The Difference Between Wealth and Well-Being – Morningstar

Hetty Green was known as the “Witch of Wall Street.” She earned this moniker partly due to the single, dour, black dress that she wore daily, but mostly for her reputation as a litigious and greedy woman whose miserly ways led to her son losing a leg.

During the Gilded Age of Wall Street, while the Carnegies and Rockefellers were building their fortunes and their mansions, Hetty inherited her own small fortune of $5 million. Through wise investments, she turned this into more than $100 million (more than $2 billion in today’s dollars), making her the richest woman in the world at the time. Unlike her better-known contemporaries who left legacies in business and philanthropy, Hetty left a legacy of tightfistedness and self-delusion.

As the story goes, when Hetty’s son injured his leg, she could have taken him to the best hospitals in the world but chose instead to dress in rags and take him to the free clinics in New York City. In Hetty’s defense, she did take him to the best physicians, but she didn’t want to pay them, instead learning what hours they volunteered at the free clinics and visiting then. The time it took to search for this free treatment led to an incurable case, and rather than heal the leg, the doctors removed it. When she suffered a hernia herself, she refused to have an operation and used a stick to put internal things back in place when necessary.

Sound Investments, Unsound Mind

Hetty built her fortune by buying undervalued assets and holding them until they were in high demand. She sold only when buyers came hounding, and often still turned them away. She also lived an extremely frugal lifestyle. While others built family compounds, Hetty lived in a small apartment. She bought a new dress only when her current one wore out.

Some may see Hetty as a model of clever money management, and she was quite a brilliant investor. By any financial measure, Hetty would be said to have been in excellent financial health, but I disagree. She lived simply, but not contentedly. She spent many years of her life in legal battles with family over assets she believed should have been given to her rather than charity. Although Hetty had objectively more money than almost everyone else in the …….