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The True Story of "The Witch of Wall Street" (Hetty Green)

Despite working in the investment world for nearly 20 years, I have only just learned about one of the best investors of all time. Her name was Henrietta ("Hetty") Howland Green. When she died in July 1916, she was reported to be the wealthiest woman in the world (worth billions in today's money).

In this blog, I go through Hetty's history, including why she was referred to as 'The Witch of Wall Street', and the lessons from her story that can help you teach your kids about money (and it's very inspiring for those of you who have daughters).

I learned about Hetty from listening to an interview with financial historian Mark Higgins on the Banking on Girls podcast (I highly recommend this podcast series if you have daughters).

Who was Hetty Green?

Hetty grew up in the 1800s and was the daughter of a wealthy whaling family (i.e., used to own ships which were used to catch whales to make oil before petrol was used). Her only sibling died as an infant so much of her time was spent around her parents or at boarding school.

Both her father and grandfather had poor eyesight, so Hetty would read the financial news and statements for them from the age of six. As she grew up, she would shun the social norms for girls at the time. She didn't care too much about her appearance, clothes or popular culture, much to the mother's and aunty's annoyance.

In her teens, she got involved in her father's business but her mother and aunty had other plans. When she was 20 they sent her to New York to go and find a husband. However, after several months she returned home without a partner.

Hetty did eventually get married, to Edward Henry Green, who was a millionaire in his own right. Around the same time, Hetty's father and aunty passed away leaving their money to her (her mother had died years earlier). They left most of the money in a trust, however, which meant she only got an income each year, rather than being able to spend or invest the bulk of the money. This upset Hetty as she felt that they didn't believe she could look after the money herself and it became something she wanted to prove to everyone that she could do (and did!).

Hetty Green was known as the 'Witch of Wall Street' and was the richest woman in the world

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How did Hetty Green make her money?

Whilst Hetty inherited a lot of money, it was how she used this money to ultimately become the 'Richest Woman in the World' that makes this story really interesting.

Her years of learning about how businesses work and seeing the stock market go up and down allowed her to grow her wealth substantially.

She pioneered the art of 'buying low, selling high' (known as 'Contrarian Investing'). She is quoted as saying:

"I buy when things are low and nobody wants them. I keep them until they go up and people are crazy to get them. That is, I believe, the secret of all successful business."

As Hetty looked after her money, she always made sure she had plenty of cash for when the economy was doing poorly. She could use this money to lend to those who needed it and get the money back with interest when the economy recovered. She would also buy businesses at that time. This went against everyone else who was panicking and trying to sell their investments.

As people were coming to Hetty to borrow money, she picked up a sense of when things could change in the economy. If too much money was flowing from one person to another, she became wary that a crash might be coming. In fact, she sensed the market crash of 1907 was coming before others and held onto her cash. As most investors lost most of their money during the crash, Hetty was able to keep investing. She even lent money to the City of New York as it was strapped for cash during the crisis.

At the time of her death in 1916, she had amassed around $100-200 million. This would be equivalent to billions in today's money. Most of this money went to charities following the death of her children in the 1950s.

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Why was Hetty Green called 'The Witch of Wall Street'?

Despite clearly being an incredible investor and helping many people, she was given the unfair nickname of 'The Witch of Wall Street' by the media.

We have to remember that Hetty was doing financially better than nearly all men, at a time when women had very few rights. This led to a lot of jealousy and resentment.

The men in the industry would frequently talk about how Hetty was reluctant to spend any of her money. She would stay in small accommodation, rarely bought new clothes and was even rumoured not to pay for hot water. They felt she was cheap and miserable. They even made up stories that she wouldn't pay the medical costs, when her son injured his leg, to tarnish her reputation.

After her husband, passed away, Hetty constantly wore a simple black dress. This led to more people referring to her as a witch.

Hetty Green, The Witch of Wall Street, in her all black outfit

After her death in 1916, people started to admire what she had achieved and she was then referred to as 'The Wizard of Finance' and 'The Richest Woman in the World'.

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Money Lessons for kids from Hetty's story

There are many money lessons from Hetty's story. I shared Hetty's wise words with my two daughters:

"Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates."

Hetty ignored what the masses were doing

Hetty didn't care what other people were doing. She didn't care that other women weren't managing their own money and investing. She didn't care about keeping up with the Jones in terms of spending money on clothes, houses and holidays. This meant that she had more control over her money and could use that to make more money and help other people.

Humans are social creatures. We care a lot about what other people think. We just need to make sure that when it comes to money, our kids don't allow social factors to overpower logic too often.

Hetty was frugal

Hetty was apparently very frugal with her money. Whilst I don't think I want my kids to be as extreme as Hetty (as there is joy in experiencing some luxuries from time to time), I do want them to think about whether things are of good value regardless of how much money they have.

I recently heard that when Bill Gates was young but still wealthy, he would fly economy for short-haul flights as he felt that flying first-class wasn't good value for the length of the flight.

Hetty invested during the storms

In previous blogs, and in my book Grandpa's Fortune Fables, I've shared that I get my daughters to think of money like seeds. If you plant those seeds, i.e. invest, then they can grow into trees. However, there will be times when there are storms which break the tops off the trees (i.e., the stock market falls). Whilst most people panic during the storm, it's actually a great time to plant more seeds (invest more).

Hetty Green would invest during market crashes, just like planting seeds during a storm

Hetty really pioneered this investment strategy. She would use her money during the frequent stock market crashes to invest more (plant more seeds). She was patient and didn't panic. She let the storms pass and saw her money grow. Much like how Warren Buffet has amassed his fortune today.

I believe that if kids grow up seeing the stock market go up and down over time, they will be able to invest wisely as adults. They won't panic when the market falls but see it as an opportunity to invest more. Just like Hetty.

Hetty learned about money from a young age

This is the most important lesson from this blog. Hetty Green, The Witch of Wall Street, had such an advantage in life as she was taught about money from a young age.

She was lucky that her father and grandfather knew about money and took the time to involve her. This knowledge meant that by the time she was an adult, she'd seen the ups and downs of the economy and knew what options she had.

Whilst she inherited a lot of money, it was her father's knowledge, about how to manage money, that ended up being most valuable, allowing her to grow her wealth and help many people and charities. This is in contrast to many rich families who pass on money only but without the knowledge of how to look after that money.

Tip: Start talking to your kids about money from a young age to give them an advantage.


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P.S. Do you want to help your kids to have a financial legacy like Hetty Green? If so, grab them a copy of our best-selling money book for kids, Grandpa's Fortune Fables. They'll soon know more about money and investing than most adults.

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