Hetty Green was born to a wealthy business family in 1834.
Back then, women were not allowed to take part in financial matters.
Her family was involved in the whale hunting business and Hetty grew up in a household that provided for all her needs.
Hetty’s father wanted a son. Her parents would quarrel over this so they sent little Hetty to live with her grandfather.
It was here that she developed a keen interest in maths and finances.
Like her family, she grew up to be extremely frugal – not spending on nice clothes, fancy dinners, hotels, or transport.
Her grandfather’s eyesight was getting weaker with time and Hetty would read his business financial documents. She enjoyed the task as she learnt more about these businesses this way.
She would also read the financial news to him. This led her to ask questions about the financial markets.
These questions fueled her interest in businesses and she learnt about topics such as stocks, bonds, interest, market fluctuations, and so on.
She became an integral part of her grandfather’s business.
When she was 13 years old, her grandfather died. Hetty was called back to live with her parents.
By now, she had developed a good sense for business and finances. She started accompanying her father on his visits to the docks.
They were a wealthy family and girls of such wealthy families were not expected to be seen in the docks.
But others’ thoughts about her did not bother Hetty. She was not interested in dressing well, looking pretty, or going to fancy meet-ups.
This, however, worried her mother and aunt.
They encouraged her to travel to New York, where she could attend ball parties and meet young wealthy people like herself. The hope was she would find someone to marry.
She returned a few months later – without a fiance or husband.
Hetty had spent all her time listening to men talk about Wall Street dramas. She had been given $1200 for the trip but she spent only $200. The remaining $1000 had been invested in bonds.
Her father was delighted to see how frugal Hetty was.
Around the same time, her father decided to exit the whaling business. This was perfect timing because the whaling industry collapsed thanks to the discovery of petroleum (whales were a source of oil till then).
He founded new businesses and started travelling to New York. Hetty accompanied him on these trips and began living long periods in the city
It was here that she met Edward Green in 1865. He had made about $1 million as a merchant in the Philippines and was wealthy.
She announced that she’d get married to him. Her father was happy and encouraged them. They got married 2 years later.
While getting married, Hetty made Edward sign an agreement stating her husband would have no claim to her wealth. This move was highly unusual in those times.
Edward also joined her father’s business and began managing their shared empire.
Queen of wall Street
Hetty Green was a value investor – decades before it was popularised by Benjamin Graham (Warren Buffett’s mentor) in his famous book, The Intelligent Investor.
She liked to buy things when nobody wanted them and sell when everybody wanted them.
Living in New York, she honed her investing skills – and became an active stocks and bonds investor.
One of the earliest big successes was investing in War Bonds right after the Civil War. They were available at low prices because nobody wanted them.
Hetty assessed the political situation correctly and predicted their appreciation would be high. She made over $1.25 million from that investment alone.
Back in those early days, she also made a fortune from railroad bonds.
The railways were expanding into the country and there were many scamming salespersons selling junk rail bonds and shares.
Hetty was able to avoid getting pulled into scams while also being able to invest in the best railroad investments.
Back then, railroads were new and rapidly expanding all over the country.
In 1907, Wall Street saw a lack of trust in financial institutions. Depositors started withdrawing money from banks and the USA was facing a total financial system collapse.
There was no central bank back then.
In that period, the famous banker, JP Morgan, managed to convince many rich investors to lend money to save the system from collapsing.
Hetty was one of the investors.
In fact, she had seen this trouble coming much earlier and had lent money to various businesses to help them survive the volatile period – and to make a good profit while re-emerging from the panic.
When the panic period was over, she managed to earn a good interest rate and came out of the crisis stronger – something many other investors had failed to do.
Not only the 1907 panic, but she weathered and emerged successful from various other panics like 1873, 1884, and 1893.
She refused to take part in insider trading and market manipulation.
And much like what Warren Buffett is now famous for saying, she avoided investing borrowed money at all costs.
Besides bonds and lending, she was also interested in real estate and made similar well-timed investments.
While she avoided debt at all costs, her husband Edward could not stay away.
He had been a successful investor but could not keep himself away from the temptation of using margin for investing.
One bad investment led to him having a debt in excess of $700,000.
At that point in time, Hetty and Edward had their accounts in the same bank. Even though they were separate accounts, the bank insisted Hetty pay for his debt.
This came to light when Hetty was trying to withdraw her money before the panic of 1884.
The bank’s move was illegal – they could not ask her to clear his debt. She still decided to clear her husband’s debt anyway.
This left her incredibly furious. She sent her husband to live at the Union Club of New York where he would receive a monthly stipend from her. They effectively separated.
The media stopped referring to her as “Mrs Edward Green” and started calling her “Mrs Hetty Green”.
The other controversy that shadowed her all her life was a court case pertaining to her aunt.
When her aunt died, she wished to inherit all her money. But her aunt chose to leave the money in a trust fund from which Hetty would get a regular income.
This angered Hetty as she thought she would have managed the money better than the trust fund.
Richest Woman
Hetty Green opened her first bank account when she was only 15 years old and started investing prudently.
When she died in 1916, she was worth about $100 million.
This made her the richest woman in the world around that time.
Her frugality, discipline, and eye for underpriced assets made her multiply her wealth multi-fold.
Her habit of staying away from margin and loans ensured she never fell sharply.
Hetty’s wealth was inherited by her two children at the time of her death
