(MONEY Magazine) – In the depths of the depression, when she was already 38 years old and earning only a little more than $3,000 a year, Anne Scheiber invested a major portion of her life savings in stocks. She entrusted the money to the youngest of her four brothers, Bernard, who was getting started at 22 as a Wall Street broker. He did well picking issues for her as the market drifted upward in 1933 and '34. But his firm did not. It went bust suddenly, and Anne lost all her money.

"She was bitter with my father for the rest of her life," recalls Bernard's son Laurence, 41, a New York financial services salesman. "In fact, she got more bitter the older and richer she got."

Some of her anger at her broker brother seems understandable. After all, she had accumulated the money penny by penny for years by skipping meals, wearing clothes until they frayed and even walking to work in the rain to save bus fare. You might expect her to have turned against the very idea of investing as well. But not Anne; not for a minute. She rededicated herself to her saving and investing regimen with such a vengeance that it consumed her life--while also rewarding her with astonishing wealth. Although she never married, never even had a sweetheart, she did have one love: investing.

In 1944, 10 years after her big loss, she started fresh with a $5,000 account at Merrill Lynch Pierce Fenner & Beane and slowly built the nest egg up to $20 million by the time she died last January, loveless and alone at 101. It's now worth $22 million.

Few investors, including the best-known professionals of our age, have matched her record. Her return works out to 22.1% a year, above the performance of Vanguard's venerable John Neff (13.9%), better than pioneering securities analyst Benjamin Graham (17.4%), and just below Warren Buffett (22.7%) and Fidelity Magellan's Peter Lynch (29.2%). What's more, Anne's basic time-tested investing style can easily be adopted by any small investor. It relies on dedication more than dazzling financial analysis, faith in major companies more than a flair for prescient stock picking, and patience more than the pursuit of immediate profits.

Given Anne's performance, it is not unreasonable to think that 25-year-olds with $5,000 today who follow her example could amass a multimillion-dollar portfolio by age 65. Then they could live the rest of their lives, just as Anne did, with all the money they would ever need, plus the comfort of knowing they could eventually pass on their millions as they saw fit. In Anne's case, since she was estranged from her family, her 1975 will left only $50,000 to one of her nine relatives, a niece who looked in on her from time to time. Virtually her entire $22 million went to New York City's Yeshiva University, though she never visited the school. She specifically earmarked the money to help educate the bright and needy young women among the co-ed school's 6,200 students--women not unlike herself back around World War I.

"Anne was brilliant but weird about money," says her longtime New York City attorney Ben Clark. Relatives add that her fixation ran in the family. "The Scheibers were all like that," says Laurence. No matter how much they had, they feared they would lose it all, perhaps with some justification; it happened to the family twice.

"Back in Poland around the first World War," recalls Laurence's mother Lillian, "the Scheibers had gold buried in the ground. But they traded it for paper money that became worthless." Then in this country, Anne's father suffered substantial real estate losses before dying young and forcing her mother to go to work managing property to support her nine children.

For Anne at least, the money anxiety that darkened her early years was deepened by the family's European values. Whatever money the family did get went to educate the four sons; the five daughters were on their own. Anne persevered, however. She went to work as a bookkeeper at 15 and used her wages to better herself, eventually putting herself through school at night at the predecessor of George Washington University Law School in Washington, D.C. She joined the Internal Revenue Service as an auditor in 1920 and passed the bar exam in 1926 at age 32.

Years later Anne would often dwell on the two lessons she learned during her 23 years at the IRS. First, she concluded that--back then at least--women, especially Jewish women, had little chance of getting ahead. Attorney Clark, who has reviewed her agency records, says she was consistently one of the top auditors. Although she was barely five feet tall and 100 pounds, her favorite ploy was to march in and announce: "Obviously, these books aren't the correct ones. When I come back tomorrow, show me the real books." Then she would walk out. "She was a terror," says Clark. Nonetheless, she was never promoted. When she retired in 1943, she was making just $3,150.

The second lesson she learned poring over other people's tax returns was that the surest way to get rich in America was to invest in stocks. She ultimately concluded that she couldn't do much to change other people's prejudices, but she could do a lot to take care of herself.

Anne began saving money with a fervor that bordered on the maniacal. "She was saving 80% of her salary, at least," says Clark. "For example, she didn't spend $2 on food a week. In those days you could get a hot dog lunch at Nedick's for 15¢, but I know she found an even cheaper place."

"I don't think she was spending more than $2 on food in 1985 either," says her Merrill Lynch broker of 22 years, William Fay. "She'd wear the same black coat and black hat every day winter and summer. Once one of her nieces bought her a new black coat. But Anne found out it cost $150 and refused to wear it."

