Have you ever heard of the Witch of Wall Street? She was the richest woman in America during what was known as The Gilded Age. Which in and of itself is a cool time period. And if you live in the North East, chances are you’ve visited the summer “cottages” of the Gilded Age millionaires. While she as the richest woman, she was also quite possible the meanest. So you probably didn’t see her hanging out in her mansion on Newport in the summer.
Who Was Hetty Green?
If you’re a fan of financial history, you may have heard the name Hetty Green at one point during your research. She’s definitely not a household name these days but in her time period, she was widely known as the ‘richest woman in America’.
While at the same time earning the title of the ‘greatest miser’ in the Guinness Book of World Records. Some may not think being known as the greatest miser is a noble accomplishment. However, the witch of wall street Hetty took great pride in the title. The fortune she amassed by the end of her life was proof that it was a fitting description.
Hetty Green was born in 1834 into money, the daughter of one of the richest whaling families in Massachusetts at the time. Her family were Quakers by religion. And indeed some of the group’s common traits were seen exhibited by Hetty later on in her life.
She found herself interested in business from a young age when she read the stock and commerce reports from the newspaper to her father and grandfather. By the age of thirteen, Hetty had been trusted as the family bookkeeper for the companies that her father was running.
Hetty inherited several small fortunes throughout her life; one from her mother, one from her aunt, and then a large one from her father valued at $6 million. Which would be valued at well over $100 million today.
The Witch of Wall Street
Long before there was Jordan Belfort as the Wolf of Wall Street, Hetty was labelled the Witch of Wall Street. Although it had nothing to do with magic or potions. The nickname came from Hetty’s plain black dresses that she always wore. They were so dour they resembled a witch’s cloak. Why did Hetty dress this way?
While most believe it was her true miserly ways that led her to just wear the one plain black dress and only replace it when it was worn out, some also believe that it had something to do with her Quaker heritage. A common belief amongst Quakers is that people should dress in plain clothes in order to not flaunt greed or wealth.
And if there was one figure who never flaunted their wealth, it was Hetty Green. When picturing the richest woman in America, you may envision lavish parties and fancy decorations and artwork inside of her home. But Hetty was the opposite of this.
She famously refused to pay for heat or even hot water as she deemed them an unnecessary extravagance. Green ate simply as well. Instead, opting for meals of just eggs, dry oatmeal, and onions, and didn’t even rent her own office to conduct business. Her frugality had a downside though. Her son was forced to amputate one of his legs after Hetty took far too long looking for a free clinic.
What Did Hetty Green Invest In?
Remember that Hetty was investing during the mid-1800s so there were no high flying tech stocks or cryptocurrencies she could buy. Instead, Hetty focused on the foundational investing methods such as real estate, compound interest.
As a result, the witch of wall street became New York City’s largest lender. She reinvested her gains into industries like railroads and natural resources.
One of Hetty’s well known quotes is: ‘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.’ Sounds like buy low sell high to me!
Hetty made sure to strike fast and take advantage of beaten down stocks and companies or homes that were about to be foreclosed. She also made a habit of lending money to cities and governments; causing some critics to refer to her as a pawnbroker or a loan shark.
In total, Hetty took her $6 million family inheritance and turned it into a fortune that was valued at an estimate of over $2 billion today. Despite her miserly ways, Hetty was well known for her philanthropy and often donated money to hospitals, churches, and charities. She also donated her own time and efforts as a nurse to her friends, family, and neighbors.
Her children had the same idea when they both passed away. They left much of the fortune that had been amassed throughout the years, to colleges, hospitals, and other charities.
What Males Did the Witch of Wall Street Influence?
Some call it miserly, others buying low and selling high, but to most, Hetty Green’s investing style laid the groundwork for the modern day equivalent of value investing. Hetty’s impact was made long before buying and selling stocks on smartphones; or yolo’ing your money into Dogecoin. But there’s definitely a slow and steady wins the race mentality for value investors that Hetty perfected. Let’s look at the male investors that the witch of Wall Street influenced.
Benjamin Graham: The father of value investing came onto the scene a little after Hetty did. However, their careers overlapped at one point. Graham wrote two books that are considered by many to be the fundamental guides to investing. Those titles are “Security Analysis” and “the Intelligent Investor”. Graham famously took a 50% stake in the insurance company Geico in 1948 that cost him $712,000. This investment grew to be over $400 million by 1972. It was eventually acquired by the next investor on this list. Lucky investor!
Warren Buffett: Considered by most to be the greatest value investor to ever do it, Buffett invests in beaten down companies when nobody else wants them. As a result, he reaps the rewards when the businesses bounce back. He’s known for investing in American companies that he believes are durable. For example, Apple, Coca Cola, Bank of America, and General Electric. Buffett himself is a known miser in his own life. But he’s also pledged to give away 99% of his fortune to philanthropic causes for the betterment of the world. Sounds a lot like Hetty to me!
The Females Influenced by the Witch of Wall Street
Cathie Wood: This one is controversial. There are those who’ve soured on the lead investor at Ark Invest during the recent market downturn. But perhaps this has more to do with Hetty Green paving the way for women to succeed in a financial world that’s traditionally been male-dominated. If you think Cathie Wood and other female investors have it difficult now, imagine what Hetty had to go through back in the 1800s. Wood focuses on growth stocks and industry disruptors. She also institutes her own style of value investing by having conviction in companies and buying the dips when those stocks fall.
Geraldine Weiss: Another female who struggled with her investing success due to her gender, Weiss went so far as to hide her name in the investing newsletter she wrote. Weiss became known as the Dame of Dividends. Why? Her strategy is one of targeting dividend paying companies as a sign of financial strength. Weiss was a trailblazer for income investors. She’s another successful female investor who benefited from Hetty Green paving the way.
Hetty Green: The Queen of Wall Street
By now, you’ve probably realized that all of the nicknames that Hetty Green received over the years were well deserved and accurate. Since records from that far back are difficult to find, let alone verify, it’s widely assumed that Hetty Green spent most of her life as one of the richest women in the world.
In a time where women were barely given any liberties as citizens, Hetty managed to build and maintain a fortune that far exceeded that of most male investors and financiers of her time.
Hetty Green was a trailblazer. She was one of the most important figures of the Gilded Age of America, back when being a floor trader was all the rage. While much of history acknowledges and revolves around the successes of male investors like the Rockefellers, the Carnegies, and the Roosevelts, Hetty Green had just as much of an impact on the history of investing as any of them.
Hetty believed in and advocated for girls rights to learn investing and the fundamentals of business from a young age. She also laid the future groundwork for the school of value investing. Benjamin Graham and Warren Buffett are long considered the pioneers and kings of value investing.
But much of the principles were first introduced by Hetty Green. If it weren’t for the witch of wall street, modern day female investors like Cathie Wood wouldn’t be continuously changing the way we think about investing with her groundbreaking style of ETFs. So next time you hear Hetty referred to as the Witch of Wall Street, remember that she was just as commonly known as the Queen of Wall Street too.