Anne Schieber was broke and disillusioned at the age of 51.
She had worked for the IRS for 23 years and was considered one of the agency's top auditors.
She never got promoted and never earned more than $3,150 a year.
With half her life already behind her, her retirement prospects looked bleak. Schieber had learned about a secret from years of studying the tax returns of America's richest residents.
Over the next 50 years, she earned a 449,000% return, making Schieber one of the most successful investors of all time.
Schieber saw firsthand how the stock market can create wealth during her 23 years at the IRS.
She went on to experience it firsthand.
Schieber turned it into over $22 million, a return that beats the average annual gain of Warren Buffett's Berkshire Hathaway, starting at age 51 with just $5,000.
This feat places her among the greats of investing lore. Schieber's story is amazing for another reason, beyond the rate of return.
At age 41, Schieber had lost her life savings in the stock market. The loss caused a permanent rift in her family and lasting bitterness toward her brother, who had presided over the debacle.
Schieber took away two lessons from the experience.
One, she would never leave her portfolio to outside management. She started building a portfolio on her own in 1951, with her $5,000 in savings.
And two, she would never bet the farm again on a single opportunity, as she had on her brother's firm before disaster struck.
By 31 Years, Warren Buffett was his Greatest Investment - Beating Warren Buffett to His Greatest Investment
Schieber invested in a number of companies from entertainment to technology over the years.
Schieber bought Apple stock 31 years before Buffett first acquired his shares in 2016.
She bought Coca-Cola Co. shares years before Buffett's famous 1988 investment.
The two investments are considered the shrewdest investments that Buffett has made in his career. Coca-Cola stock has returned over 2,000% since Buffett bought it 33 years ago. In February 2020, Buffett said Apple is probably the best business I know in the world. An unassuming woman who stood at just 5 feet tall managed to beat him by years to both of those companies.
You may think Schieber got lucky by securing gold on a few investments like Apple and Coca-Cola out of hundreds of different stocks she bought over the decades.
That is exactly the point. By targeting hundreds of different companies over time, Schieber was able to maximize her chances of backing a company that would return 10,000% or more over the years.
Diversification is usually thought of as a defensive strategy. A single 10,000% winner can outweigh any losers in their portfolios, because they use it as an offensive weapon that allows them to swing for the fences.
Today, anyone looking to emulate Schieber's strategy have one tool that was never available to her.
StartEngine is an equity crowdfunding giant that lets ordinary investors claim stakes in some of the most potentially explosive, if risky, disruptors in the world. It recently inked a deal with Indiegogo, which brings its network of 800,000 investors to StartEngine's equity crowdfunding platform.
The platform allows investors to claim small stakes in startups that have potentially enormous upsides. There is a chance that increased risk is part of the strategy. It's true that investors can use the platform to manage risk through diversification, as was the case with Schieber.