Hetty Green was the richest woman you've never heard of.
In the late 1800s, she built a fortune worth billions today in a world designed to stop her. Women couldn't vote, couldn't own property in most states, and were banned from the New York Stock Exchange floor entirely.
She was a force that couldn't be stopped. She bought entire towns, crushed railroad barons, and became the lender of last resort during financial panics. Her strategies still work today.
This is the story of how an unwanted daughter became "The Witch of Wall Street," and a playbook for building lasting wealth and independence.
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Some of the lessons in this episode:
“I buy when things are low and nobody wants them. I keep them until they go up and people are crazy to get them.”
Position beats prediction. Always keep cash reserves.
“If you can manage your brain, you can manage your fortune.”
“Before deciding on an investment, seek out every kind of information about it.”
The skills to get rich and the skills to stay rich are not the same.
“In business generally, don’t close a bargain until you have reflected on it overnight.”
Only invest when downside risk is low and upside is high.
Self-reliance is the ultimate competitive advantage.
Everyone looks smart when they’re in a good position, and even the smartest person looks like a fool in a bad one.
Panics are temporary. Value is permanent.
Have a detective’s eye. Uncover what others miss or ignore.
“I go my own way, take no partners, risk nobody else’s fortune.”
“Never owe anyone anything. Not even a kindness.”
Mix extreme patience with extreme decisiveness.
Never bet against America.
“Watch your pennies and the dollars will take care of themselves.”
Move in silence. Keep your positions private.
Never take advantage of people, even when you could.
“When you try to do too much, you never get anywhere. Focus.”
Stay connected to reality. Frugality keeps you grounded.
“When it comes to spending your life, there have to be some things neglected. If you try to do too much, you can never get anywhere.”
“My work is my amusement.”
“Property is a trust to be enlarged for future generations.”
Live by your own rules, not society’s expectations.
Be fair in all things. Your conscience will haunt you otherwise.
“Don’t kick a man when he’s down.”
“Seek elegance rather than luxury, refinement rather than fashion.”
“When I see a good thing going cheap because nobody wants it, I buy a lot of it and tuck it away.”
From her favorite poem: “To live content with small means; To seek elegance rather than luxury, And refinement rather than fashion; To be worthy, not respectable, and wealthy, not rich.”
Learn more at https://fs.blog/knowledge-project-podcast/outliers-hetty-green/
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This episode is for informational purposes only.
Actionable Insights
1. Buy Low, Sell High
Adopt a contrarian investment strategy by buying assets when they are low and unwanted, then holding them until demand increases and people are willing to pay a premium. This means being fearful when others are greedy and greedy when others are fearful.
2. Conduct Obsessive Research
Before any investment or purchase, seek out every kind of information about it, going beyond official reports to inspect assets firsthand, talk to workers, and gather all possible details, good and bad. This provides an information advantage and ensures you trust no one else to do your due diligence.
3. Maintain Massive Cash Reserves
Always keep significant cash reserves and avoid debt, as this liquidity allows you to capitalize on opportunities during financial crises when others are forced to sell and credit is scarce. This positioning enables you to acquire distressed assets at bargain prices.
4. Minimize Downside Risk
Only invest when you are satisfied that the downside risk is minimal and the upside potential is substantial. This approach ensures a conservative yet effective strategy for managing your fortune.
5. Reflect Overnight on Deals
In business, don’t close a bargain until you have reflected on it overnight, allowing time to carefully consider the offer and ensure it is to your advantage before accepting. If offered less than desired, defer the answer until the next day.
6. Control Your Financial Destiny
Be fiercely independent and actively fight for control over your own money and business affairs, trusting your own judgment rather than relying on others or societal expectations. This includes learning to manage your own business matters.
7. Watch Your Pennies
Practice extreme frugality and ‘watch your pennies,’ understanding that every dollar saved is a dollar that can compound over time, contributing to long-term wealth accumulation. This also helps you stay connected to the real world.
8. Invest in What You Know
Concentrate your investments on what you know best, such as railroads, real estate, and government bonds, avoiding complexity and speculation. Never borrow money and keep operations simple enough to manage yourself.
9. Conduct Ethical Business
Always be fair in business dealings, avoid cheating, falsifying, or taking advantage of others, even when you have leverage. Riches dishonorably gained will cause conscience trouble and must be left behind.
10. Prioritize Life’s Endeavors
Recognize that to achieve significant goals, some things in life must be neglected, as trying to do too much will prevent you from getting anywhere. Focus your efforts to achieve meaningful progress.
11. Apply Common Sense
View common sense as the most valuable possession in business, applying it to all decisions and strategies, just as it is essential for good nursing.
12. Mix Patience with Decisiveness
Cultivate patience by buying assets and holding them for years, sometimes decades, while also being decisive when opportunities arise, especially during market panics.
13. Operate Discreetly
Avoid drawing attention to yourself by operating in private, purchasing property or stocks under fictitious names, and closely holding your positions. Move in silence to maintain an advantage.
14. Value Over Panic
Understand that financial panics are temporary, but underlying value is permanent. Use crises as opportunities to acquire distressed assets at bargain prices, rather than succumbing to fear.
15. Live with Elegance, Not Luxury
Strive to live content with small means, seeking elegance over luxury and refinement over fashion. Be worthy, not respectable, and wealthy, not rich, while studying hard, thinking quietly, and acting frankly.