Generating a Great Net Worth on a Small Income

Here's the story of an 88-year-old deceased woman that certainly knew how to spend less than she earned (though she earned very little.) For your consideration:

In the early years, she made less than $8,000 a year. Even at her peak, she pulled in less than $25,000. When she retired in 1984, she lived off a small Social Security check and a bare-bones pension. She drove an old car and lived in a home that needed work.

Last week, Shriners director of development learned the hospital will receive about $425,000 from the estate of one Mary Kleinschmidt.

Yeah, she could have saved it in a better way ($105k in a safe deposit box isn't the best option for making your money grow) and she could have certainly spent some of it on herself to enjoy life a bit. But she seemed happy and willing to leave it all to charity.

Here's what makes this story remarkable to me: she ended up in the 80th percentile in net worth while having an income far below the median. If she can save this much with this little, no one else should be complaining that they can't find money to save or can't cut costs to afford what they need to do financially.

Want more examples of others doing the same? Here are a few:

• How to Get Rich on $20k a Year

• How to Grow Your Net Worth When You Don't Make a Lot of Money

• How You Can Own Two Homes with No Debt on $33,000 a Year

Comments

[Toby]

I hate to be a smart "donkey" but I have to point out that the median income in 1984, when she retired, was $22,415 according to the US Census Bureau. "At her peak" implies that she was making $25k sometime before 1984 which would put her above the median.

When telling PF morality tales from history, inflation can certainly lessen the magnitude of the feat.

http://www.census.gov/hhes/www/income/histinc/h08.html

[paul]

This kind of thing has been debated before in the PF blogs, but there is a difference between cheap and frugal.

I'm not necessarily commenting on the linked story, but if you're "saving" money by not taking care of your possessions, then you're not doing yourself any favors. I suppose as you get older you may think that it is someone else's problem when you die, but again if you're going to leave a few $100k to your heirs and a few $100k of repairs on your house/car/etc., then it's a wash.

Ultimately you're going to save more money by getting good deals and taking care of your possessions, which may not necessarily be the same thing as spending the smallest amount of pennies on your stuff.

[Minimum Wage]

Also, we don't know how much her husband earned when he was alive. We don't know how much her home is worth, but given its general location (Northeast Portland), it is probably worth in the neighborhood of $200K, and almost certainly at least $150K.

It is also likely that she did not incur any extraordinary medical expenses.

An extended illness or chronic condition can ruin you financially, no matter how frugal you are.,