Published in Investing on 31 March 2010
Through investing, even a tramp can become a millionaire...
Earlier this week, news emerged of a remarkable man who managed to amass a sizeable fortune while living rough.
Curt Degerman, from the Swedish town of Skellefteå, died of a heart attack 18 months ago at the age of 60. Local people knew Degerman as a tramp that scraped together a living by collecting scrap metal and food and drink cans for recycling. For 40 years, he lived a solitary existence, rummaging through bins for recyclables and eating leftovers from fast-food restaurants.
However, after his death, it emerged that "Tin Can Curt" was an avid reader of the financial pages and an astute investor. By reading Dagens Industri -- the Swedish equivalent of the Financial Times -- in his local library, Degerman invested his collected deposits carefully. On his death, his fortune was estimated at more than £1.1 million.
A predictable family feud
Somewhat inevitably, news of Degerman's secret wealth sparked a family feud among his relatives. Degerman's Will left his estate to a cousin who visited him often. However, another cousin contested the Will on the basis that his father, Degerman's uncle, was the legal heir.
A Swedish judge urged the feuding heirs not to waste their money on legal fees and, instead, reach a private arrangement, which they have now done.
What's in a tramp's portfolio?
Apparently, Degerman was an academic child, but dropped out of education and mainstream society in his late teens following personal problems. So, how had he invested his money -- and what can we learn from him?
Degerman clearly knew that investing in businesses produces the best long-term returns, as the majority of his portfolio was in stock market-listed companies. Also, he knew about tax planning, because his share portfolio (worth £731,000) was held in a Swiss bank account. Degerman also saw gold as a shrewd investment: his safety-deposit box held 124 gold bars worth £250,000.
Despite never spending any money, Degerman also had £4,300 in his current account and a further £275 of spare cash at home. Thus, despite not needing any cash, he kept some liquidity at hand, perhaps to fund his next share purchase?
Other wiser misers
To me, this is a familiar tale of a wiser miser; who amasses considerable wealth but has no interest in spending it. Similar stories of eccentric millionaires emerge frequently, often revealed by a generous charitable donation on death.
The story of "Tin Can Curt" Degerman is a fascinating and extreme case study that reinforces the core principles of wealth-building, while also offering some profound and cautionary lessons.
The Expansion: Unpacking the Paradox
Curt Degerman is a walking paradox, and that's what makes his story so compelling. He embodied two contradictory identities:
The Public Persona: "Tin Can Curt"
Lifestyle: A homeless tramp, living a solitary existence for 40 years.
Income Source: Scrounging for scrap metal and cans, the most marginal of incomes.
Appearance: The definition of poverty.
The Private Reality: The Astute Investor
Mindset: An "academic child" who applied his intellect to the financial markets.
Habits: A disciplined reader of the financial press (Sweden's Financial Times), implying deep research and a long-term perspective.
Strategy: A sophisticated, globally-diversified portfolio of stocks, gold, and cash, held in a Swiss bank account for tax efficiency.
This paradox shatters our conventional assumptions about wealth. It proves that wealth is not a product of your income, your appearance, or your social status. It is a product of your behavior, mindset, and financial system.
The Elaboration: The "How" Behind the Fortune
Let's break down the brilliant, albeit extreme, financial system Degerman built:
Extreme Savings Rate: This is the foundation. He lived on virtually nothing. Every single krona he earned from collecting cans was potential investment capital. His savings rate was likely close to 100%. This demonstrates a universal truth: Wealth is created in the gap between your income and your spending.
Financial Literacy & Self-Education: He didn't have a finance degree. He educated himself for free in the library. He understood that to grow money, you must first grow your knowledge. His choice of reading material—a serious financial newspaper—shows he was focused on business fundamentals, not get-rich-quick schemes.
Strategic Asset Allocation:
Equities (Stocks): The core of his portfolio (£731,000). He knew that owning pieces of profitable businesses is the best path to long-term wealth creation. This is the exact same principle as Anne Scheiber and Warren Buffett.
Gold (£250,000): A classic store of value and a hedge against inflation and systemic risk. This shows he wasn't naive; he understood the need for prudent diversification and preserving wealth.
Cash (£4,575): Maintaining liquidity. This is a sophisticated touch. He had "dry powder" ready to deploy when new investment opportunities arose.
Tax Efficiency (Swiss Bank Account): This reveals an advanced level of financial acumen. He understood that taxes are one of the biggest wealth destroyers over time, and he structured his holdings to minimize their impact.
The Lessons We Can Learn (And What to Avoid)
This story is a goldmine of lessons, but it's crucial to separate the universally applicable principles from the extreme, and arguably tragic, behaviors.
The Positive, Actionable Lessons:
Wealth is What You Don't See. It's the unspent money, the reinvested dividends, the quietly compounding assets. You cannot judge someone's net worth by their lifestyle. This should free you from lifestyle inflation and the pressure to "keep up with the Joneses."
Your Most Powerful Investment is Your Education. Degerman proved that you can become a sophisticated investor with a library card and discipline. Commit to lifelong learning about finance and investing. It has the highest return on investment of anything you will ever do.
A Simple, Disciplined System Trumps a High Income. You don't need a six-figure salary. You need a system where you consistently spend less than you earn and automatically invest the difference. Consistency and time are more important than the amount.
Diversify and Think Long-Term. His portfolio wasn't a bet on one stock. It was a balanced, long-term strategy involving growth (stocks), safety (gold), and liquidity (cash). This is a classic, time-tested approach.
The Cautionary Lessons (What Not to Do):
Wealth is a Tool, Not a Trophy. The ultimate lesson from Degerman, Scheiber, and even Buffett is that hoarding money for its own sake is a hollow victory. Buffett and Scheiber used their wealth for massive philanthropy. Degerman's wealth only sparked a family feud. The purpose of building wealth is to secure freedom and options, and to ultimately use it for a purpose you value. Life is to be lived, not just endured for a financial score.
Find a Balance. You do not need to live in misery to achieve financial independence. The goal is to find a balance between enjoying your life today and securing your future tomorrow. Cut unnecessary expenses, but don't cut out all joy. As the article wisely advises, "I don't recommend taking this to extremes."
Your "Internal Scorecard" Matters. This is the core Buffett lesson. Are you building wealth to impress others (external scorecard) or to live by your own values and achieve security and freedom for yourself and your loved ones (internal scorecard)? Degerman's life suggests he may have lost sight of this, becoming a prisoner to his own system.
The Final Summary
Curt Degerman's story is a powerful, double-edged sword. It brilliantly demonstrates that anyone, from any walk of life, can build wealth through extreme discipline, self-education, and a long-term investment strategy. He mastered the mechanics of wealth creation.
However, it also serves as a stark warning that wealth without a purpose is meaningless. The true goal is not just to build a fortune, but to live a rich life—one that includes security, freedom, relationships, and the ability to use your wealth for things that matter to you.
Learn from his incredible financial discipline, but also learn from his life. Build your wealth, but remember to live.
