Edward Zajac is an amazing man: at 94 he is still alive, sprightly (or so it would appear from his photo), and actively investing his own $2.5 million share portfolio …
… and, is still sharp enough to describe himself as an opportunist.
Wealthy Matters shares Ed’s financial success with his readers (you should read the whole article to learn more about Ed’s ‘EZ’ investing system):
Stick with stocks, says investor Edward Zajac. He should know. The 94-year-old has been trading for 72 years and said he’s made about $2.5 million.
So, should we all aspire – strictly from an investing standpoint (after all, who doesn’t want live to 94 and still be so ‘with it’) – to be like Ed?
Absolutely!
According to my calculations, Ed (assuming he started on or around the average salary for college educated technicians “installing computer systems” of $1,900 in 1939) would had to save 50% of his salary until he retired young (at the age of 51) and receive Warren Buffett level stock investing returns (21% compounded) for the entire period!
What I can’t model, because the numbers simply fall short, is how Ed managed to draw enough salary to “travel the US in a recreational vehicle with his wife” after he retired in 1968, yet still manage to double his portfolio again in the 42 years since he retired.
Good on you, Ed, we have a lot to learn from you 🙂
If I’m still breathing and not wearing an adult diaper at 94, I’ll be happy.
It’s a great story to see someone still doing it at his age and a successful early retiree but:
1. it’s worth bearing in mind that in spite of the early 1970s, the 1987 crash, the 2001 tech wreck and the 2007 financial crisis, taken as a whole the period he was investing in was a very good one for US equity investors. We can’t take it for granted that the next several decades will be as investor friendly;
2. his portfolio is “only” worth $412K and is split among 8 bond funds and 50 companies – with an average position in each company of around $6K I have to wonder if it’s worth the effort?
3. $2.5 million over 74 years is about $33K pa (before tax). At some point in the past that was a very good income. After several years of inflation, these days it’s hardly a 7m7y type number
@ TraineeInvestor – Interesting. My first draft of the post was going to center around “a brilliant 94 y.o. investor … I don’t think so” showing how compounding alone could have achieved that in his sleep.
However, it turns out that amassing $2.5 million (albeit only $412k now in stocks, presumably the rest is in cash/bonds?) on such a low salary ($10k start to $30k finish is my assumption, based on US historical data that I found) is actually VERY, VERY difficult.
However he did it, it seems pretty darn impressive. Maybe he had a few big home runs along the way while avoiding a lot of strikeouts. Either way, I hope to a) have this much money when I’m 94 and b) be around at that age!
“I hope to a) have this much money when I’m 94”
@ Money Beagle – I’m guessing that having $2.5 mill when you’re 94 won’t be nearly as impressive, due to the effects of inflation. Still, it will probably be a bette outcome than 90% of the population who live to that age.
Adrian – I read the article as saying his whole portfolio was currenty $412K – 8 bond bunds and 50 individual equities. I understood the $2.5 million as being to total amount he has made over the last 74 years – with the difference between $2.5 million and $412K having gone to taxes and living expenses. If he still has $2.5 million, then it is a much more impressive performance than I thought.
Cheers
traineeinvestor
@ TraineeInvestor – Hmmmm …. you may be right. But, I don’t think it changes much:
According to US labor stats, for his type of employment, he earned around $10k circa 1937 and $30k in 1968 when he retired.
He would then have to have amassed enough to allow for retirement spending (“traveling via RV lifestyle”) from 1968 until today, yet still leaving him with $412k.
Crunch some numbers, and let us know what you think …
OK, you made me curious enough to run a simple spread sheet. Given the number of variables and the very long time period, it’s something of a guessing game. Even very small changes to the assumptions can make a big difference to the final result when you have 74 years of compounding.
However, if I assume (i) long term inflation at around 4%, (ii) a savings rate of 30% while working, (iii) living expenses + taxes in retirement equal to 80% of pre-retirement expenses + taxes, then the ROI needed to produce a current portfolio of $412K is a nudge over 7.5% pa.
As a cross check, the sum of the investment gains is about $2.6 million which is fairly close to his $2.5 million number. This suggests that, although it is possible to play with the assumptions a bit to produce a different ROI, it’s probably fairly close.
7.5% nominal with inflation at 3.8% is not spectacular, but doing it over 74 years is highly respectable (at least). What is really impressive is that he would have experienced the horrible bear markets of the early 1970s early in his retirement. Usually negative returns in the early years of a retirement program can be fatal. Surviving that was no small accomplishment.
To a certain extent whether the return on investments is impressive or not is IMHO largely irrelevant – it was good enough for Mr Zajac to achieve financial independence early in life and live the way he wanted to.
Cheers
traineeinvestor