Building Wealth In the 1940s, the small town of Quincy, Florida became one of the richest towns per capita in the United States... and it was all thanks to Mr. Pat.
Mr. Pat created multiple generations of millionaires with a single idea... really, just a single observation.
Mark Welch "Mr. Pat" Munroe noticed that even during the depths of the Great Depression, folks would still spare a few cents to buy a cold Coca-Cola.
His daughter explained that "Daddy liked the taste... and he figured folks would always have a nickel for a Coke."
Munroe ran Quincy State Bank in his hometown of Quincy, Florida. He wasn't a professional stock investor, but he reviewed the profits and return on capital at Coca-Cola (KO) and determined it was a stellar business.
At the time, Coca-Cola shares had fallen to $19 – after going public at $40 in 1919 – due to tumult in the sugar industry.
Mr. Pat snatched up shares... And he told everyone in Quincy to do the same.
As the story goes, farmers would come into Quincy State Bank for a $2,000 loan, and he'd offer them $4,000 on the condition they put half in Coca-Cola shares. (As conservative investors, we think that may have been a step too far.)
He also steeled the nerve of the townspeople and convinced them to keep holding through all sorts of worrisome market fluctuations.
The result: Quincy, Florida boasted 67 "Coca-Cola millionaires" back in the 1940s, when the town had only about 4,000 people. Back then, a million dollars was an incredible amount of money.
When he died in 1940, Munroe was able to leave $1 million for each of his 18 children.
During recessions and economic downturns, Quincy fared better than the rest of the country. Like he thought, people would always come up with a nickel for a can of Coke.
And you can see how it happened. A single share of Coca-Cola that traded for $19 in the 1930s, with dividends reinvested, would now be worth more than $10 million.
This is the story of how to get rich.
Yes, we'd prefer a little more diversification. But when you hear of quiet, generational wealth, this is how it happens... by holding quality investments over a long time.
We've shared stories like this before... In 2021, we wrote about Ronald Read – a janitor who, when he died, had an estate valued at roughly $8 million. Read donated $1.2 million of that to a local library and $4.8 million went to Brattleboro Memorial Hospital, a place where he would regularly get breakfast.
Read would live below his means and put any excess money into stocks.
He typically bought stocks that he knew and could understand. Think of stocks like Procter & Gamble (PG), Colgate-Palmolive (CL), and Johnson & Johnson (JNJ).
He owned many of these stocks for many decades, letting his wealth compound.
The secret to wealth is not complicated: hold great businesses for a long. It's no secret. But of course, it takes patience and discipline.
Stansberry Research founder Porter Stansberry knows this more than most. He recently put together a portfolio of "forever stocks" – companies with durable competitive advantages and ones that are capital efficient.
While Porter is not the most optimistic on the economy and market, he knows that every investor needs to own stocks.
The trick is this: Cash earns no real return. Gold is just a metal. Bonds are someone else's debt.
But true high-quality businesses create actual value from capital.
Porter recently went on camera to discuss what exactly is happening with our economy and stock market. And he's offering folks a chance to buy his "forever portfolio" for a tremendous discount – something that won't last for long.
If you haven't already seen Porter's presentation, click here to watch.
What We're Reading...
- Something different: McDonald's gets a lift from diners turning to its cheaper menu and new launches.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
November 1, 2023