Her dividend income grew bigtime

For some reason, Anne Scheiber is on my mind today. Maybe because I'm thinking about retiring from my federal civil service job, and I'm older now than she was then.

You may have heard of her. Despite her graduate degree, she was repeatedly denied promotions, so she retired from the IRS in 1944 at the age of 51. She had saved up $5000 (even though her highest annual salary was $3150).

She spent the rest of her life living in a rent-controlled apartment in New York City on her civil service pension. She apparently spent very little money. She read THE WALL STREET JOURNAL every day at the library of a nearby woman's college, Yeshiva University.

When she retired, she took that $5000 savings and invested it in stocks. By the time she died -- 50 years later -- she had a portfolio worth $22 million. The dividends and interest she received annually amounted to over $800,000. She reinvested this money based on her research in THE WALL STREET JOURNAL.

She bought stocks because she noticed during her career with the IRS that rich people owned a lot of stocks. In later years she did move some money into bonds and such fixed income investments.

She got her revenge on the federal agency which refused to promote her. She never sold any of her investments. Therefore, she never paid any capital gains tax.

Also, when she died she donated the entire $22 million to Yeshiva University, no doubt to make sure they never stopped subscribing to THE WALL STREET JOURNAL so that other thrifty and eccentric multi-millionaires could read it.

She never benefited from the capital gains her investments earned, since she never sold her stocks. But she could have avoided paying capital gains taxes and still spent some money on herself thanks to the dividends her stocks kept paying her.










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