How a Janitor Built an $8 Million Fortune Without Touching Cryptos, Stock Options or Leverage – Yahoo Finance

Ronald Reid was the last person you would expect to be a millionaire.
He used safety pins to hold his old coats together and cut his own firewood well into his 90s.
He drove a second-hand Toyota Yaris and resisted new purchases.
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His only real indulgence may have been his daily English muffin and a cup of coffee at the Brattleboro Memorial Hospital in Vermont, where a friend remembered him sitting at the exact same stool every morning.
In his career as a janitor and gas station attendant, he was known as a hard worker.
But friends and family never suspected he was building an $8 million fortune.
When he died in June 2014, Reid’s will revealed an $8 million portfolio.
It turned out that Reid, in addition to saving diligently for decades, had also been buying quality, dividend-paying companies that he held for the long term.
Reid owned shares of at least 95 companies at the time of his death — names you’d recognize like Procter & Gamble, JPMorgan Chase & Co. and Johnson & Johnson. Many of these companies increased their dividends every year for decades after he bought them.
There’s no doubt Reid’s investments were savvy. But his results are a testament to his patience more than anything else. They call to mind an old Warren Buffett observation that “the stock market is a device for transferring money from the impatient to the patient.”
You may be thinking that you don’t have decades to wait, as Reid did. But investors today have one advantage he couldn’t dream of.
For 79 years, if you wanted to invest in early-stage companies like Apple Inc. in the 1970s, Meta Platforms Inc.’s Facebook in 2004 or Airbnb Inc. in 2009, you had to be an accredited investor.
The concept came from a 1933 law that created the U.S. Securities and Exchange Commission (SEC), which also held a provision barring any nonfounders or other company insiders from investing in a company before its initial public offering (IPO) unless they had either a consistent income of at least $200,000 or a net worth of $1 million.
In theory, this law protected unsophisticated investors from falling for scams or pie-in-the-sky business proposals. But there’s no denying that investors like Reid were shut out from potentially lightning-fast profits for almost their entire investing lifetimes.
Washington has now lifted the 79-year ban on access to pre-IPO companies — and already, thousands of regular investors are buying shares of some of the most exciting startup companies in the world today.
Platforms like StartEngine are allowing retail investors to invest alongside venture capitalist legends like Kevin O’Leary — Shark Tank’s Mr. Wonderful — and Howard Marks, co-founder of Activision.
It’s not just the legal right to invest that matters — connections in the world of Silicon Valley are important, too. For example, Peter Thiel, who turned a $500,000 investment in Facebook into $1.1 billion, was acting on a tip from a network of Silicon Valley contacts it took him years to build.
For investors without the time or inclination to network like that, these platforms can offer easy access to companies that some billionaire venture capitalists are already backing. It’s possible to buy thousands of shares for just a few hundred dollars, which is important for any investors following the most basic rule of startup investing — to never risk more money than they can afford to lose.
See more on startup investing from Benzinga.
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