The Fascinating Tale of the "Witch of Wall Street"

TL;DR

Hetty Green became the “Witch of Wall Street” by combining early business training, rigorous research, extreme frugality, cash reserves, and contrarian investing. After inheriting about $5–$7 million from her father, she invested in Civil War bonds and later greenbacks, railroads, and real estate mortgages. Read on to see how her disciplined strategy, family disputes, and troubled marriage shaped her fortune.

Transcript

Long before the likes of Warren Buffet, Hetty Green dominated Wall Street through extremely shrewd investing, frugality, and exploiting the lax investment rules of her age, managing to amass one of the greatest fortunes in history. Hetty, born Henrietta Howland Robinson in 1834, was the daughter of Edward and Abby Robinson. The family first made th... Read More

Key Insights

• 🇬🇱 Hetty Green became one of the wealthiest individuals in history through shrewd investing.
• 😀 She faced challenges and legal battles in her pursuit of wealth, including forging a will.
• ❓ Hetty's frugality and aversion to debt contributed to her financial success.
• 🤑 Despite her reputation as a miser, she was not afraid to spend money on her children's well-being.
• ❓ Hetty's investment skills contrasted with her husband's speculative and risky behavior.
• 🥺 Her son inherited her fortune but did not possess her frugality, leading to financial troubles.
• ⛽ Hetty's reputation as the "Witch of Wall Street" was fueled by rumors and sexism.

Questions & Answers

Q: Who was Hetty Green, the “Witch of Wall Street”?

Hetty Green, born Henrietta Howland Robinson in 1834, was a remarkably shrewd and frugal Wall Street investor. She amassed one of history’s greatest fortunes by researching investments, avoiding debt, keeping cash available, and buying heavily when others were cautious.

Q: How did Hetty Green amass her fortune?

Green inherited about $5–$7 million from her father and invested her available funds in U.S. Civil War bonds. She later invested in greenbacks, American railroads, and U.S. real estate mortgages while following strict rules about research, debt, cash reserves, and selling targets.

Q: How did Hetty Green learn about business and investing?

Her business education began at age six, when she read financial news to her grandfather Gideon Howland and discussed it with him. She opened her first bank account two years later, began investing her allowance shortly afterward, and managed the family bookkeeping by age 13.

Q: How did Hetty Green’s family make its original fortune?

Her great-grandfather went to sea as a whaler, beginning the family’s rise in wealth. Within two generations, her father and maternal grandfather had built one of North America’s largest whaling fleets, and her father increased the family fortune twentyfold during his lifetime.

Q: Why did Hetty Green challenge her aunt’s will?

Her aunt Sylvia Ann Howland left most of her roughly $2 million fortune to charity, her doctor and caretakers, and several cousins instead of Hetty. Green challenged the will and presented a forged replacement, but lost Robinson v. Mandell when the court determined that the signature was forged; she ultimately obtained approximately $600,000 from the estate.

Q: What investing principles did Hetty Green follow?

She kept large cash reserves, invested heavily when others were conservative, and sold when an asset reached the price she had targeted. She also avoided debt, stayed calm during crises, and researched every investment extensively before committing money.

Q: How did Hetty Green’s marriage affect her finances?

Before marrying Edward Green in 1867, she required that their finances remain separate and that neither spouse could claim the other’s money. This protected her fortune when Edward lost his $2 million through speculative, debt-funded investments, although she bailed him out several times before separating from him.

Q: What did Hetty Green do with the $1,200 wardrobe her father bought her?

Her father bought the wardrobe so she could attract wealthy men in Boston and New York. Green had no interest in that plan, so she sold the clothing and invested the proceeds instead.

Summary & Key Takeaways

• Hetty Green's family built a large fortune through whaling and her father increased it significantly.

• Hetty started her business education at a young age and became skilled in investments.

• She inherited her father's estate, invested in risky Civil War bonds, and challenged her aunt's will in court.