Anne plowed every dime into the market. Relying on her own methodical research and Merrill's analyst reports, she steadily nibbled at the leading brand-name companies in a few businesses she felt she understood, including drugs, beverages and entertainment. "She rarely bought more than 100 shares at a time," says Fay, "and only once bought more than 200. That's when she purchased 1,000 shares of Schering-Plough in the early '50s for $10,000." Today, her Schering-Plough alone is worth about $3.8 million.

She also almost never sold anything, even stocks that went underwater for years--partly because she hated paying commissions. "She'd say to me: 'Why should I fatten up the brokers? I'm just going to buy and hold,'" Clark recalls. Her buy-and-hold strategy often produced bonanzas. "Some of her stocks, especially in entertainment, got acquired for premiums three or four times, like Capital Cities Broadcasting, which became Cap Cities--Disney," says Fay.

By the early 1980s, as she approached 90, Anne found herself facing ever-steeper income taxes on her $10 million portfolio of about 100 stocks. That annoyed her no end. At Fay's urging, she decided to shift the $40,000 in dividends she collected each month into tax-exempt bonds and notes, some paying more than 8% completely tax-free. "She never sold a stock to go into bonds," says Fay. Still, within a few years, her cash flow climbed from $500,000 a year to around $750,000, while her tax bill remained in check.

Anne bought her last two stocks in 1985, 100 shares each of Apple and MCI. "She didn't trust technology, because she didn't understand it. So she resisted investing in it," says Fay. "Also, by then she didn't want to be bothered remembering the names of new stocks."

"What she'd say over and over again was: 'Don't ever tell anyone in my family how much money I have. I'm going to leave it all to education,'" recalls Fay. "And, of course, she did."

What are the lessons of Anne Scheiber's story? Here are eight investing tips--plus two concluding thoughts.

1. Invest in leading brands. Anne called them franchise names, by which she meant leading companies that created products she admired. For example, she owned Bristol-Myers, Allied Chemical and Coca-Cola. She also followed her instincts on untested companies. "When Pepsi-Cola came along, she tried it," says Fay, "and then bought PepsiCo when it was the new kid on the block."

2. Favor firms with growing earnings. Anne tended to ignore a stock's price-to-earnings ratio. Instead, she focused on the company's ability to increase profits. She reasoned that stocks are overpriced sometimes and underpriced others but it all works out in the end if the company's income rises year after year.

3. Capitalize on your interests. Anne always enjoyed movies. So she turned that pleasure into one of her investing themes by devouring Variety in search of the best entertainment companies. She scored big with Columbia, Paramount and Loews, as well as Capital Cities Broadcasting.

4. Invest in small bites. In addition to adding diversity to her portfolio, that rule automatically caused her to pick up extra shares when prices were low and avoid going overboard when prices were high.

5. Reinvest your dividends. It's the same principle as playing with the house's money in gambling, with this advantage--it's a sure moneymaker in long-term investing

6. Never sell. Or at least, never sell a stock you believe in. "For a long time in the rotten bear market of the '70s, many of her drug stocks were down, some by as much as 50%" says Fay. "But she hung on because she believed in them. She didn't panic in the crash of '87 either. She thought the general market had gotten overpriced, plus she was convinced her stocks would come back."

7. Keep informed. Anne went to all of her companies' New York City shareholder meetings. Rain, sleet or shine, she would walk over from her rent-stabilized, $450-a-month studio apartment in her trademark black coat and hat, buttonhole the CEO and demand answers, just as she did when she was an auditor. Then she would compare her notes with what the Merrill analysts were saying. Fay adds, however, that she also attended the meetings for the freebies. "Even when she had millions, she'd show up with a bag," confirms a relative. "If there was food served, she'd fill the bag and live on it for days."

8. Save with tax-exempt bonds. They provided more safety than stocks and cut her tax bill. When she died, she had 60% in stocks, 30% in bonds and 10% in cash.

In addition to those investing ideas, Anne's life also illustrates two other lessons worth considering, especially if you hope to end up with more than enough money as she did:

9. Give something back. Her $22 million gift to Yeshiva, plus an extra $100,000 she gave to an Israeli educational group, will help countless young women realize their full potential for years to come. Yeshiva's president Norman Lamm says: "Anne Scheiber lived to be 101 years old, but here at Yeshiva University her vision and legacy will live forever." One of her relatives who wasn't left a cent, New York City bank officer Dolly Acheson, adds that the Yeshiva gift gave her a "feeling of redemption." As she puts it: "At least in the end all that money went to a very good cause."

10. And finally, enjoy your money. As intelligent as Anne Scheiber was, she failed miserably on this one. She died without one real friend; she didn't get even one phone call during her last five years of life. Says her former broker Fay: "At some level, a recluse like her must get some psychic reward to keep going on that way. But to you and me, her life was terrible. A big day for her was walking down to the Merrill Lynch vault near Wall Street to visit her stock certificates. She did that a lot."