NEW YORK (MainStreet) In her book The Richest Woman in America (Nan A. Talese, 2013), Janet Wallach chronicles the cosmic ascension of Hetty Green, who had amassed $100 million (equivalent to some $2.5 billion today) by the time of her death in 1916. A true self-made female tycoon, she was an anomaly in her day.
It was in 2007 that Wallach first discovered Green, and when the Great Recession arrived in 2008, as the writer poured over her research and scanned the newspapers of Green's era, Wallach realized the true genius of her new obsessional figure; Green had lived through the financial panics of 1873, 1893 and 1907, and not only did she survive, but she also came out on top.
To excavate the strategies of Hetty Green that led her to become the richest woman in America, MainStreet posed the following questions to Wallach.
Today we have female billionaires from Spanx founder Sara Blakely to Oprah Winfrey: what attributes do the modern female tycoons share with Hetty Green? Which women (or men) is she most similar to in today's world?
Wallach: Like Hetty Green, each of these modern women billionaires is a pioneer venturing into unknown territory, ready to face anyone, male or female, who stands in her way. It takes tremendous courage and fierce belief in yourself to start a business or invest your money when everyone tells you you're wrong. Sara Blakely fought against long-established trends in her industry and refused to give up; Oprah Winfrey crossed color and gender lines with her ventures. Hetty Green dared to go beyond the boundaries of Wall Street. She was a woman who bashed the male bears and bought when they were selling; she battled the male bulls and sold when they were buying. Her instincts were to go against the crowd mentality. But her actions were met with rejection, resentment and repudiation.
Hetty Green was the female Warren Buffett of her time. She believed that common sense was essential to making money. She studied her companies, read everything she could, talked to anyone who knew anything about them, and only when she was convinced of the real value of the business did she buy or sell. Like Buffett, she believed that financial crises presented a great opportunity for investors. On a more personal level, she, like Buffet, lived simply, and derived her pleasure not from spending money but from making it.
We typically think of the Protestant ethic as integral to the spirit of capitalism, but what features of her Quaker father and upbringing shaped Green's business savvy?
Wallach: Her Quaker father taught her never to borrow, never to owe anyone anything. He was a shrewd businessman, fair, and tightfisted. His business partner, William Coleman, remarked, "He was a good fellow in the main. But he exceeded any man I ever knew for ingenious expedients for saving a dollar."
Hetty grew up in New Bedford, Mass., where hard working New Englanders felt that prosperity was a virtue. The Quakers believed that wealth was the visible sign of election by God. Hetty's father often reminded Hetty that it was her responsibility to preserve the family wealth and pass it on to the next generation. She went further and enlarged it exponentially. She increased her own sense of worthiness as she expanded her wealth.
Green was such an anomaly in her dayto be such a powerful female even before women's suffrage. What lessons can today's women in business learn from her maverick ways?
Wallach: The first lesson is to be true to yourself. Stay with what you believe, and do what you feel is right for you. Use common sense; as Hetty Green said, it's your strongest asset. Hetty Green believed she was as capable as any man. She did her homework. Despite her public image, she won the respect of those who knew her, because she was more knowledgeable about her investing than almost any of her male colleagues.
Some of her other advice:
- In business generally, don't close a bargain until you have reflected on it overnight.
- It is the duty of every woman to learn to take care of her own business affairs.
- When good things are so low that no one wants them, I buy them and lay them away in the safe; when owing to some new development, they go up and my shares are so needed that men will pay well for them, I am ready to sell.
- Railroads and real estate are the things I like. Government bonds are good, though they do not pay very high interest. Still, for a woman, safe and low is better than risky and high.
- Common sense is the most valuable possession anyone can have.
Cleanly navigating a recession while preserving and amassing a fortune is no easy task: how could modern investors learn from Green's prudence and investing prowess during tough times?
Wallach: Hetty Green recognized the danger of mob thinking. She never allowed herself to be swept up in the madness of crowds but, instead, followed her own instincts. She did not borrow, did not buy on margin and did not gamble on risky companies. She kept cash in reserve and used it when prices were low to invest in solid businesses. She sometimes paid a high price for her independence and was laughed at in public. In the end, she had the last laugh when she became richer than most of the tycoons of her time.
Interview conducted by Ross Kenneth Urken for MainStreet