In this series, Nav.it profiles infamous female financiers and shares what they taught us about navigating their own personal finances. These ladies made money moves long before Cardi B.
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Mark Zuckerberg wears t-shirts and hoodies to work. He’s also worth about $72 billion.
In the 1860s, Hetty Green was paving the path of the dressed-down billionaire way before Zuckerberg. She was the richest woman in the United States, worth about $4 billion in today’s dollars.
“At the time of the big famous financiers such as Rockefeller, Carnegie, JP Morgan, those robber baron guys, Hetty Green was the only woman in that category to make her own fortune,” says George Robb, professor of history at William Paterson University in New Jersey and author of Ladies of the Ticker: Women and Wall Street from the Gilded Age to the Great Depression.
Instead of being lauded for her smarts, society dubbed her “The Witch of Wall Street.”
Cheers to Dad
Henrietta Robinson came from a New England Quaker family who made a lot of money on whale oil. Her mother died when she was young, so her father and grandfather raised her. They read the stock market reports together and taught her about money, so by the time her father died in 1865, Hetty was 31, and a boss financier.
“She inherited $6 million from her father, but most of it was put in trust for her,” Robb says. She got $1 million outright, and only got access to withdraw from the account once a year.
“Most women would have just gotten married and lived off that,” Robb says. “But she thought it was a slap in the face and tried to break the trust. She wasn’t able to.”
Despite her unsuccessful legal battle, Hetty used her know-how to invest the cash and profits from the trust, Robb says.
Good Money, Bad Press
Hetty knew a thing or two about investing, but really there’s no trick to her strategy—just nerves of steel.
“She would just buy when stocks were low,” Robb says, “But it takes a steady nerve to do that, because prices are crashing and people are running for cover.”
Hetty focused heavily on long-term investments, mainly real estate and railroads. After the Chicago Fire and the San Francisco earthquake decimated two major transportation hubs, Hetty bought a lot of real estate at bargain prices that paid off big when the cities rebuilt. And railroads, well, those got pretty popular, too.
She was patient, buying cheap in the boonies, and waiting for the hustle and bustle of the city to arrive.
Even though Hetty was making bank, Hetty wasn’t respected.
“The business community made fun of her a lot,” Robb says. “The mainstream press criticized her because she didn’t give money to charity or museums.”
With so much negativity surrounding women who stepped outside their conventional role, Hetty had to “excuse” her behavior. She attributed her lifestyle and money habits to her conservatism and her religion. In her eyes, philanthropy was pomp and circumstance for the wives of rich men who go to tea parties and gossip.
Yet, she was still bold. She’d say things like, ‘I make money in an honest way,’ or ‘I’m a Quaker, if you give money and brag about it, that’s not really charity in the eyes of God,’ calling out bigwig philanthropists, Robb says.
While the media and high society suggested she was pathological, Hetty really just refused to play the game.
That put her in high regard with farmers and people from small towns. While the rest of the rich spent money like it was going out of style, Hetty lived a modest life.
“She represented anti-big city values, her shrewdness was admired and she was good at representing herself,” Robb says. “She didn’t have a mansion. She rented an apartment in Hoboken, New Jersey and took the ferry to Wall Street every day.”
Of course, this simple lifestyle benefitted her wealth: Without a mansion, she avoided taxes, especially the estate tax for her children, Robb says.
“She didn’t live like she was poor, but by the standards of the time it looked that way,” Robb says. “She had one maid, she’d rent and stay in hotels.”
That earned her the Guinness Book of World Records title of the stingiest woman in the world, he says. But avoiding extravagance gave her more money with which to invest.
The Bank of Hetty Green
Other than smart, long-term investments, Hetty made money by keeping cash on hand, just in case there was a downturn in the market, Robb says.
“Most other rich people had their money tied up in investments or their lifestyle,” he says. “People knew this, so they’d borrow from her. The city of New York would borrow when there was a shortfall because she loaned at a lower rate of interest.”
At a time without chain banks to issue loans, people who needed cash would have to visit a person such as JP Morgan to borrow money. But he’d charge an arm and a leg because he could, Robb says.
By loaning money, Hetty earned more than she would have storing cash in the bank.
“She was so in tune to the money market, she could predict how much money that the comptrollers wanted,” Robb says. “She read the daily papers and had a good memory for real estate prices. She also probably took advantage of the fact that people would underestimate her.”
What Can You Teach Us, Hetty?
At the time Hetty Green was living, society maintained divided opinions about her, but her reputation ultimately suffered despite her wealth of knowledge about… well, wealth. She turned her $6 million inheritance into $100 million by the time she died in 1916. By this time, she also owned 6,000 properties (such as hotels, office buildings, cemeteries, churches and railroads) in 48 states.
“She dies in 1916, and the Great Depression comes, and there’s a lot of negative feelings about rich people, and that’s when the book [The Witch of Wall Street] is published about her,” Robb says. “For a long time, that doesn’t go away. That negative idea of her as the Witch of Wall Street sticks all the way into the ’60s.”
Then, in the ’60s, feminists didn’t want to celebrate her because she was a capitalist and against suffrage. But ultimately, Hetty Green is a perfect example of a person who didn’t let outside opinions influence her decisions. She knew what she was doing with money, so she did it.
Hetty stayed calm when the market fluctuated, invested in what she believed, and held onto her earnings. Woo hoo, witchy woman. Woo hoo.