Dividend Millionaire – Agnes Plumb

Agnes Plumb became a millionaire after she inherited a single stock from her father and held on to it for decades. Her net worth reached around $98 million. Few knew she was wealthy at her death, making her a secret dividend millionaire.

This story is one of intergenerational wealth. Agnes inherited her wealth from her father’s investment and simply held on to it. She reportedly collected hundreds of thousands of dollars in dividends each quarter. Additionally, she lived very frugally with little in the way of expenses. Agnes never had a job that anyone knew about. Her main activities were her hobbies, cat, and charities.

Agnes inherited Kellogg’s (K) stock from her father, a lawyer. He reportedly knew W.K. Kellogg, the founder of the cereal company, who convinced him to buy stock. The shares split many times and eventually reached a total of 1.3 million, worth nearly $100 million, generating an enormous passive income stream. Indeed, Ms. Plumb could live off dividends.

Agnes Plumb died in 1996 at the age of 88. After her death, she donated most of her wealth to four charities. Ms. Plumb gave $22.5 million each to The Crippled Children’s Society, the Orthopaedic Hospital in Los Angeles, UCLA School of Medicine, and the St. Jude Children’s Research Hospital in Memphis. The remaining money she gave to four couples, who were family friends. They each received $8 million. Her hairdresser received her home.

Agnes Plumb’s Biography

Edith Agnes Plumb was born in roughly 1907 in Warrior Run, Pennsylvania. She was 88 at the time of her death. She was the child of Henry and Edith Plumb. Her father was a lawyer. Around 1935, she moved to Studio City, California from Wilkes Barre, Pennsylvania.

Reportedly, Agnes seemingly did not have a job; instead, she was living on dividend income from her one stock holding. Her main activities were collecting dolls, doing crossword puzzles, watching television, and donating money to charities to help kids. Agnes owned more than 2,000 dolls. She also enjoyed her cats. In addition, she attended to her mother, who needed a wheelchair because of an earlier injury before she died in about 1960. She never married and had no children, a common trait of the secret dividend millionaires.

Ms. Plumb lived in her home on Chiquita Street in Studio City, California, for approximately 60 years. Her neighbor apparently had known her since 1935. She died on October 21, 1995, at the age of 88, from heart disease.

Agnes Plumb’s Stock Holdings

Her portfolio consisted of one stock, Kellogg. Agnes Plumb owned ~1.3 million shares when she died. According to Kellogg’s dividend history website, the annual dividend was $1.50 per share at the time. Note the stock split again on August 8, 1997, and the split-adjusted value is now $0.75. Hence, her portfolio generated roughly $1.95 million annually or $487,500 per quarter.

The duration of stock ownership by Agnes and her father was not clearly known. But certainly, it was many decades. Kellogg was founded in 1906, and assuming Henry bought the stock around that time; they owned it for almost 90 years. In any case, the number of shares, principal value, and dividend income snowballed. Kellogg has a long history of dividend increases, and it is currently a Dividend Contender.

Besides her one stock portfolio, Agnes owned her home.

How Agnes Plumb Became a Millionaire

Frugality

Agnes Plumb was frugal and lived simply. But this characteristic was not essential to becoming a millionaire. The fact that she probably did not have a job suggested her family was already rich. However, frugality likely helped her grow her wealth. She had minimal expenses and probably owned her home, allowing her wealth to increase rapidly.

Luck

Ms. Plumb had the good fortune of inheriting stock in a company that grew dramatically during her life. Although she did not buy any stocks independently, her luck was caused by a sequence of events outside her control. Her father knew the founder of Kellogg; he purchased stock and held on to it. She was also lucky that Kellogg did not stumble, allowing her wealth to snowball despite the concentration risk.

Buy-and-Hold Strategy

Agnes Plumb relied on a buy-and-hold investing strategy for her success. However, this approach was primarily an accident because she was not interested in the market or buying and selling stocks. Obviously, by the time she inherited her parents’ wealth, Agnes could already live off the dividends.

Because Agnes held the Kellogg stock for decades, reinvesting the dividends, she became rich. Moreover, she lived into her late-80s, giving her time to leverage the power of compounding. To quote Charlie Munger, the business partner of Warren Buffett,

“The big money is not in the buying or the selling, but in the waiting.”

Final Thoughts on Dividend Millionaire – Agnes Plumb

Agnes Plumb had a significant advantage on her path to riches. She inherited stock from her parents. Next, she lived frugally and simply. Consequently, her wealth accumulated. She did not live outlandishly but did enjoy her hobbies and donating money to charities.

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