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Naturally, many investors are curious about Benjamin Graham’s net worth. In this article, we’ll investigate his net worth and how we built it
Benjamin Graham was an American economist and professional investor. He was born on May 8, 1894, in London, England, and passed away on September 21, 1976, in New York City, United States.
Graham is widely regarded as the father of value investing, and his strategies and principles continue to influence investors today. He is the author of several books, including the classic text “The Intelligent Investor,” which is considered one of the most important books on investing ever written.
Graham’s ideas have helped shape the way many investors approach the stock market, and his legacy continues to be celebrated by investors around the world.
|Date of Birth / Death
|May 9, 1894 / September 21, 1976
|Investor and academic
|Best Known For
|Father of value investing
What Is Benjamin Graham Net Worth?
We estimate that Benjamin Graham’s net worth at the time he passed away was approximately $50.2 million. We based our estimate on the assumption of Graham’s earnings throughout the 30 years he was an investor.
Benjamin Graham Biography
Benjamin Graham was born in London, England, on May 9, 1894. At the age of one, he moved to the United States with his family and finally settled down in New York. Unfortunately, when Graham was nine years old his father passed away.
Despite the hardships of Graham’s mother bringing up three small children, he went on to achieve a scholarship for Columbia University. Where he graduated in 1914 as a salutatorian of his class. Columbia uUniversity offered him to stay on as a professor of math, Greek philosophy, or English.
However, Benjamin Graham had other plans and decided to get a job on Wall Street. He started working as a board boy in the brokerage house Newburger, Henderson, and Loeb. Back in the day a university graduate taking on a Wall Street job was considered unconventional.
Notwithstanding his humble beginnings at the broker, his intelligence came through and by 1920 he had become a partner of the firm making $50,000 a year. That amount is the equivalent of $744,277 in 2022 dollars.
In 1926, Graham founded his own brokerage house with another Wall Street broker, Jerome Newman. They implemented a strategy that at the time was considered innovative. Buying the shares in one company and simultaneously selling the shares of another.
Northern Pipeline Affair
The strategy rewarded their investors with a return of 670 percent over ten years. In the same year, Graham made another discovery. Standard Oil had been broken up into 34 different companies back in 1911. In 1926, the Interstate Commerce Commission required all pipelines to file financial statements. Graham found that despite the shares for this company quoting at $65 the company held railroad bonds for the value of $95. He asked that the board distribute the extra cash to its shareholders. When the board refused he garnered proxy votes among other shareholders.
At the following meeting, with his proxy votes and the votes of the Rockefellers, who he had also contacted, the board was forced to pay $70 a share of excess liquid assets. Graham had unknowingly established himself as an effective shareholder activist and foresightful analyst.
In 1956, when Graham retired from his profession as an investor he moved to California, where he taught at the University of California, Los Angeles, and at the Anderson School of Management, New Mexico.
Benjamin Graham was also a prolific writer and wrote a number of books about investing and monetary policy. His most renowned books are Intelligent Investor and Security Analysis.
How Did Benjamin Graham Build His Wealth?
Graham built his wealth through a combination of successful investing and his career as a writer and teacher. He was a successful investor in his own right, and his investment strategies, which focused on finding undervalued securities, helped him generate significant returns for his clients and himself.
Graham also made significant contributions to the field of investing through his writing and teaching. He wrote several books on investing, which are still widely read and influential today. He also taught at Columbia University’s Graduate School of Business, where he influenced a generation of investors, including Warren Buffett.
In addition to his investing and writing, Graham also had a successful career as a financial analyst and money manager. He co-founded Graham-Newman Corporation, an investment firm that managed money for a number of high-profile clients.
Overall, Benjamin Graham built his wealth through a combination of successful investing, writing and teaching, and his work as a financial analyst and money manager.
How Is Benjamin Graham Net Worth Calculated?
There are no public records as to what Benjamin Graham’s holdings were nor are there any testimonies as to how much wealth he may have generated. So, we used an often-mentioned number for Benjamin Graham’s salary in 1926.
Graham reached a salary of $50,000 in that year and would have presumably made even more with his bonus and personal investments. We rounded up the figure and calculated a progression of increasing income up to 1956 when he retired. We then recalculated the sum presumably accumulated by 1956 into a dollar equivalent value for 2022.
Benjamin Graham’s Investment Style
Benjamin Graham was a firm believer in finding company stocks that were underpriced compared to their book value. Father of the investment strategy known as value investing; he applied this criterion throughout his investor career.
Graham believed that the market price of a security often deviated from its intrinsic value, and that by purchasing securities that were trading at a discount to their intrinsic value, investors could generate strong returns over the long term
To determine if a company was underpriced in the stock market, Graham applied several analyses. One of his most famous was the Net-Net analysis. This ratio consisted of analyzing the net current asset value (NCAV) per share of a company.
The Net-net calculation is made by taking all current assets and cash equivalents minus total liabilities and then dividing by the number of shares outstanding. Graham would then consider investing in companies where the stock price was no more than 67 percent of the NCAV.
He also took a long-term approach to investing, which he clearly differentiated from speculating. He adopted a highly diversified portfolio believing firmly in the need to spread risk across companies and sectors.
Benjamin Graham’s View on Alternative Investments
Graham believed that alternative investments can be an important part of a well-rounded investment portfolio, but that they should be approached with caution.
One of Graham’s key beliefs was that investors should focus on the intrinsic value of an asset, rather than its market price. This means looking at the underlying fundamentals of the asset, such as its income-producing potential or the quality of its management, rather than simply relying on market trends or speculation.
This approach can be particularly useful when evaluating alternative investments, which are often less liquid and less transparent than traditional stocks and bonds. Graham also emphasized the importance of diversification in investment portfolios, and this principle can be applied to alternative investments as well.
For example, rather than putting all of your money into a single real estate property, it may be wiser to spread your investment across multiple properties in different locations. This can help to reduce your overall risk and ensure that your portfolio is not overly dependent on any one investment.
Another key aspect of Graham’s approach to alternative investments was the idea of margin of safety. This refers to the idea of buying an asset at a price that is significantly below its intrinsic value. So, that there is a cushion of protection against potential losses.
Overall, Benjamin Graham’s views on alternative investments were marked by a focus on intrinsic value, diversification, and margin of safety. These principles continue to be highly relevant today and can be useful for investors who are looking to include alternative investments in their portfolios.
Who Else Invests Like Benjamin Graham?
Not all investors have the same investing style. To compare investors like Benjamin Graham you can check out some of the profiles listed below:
Want to Invest Like Benjamin Graham?
If you want to invest like Benjamin Graham you should understand his core concepts. Only invest in companies that are undervalued and have a clear potential for the future. Then spread your portfolio of stocks across several companies and sectors.
Graham believed that the average investor should have at least 30 different stocks and that alternative assets were also necessary to bring balance and protection. You can take advantage of a tax-enhanced environment when investing through a self-directed IRA. We have made a list of the best companies, you can read our reviews of them here