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‘She ran rings around Warren Buffett’: This IRS auditor secretly turned a $5K nest egg into a $22M fortune — here are the 3 simple strategies that made Anne Scheiber rich

‘She ran rings around Warren Buffett’: This IRS auditor secretly turned a $5K nest egg into a $22M fortune — here are the 3 simple strategies that made Anne Scheiber rich
‘She ran rings around Warren Buffett’: This IRS auditor secretly turned a $5K nest egg into a $22M fortune — here are the 3 simple strategies that made Anne Scheiber rich

Anne Scheiber never brought home more than $4,000 a year or received a promotion in her 23-year IRS career — but when she died at the age of 101, the former auditor had amassed a fortune of over $20 million.

Scheiber, who strongly believed she was held back due to being a Jewish woman, had retired at 51 in 1944 with just $5,000 in savings.

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Over the next five decades, she turned that nest egg into a portfolio of carefully-selected stocks, launching herself from her unremarkable first career into a stunningly successful second act.

"You think Warren Buffett, you know, that guy, was good at this sort of thing?" her lawyer, Ben Clark, told The New York Times after she died in 1995. "She ran rings around Warren Buffett."

Here’s how she put the Oracle of Omaha to shame.

She was extremely frugal

Even while growing her substantial wealth, Schieber kept a frugal mindset, choosing to live off just her small pension from the IRS and her Social Security, her broker William Fay told The Washington Post.

She wore the same black hat and coat everyday — through summer and winter — and regularly walked to work to save on bus fare.

"She was saving 80% of her salary, at least," said Clark, according to Money Magazine, adding that he didn’t think Scheiber spent more than $2 on food a week.

“In those days you could get a hot dog lunch at Nedick's for 15 cents, but I know she found an even cheaper place."

While Scheiber often went to extremes to save money, she was clearly dedicated to spending far less than she earned, which left her plenty of funds to add to her portfolio.

If you want to find more space to free up cash, consider making a budget and formalizing how much you set aside to invest either every paycheck or on a monthly basis. Regularly contributing to your portfolio — even in small amounts — is one of the simplest strategies in buidling wealth.

Read more: Millions of Americans are in massive debt in the face of rising rates. Here's how to get your head above water ASAP

She invested in what she knew — and for the long term

Many experts (like Buffett himself) recommend investing in what you know — and that’s just what Scheiber did. Her portfolio included PepsiCo and Chrysler, pharmaceutical brands like Pfizer and Bristol-Myers and, as a nod to her love of movies, entertainment companies such as Columbia and Paramount.

She also kept herself informed by attending these companies' shareholder meetings — with a bag in hand in case they provided a free lunch, of course.

And like Buffett, Scheiber was a patient, long-term investor, who reinvested her dividends and interest and rarely sold any of her stocks, even when they were floundering.

"She was never looking for a quick buck," Fay told The New York Times. "Her whole idea was to get performance on a long-term basis. She felt over the long run the value would grow."

Scheiber might even have earned herself even more by starting her investing journey earlier in life. The longer you invest, the more likely you’re able to score higher returns, through the power of compounding.

She was a tax-efficient investor

As a former employee of the tax agency, Schieber found ways to avoid paying them more than she had to. She held onto her stocks rather than selling them, which helped her avoid capital gains taxes. And since she reportedly hated paying commissions, later in life, she transferred some of her dividends into tax-exempt bonds.

There are other ways you can be more tax-efficient with your investing as well, like investing through a Roth IRA, which is taxed upfront, meaning all your withdrawals in retirement will be tax free.

Conveniently, Schieber always planned to leave her money to education, which as a charitable donation, ultimately reduced her estate’s tax burden.

Yeshiva University, the private Orthodox Jewish university in New York City she bequeathed the bulk of her estate to, still honors her donation by offering the Anne Schieber scholarship for financially and academically deserving Jewish women studying at Stern College for Women and Albert Einstein College of Medicine.

"She got a lot of satisfaction knowing she was leaving this money," Clark reportedly told People magazine. "She'd say, ‘Someday, when I'm long dead, there will be some women who won't have to fend for themselves.'”

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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