Another Amazing Story of Compounding

Published on March 5, 2010

Earlier this week, we highlighted the power of compounding in an article on the rapid appreciation of the first Superman comic book.  An equally dramatic example was recently published regarding Grace Groner, a 100 year old woman who recently died and left $7 million to her alma matter.  The source of the funds?  A $180 investment in Abbott Laboratories made in 1935.

Ms. Groner lived a modest life (her home is pictured nearby) and had few material requirements.  This enabled her wealth to compound without interruption for seventy five years.  Her investment in three shares of Abbott Laboratories at $60 per share compounded at a rate of slightly over fifteen percent per year with all dividends reinvested.

The $7 million donation is expected to result in an endowment generating $300,000 per year which will enable dozens of students to travel and pursue internships.  Ms. Groner also donated her modest home to the university which will be converted into living quarters for women receiving scholarships.

This story is another example of the power of compound interest, but it is not necessary to have an investment horizon of 75 years in order to harness the benefits.  While Ms. Groner’s story is exceptional, it is likely that there are many other “silent millionaires” throughout America fitting the “millionaire next door” model.

To read a more complete account of Ms. Groner’s story, click on this link.

Another Amazing Story of Compounding
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