KC (a regular at my new reader community: www.sharyournumber.org) sent me an e-mail asking:
[the headline reads: “How social worker Jane M. Buri saved $1.4 million, then gave it all away”] and I can’t begin to think how you could start to calculate whether this is indeed possible for a moderately paid social worker who lived frugally.
What are your thoughts?
Well, on the surface the lady appears to be a classic miser; she:
– never married, never had children, never missed a day of work
– drove a 30-year-old car, watched an ancient TV (she resisted replacing her old TV and icebox), lived four decades in a house bought with cash in 1969 (the furniture was her parents’)
– dressed plainly, wore costume jewelery, dyed and permed her own hair
– would buy five sandwiches for $5.95 from Arby’s (she’d eat one and freeze the four others for later; when she went out with friends, they nearly always split the bill)
I think this statement sums it up the best:
She lived, her friends say, nearly as a nun.
On the other hand; she also ‘lashed out’ from time to time; if you call eating out ‘lashing out’:
Nor did she deny herself small indulgences. Some weeks, she ate out three meals a day, friends said. She traveled to Europe, and to the Rose Parade in California. She bought a baby grand piano.
OK, this is a lesson in frugality: single woman, no mortgage or car payments for thirty years and 100% gainfully employed living frugally …
… does this mean that it’s surprising how much she managed to leave behind?
Well, we have a data point:
She got her first job as a social worker in 1954, according to St. Louis Public School records. She made $3,800 a year. Within 10 years, she was running the department and had doubled her salary.
Let’s assume that she grew her salary from 1964 until 2002 at 6% p.a. (which leaves her a finishing salary in 2000 of nearly $61,000); let’s also assume that despite her frugal habits that she still spent / donated half her money (after all, there “was nothing she wanted and didn’t buy” and she “kept stacking charity donation envelopes in her sun room, until, once a year, she sent them all in”) … which all means, that we are assuming that she saved ‘just’ 50% of her salary.
Putting this all into a spreadsheet (with the final assumption that she just managed to earn 6% on her money, compounded over the 50 years that we are talking about), I can see that $1.4 mill. is reasonable for her to leave behind; in fact – by pure coincidence, because of all the assumptions that I’ve made – that’s exactly what I came up with at my first attempt at running the numbers.
There’s no doubt that living this frugally for 50+ years, having no major expenses (family, house, car, etc.) is the secret to this kind of financial ‘success’ … she apparently enjoyed the life of a ‘nun’ … so might others … would you?