoc

Ironic, huh? Every OWS'er wants to be the headliner in a story like this, but that would make them one of the 1%'ers which would be the antithesis of everything they believe which.... Face it, as much as the libtoons bash the 1% they'd give their eyeteeth to be one of them.

May 30 2012 at 11:47 PM Report abuse rate up rate down Reply
sf945

By spending wisely, you can spend below your means, and still afford some luxuries. But the key point is to save, whether it is $10 a day, $20 or day, etc. Many people are impatient and want to be rich now. But they don't realize two things: if one implements a three-year plan for riches, and doesn't work, and does this ten more times, then thirty years will have passed, with nothing to show, and getting rich quick isn't exclusive to getting rich slow. Once a "get rich slow" plan is in place, then some of the saved money can be used to try and get rich quicker.

http://www.amazon.com/10-Day-Towards-000-ebook/dp/B007X6PAE0/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1338433973&sr=1-1

May 30 2012 at 11:25 PM Report abuse rate up rate down Reply
Bob

Live below your means and work for 30 or more years, and with a little luck you will hava a
$1,000.000 or more! I did.w

May 30 2012 at 10:32 PM Report abuse -1 rate up rate down Reply
1 reply to Bob's comment
SPQR

Tha looks like 1000 dollars

May 30 2012 at 11:08 PM Report abuse +1 rate up rate down Reply
jaluty

All of these articles in one way or another promote the use of stocks. Well a hell of a lot of people were wiped out when those markets crashed. What is the authors statement to that? Your asking people to invest in very riskly practices.

May 30 2012 at 8:59 PM Report abuse +3 rate up rate down Reply
2 replies to jaluty's comment
SPQR

that is their job!! to make commissions

May 30 2012 at 11:24 PM Report abuse +2 rate up rate down Reply
Matt

The author's statement would likely be something along the lines of:

- Don't buy stock in "puppyunderwear.com" and expect to get rich
- Don't put all of your retirement in one stock (Enron) and expect to get rich
- Don't invest in companies that are fueled by artificial credit and artificial money (housing stocks 2007, most US stocks today)
- Do your homework, have patience, be unemotional about it, and do more homework.

June 11 2012 at 4:43 PM Report abuse -1 rate up rate down Reply
ajt1025

If all these get quick ideas were real perhaps more people would be able to retire confortably. The only people that get rich off these things are the people that want you to buy worthless information. If you started saveing early in live you might have enough money to retire before you die and not have to work until your 80. With the run away prices of today most people have to work till much later in life and can't do much when they do as the taxex, insurance, home repairs and the list goes on. Nobody cares about the people just the bottom line and how to screw Americans out of their hard earned money.

May 30 2012 at 8:49 PM Report abuse +3 rate up rate down Reply