#103 Hetty Green (The Richest Woman in America)

**David Senra** (0:00)
A passer-by might say she looked as poor as a church mouse, but her clothes were merely a costume to conceal her incredible wealth.
Hetty Green was the richest woman in America. She was the smartest woman on Wall Street, a financial genius, a railroad magnate, a real estate mogul, a gilded era renegade. I've had fights with some of the greatest financial men in the country, she said. Did you ever hear of any of them getting ahead of Hetty Green?
The public resented the somberness of her clothing, the plainness of her diet, the austerity of her home. But Hetty Green refused to yield to the role of gilded age socialite. Indeed, she refused to comply with any stereotype. Defiantly independent, she made her own rules and lived by them.
Whatever method she used to make her money, she would not succumb to the tactics of other millionaires. She did not employ workers to slave wages, did not steal land from the public, or outsmart stockholders, or pay off government officials. She did not scheme with Wall Street or speculate with other people's money.
No, she told a reporter, her formula for success was simple, common sense and hard work.
I go my own way, take no partners, risk nobody else's fortune. Her holdings ranged from mortgages in real estate in New York to dozens of buildings in downtown Chicago. Gold, copper and iron mines out west, diamonds and pearls, railroads and government bonds. She was considered the single biggest individual financier in the world.
By the time she died in 1916, she was worth $100 million, the equivalent of more than $2 billion today. Okay, so that is an excerpt from the book that I read this week and the one I'm going to talk to you about today, which is The Richest Woman in America, Hetty Green in the Gilded Age, and it was written by Janet Wallach.
So I found out about Hetty Green when I was reading the book A Mind at Play, which is the book about Claude Shannon.
And in the book, it says that when Shannon wanted to learn about investing, he read books about other investors. And one of the people that he read about and that he studied was Hetty Green. So my calculus was rather simple. Claude Shannon was really smart. And if he learned from Hetty Green, why wouldn't I? So I'm going to jump right into the book. I have a lot of notes. In fact, I spent about two hours before I sat down to record, trying to edit down my notes with not a lot of success. So at the very end of the book, they have this like excerpt, this additional chapter. It's called The Wisdom of Hetty Green. It contains a bunch of aphorisms that she'd repeat throughout her life. And I actually think putting that at the beginning is a way for one, for us to learn about the personality, like who was the person. And I think having the information before you study, like their early life and how they built their business, I think that's helpful. All right. So let me just read you some of the aphorisms that I particularly enjoyed. Before deciding on an investment, seek out every kind of information about it.
She says, watch your pennies and the dollars will take care of themselves.
After your business is over, you may take your colleague to dinner and the theater, or allow him to take you, but wait until the transaction has been closed and the money paid.
She's got some advice on what to do before making a deal. She says, before making a deal, if anyone is full enough to offer you the full amount, take it. If you are offered less, tell the man you will give him the answer in the morning. Think the matter over carefully in the evening. If you decide that it will be to your advantage to accept the offer, say so the next day. And then this ties into another one of her aphorisms, which is, in business generally, don't close a bargain until you have reflected on it overnight.
She says it's the duty of every woman to learn how to take care of her own business affairs.
When good things are so low that no one wants them, I buy them and lay them away in the safe. When owing to some new development, and they go up and my shares are so needed that men will pay well for them, I am ready to sell.
More on how that way she invests and thinks about value. I am always buying when everyone wants to sell, and selling when everyone wants to buy. And I'll give you several examples of that later on. Then she's going to list what I would say is like her main focus. She says, Railroads and real estate are things I like. Government bonds are good, though they do not pay very high interest. Still, for a woman, safe and low is better than risky and high.