You can become financially independent
Ronald Read was born in 1921 in Brattleboro, Vermont, USA. After serving in the army in the Second World War, Ronald became a fuel station attendant, a job which he held for several decades. In his later years Ronald swapped the fuel station to become a maintenance man at a local department store.
By all accounts Ronald lived a very simple life. He collected his own firewood, drove an old Toyota pickup truck and sought bargains wherever he could. But what no one knew during his lifetime was that Ronald, despite being a very modest earner all his life, was a keen saver and astute investor.
When he died in 2014 aged 92, Ronald had amassed an $8 million fortune, $6 million of which he left to a local hospital and library.
So how did he do it?
Despite having a low income, Ronald kept his living costs even lower, to enable him to save reasonable amounts every year of his working life, which he invested in a range of large US companies that he understood. And because he held his investments for so long, the magic of compound interest (earning returns on returns) meant that eventually annual investment returns dwarfed the value of new cash he added to his investment pot.
You could accumulate £8m if you invested £6,300 per year (c. £530 per month) for 50 years and earned the stock market's long-term average annual gain of about 10%.
And if hitting ‘just’ £1 million would be more than acceptable, you could achieva that by investing just £700 per year (c. £60 per month)for 50 years at the same rate of return.
At the end of the day there is no secret to accumulating meaningful wealth. You need to avoid expensive non-housing debt, spend less than you earn, invest the difference in leading companies of the world, keep investing costs low and be very patient.