Wall Street and Hetty Green: Women’s History Month Feature

Who was the “Witch of Wall Street?”

The world was not ready for Hetty Green. She possessed an uncanny ability to predict the timing of market fluctuations, enabling her to turn a modest inheritance into a fortune. She became the richest woman in America during her era. Unfortunately, her gift for money matters and commitment to financial independence was not considered a virtue. She was misunderstood, maligned, and isolated. Her perseverance in the face of such negativity is a powerful lesson for us today.

Living on Her Own Terms

Hetty Green was not an appreciated commodity. She was surrounded by negative press and gossip, especially about her frugality, leading to the nickname “Witch of Wall Street.” She carried a gun and wasn’t afraid to use some of the crude words she picked up from hanging around the New Bedford docks. But more importantly, her financial success, especially her ability to pick winning investments, created significant jealousy, especially when women were not supposed to handle money.

Undeterred, Green blazed a new trail for women as financial leaders.

Wall Street

Financial Literacy Came Early

Henrietta Howland Robinson (later to become known as Hetty Green) was born in 1834 in New Bedford, Massachusetts. Her father owned what was then the largest whaling company in New Bedford. Whaling was a very lucrative business in those days.

Green’s maternal grandfather, Gideon Howland, was also very wealthy. He had poor eyesight and relied upon her to read the financial papers for him, starting when she was only six years old. He also asked her to read bond yields, stock quotes, commodity prices, and books related to money matters. She developed analytical skills early, preparing her to become a significant player on the American stock market scene.

Green’s father left the whaling business, moved to New York, and established himself in the cargo industry. Hetty remained in New Bedford until after the death of her mother. She then moved to New York to help her father build a portfolio of bonds, stocks, and real estate.

Pay Yourself First

Hetty Green opened her first bank account at the age of eight, but the initial installment of real wealth came upon her father’s death in 1865. She inherited five million dollars and immediately became one of the richest women in America. Green used this inheritance to make her debut into the world of investments.

Government Bonds

Hetty took her inheritance and bought post-Civil War government reconstruction bonds. Already a risk-taker, she had no qualms about investing in a government that most considered to be unstable. Her prudence paid off. By 1874, a million dollars was added to her portfolio courtesy of the interest earned from her bond investments.

Ironically, those who lacked confidence in the government put their money into the railroads. That move became regrettable when railroad bonds collapsed in 1872, bringing three banks down with them. Green grabbed as many railroad stocks as she could at the collapsed prices.

A Great Example of Grit

There were many upsetting episodes in Hetty’s life. The natural heir to several family fortunes, she often found herself either cut out or her inheritance placed in trusts outside of her control.

Nevertheless, Green developed strategic investment insights. She became adept at studying market trends, knowing exactly when to sell and purchase stocks to maximize her gains. Green didn’t believe in investing and holding. She understood that timing was the key, and at this, she was a genius.

Green engaged in substantial research and availed herself of the expertise of others. She accomplished all of this with only a finishing school education. She learned how to entertain guests and keep a proper house.

At her death in 1916, Green’s estate was worth more than $100 million in liquid assets. She began with a $5 million inheritance.

“Witch of Wall Street”

How did Hetty Green come to be called the “Witch of Wall Street”? After her husband died in 1902, she donned typical black clothing and wore this color for the rest of her life. Clearly, the little black dress hadn’t made its debut yet.

Hetty Green was relentlessly criticized for her frugality. It was expected that a woman of such wealth would have an extensive wardrobe, fancy houses, and cars, and throw lavish parties. Green’s idea of how to invest money was in stark contrast to her peers, who at this point didn’t even have the right to vote. She hung out with men in a “man’s world,” earning her disdain rather than praise.

Despite the accusations of being stingy, Green was a generous donor to pediatricians, Barnard College, the Nurses Home, multiple other charities, and several families who relied on her support for decades.

“Queen of Wall Street”

Hetty Green also earned the nickname “Queen of Wall Street.” In a male-dominated world, Green became a much-sought-after expert on the topic of investment and high finance. She survived the 1907 panic due to her ingenuity and rigorous investment research.

Green was one of the few with a liquid portfolio, which allowed her to pick up stocks at bargain prices and make real estate and mortgage investments. Her liquid assets also enabled her to serve as a lender. After the panic of 1907, many investors found themselves indebted to Hetty Green. She bailed out New York City on several occasions. Her strategy of investing for value ultimately made her the richest woman in the world.

The Importance of Financial Literacy

Hetty Green revealed her philosophy on life during a series of interviews. She stressed the importance of financial literacy for women, whether they would inherit money or not. She believed that all women should know about bank accounts, interest rates, bonds, mortgages, and other financial instruments.

Hetty Green set many records, becoming a dominant force among her male colleagues. By all accounts, she was one of the most astute investors of her time. She was forthright and perhaps intimidating. Her promotion of financial literacy and independence for all women is a legacy that survives to this day.

 

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