It was very difficult to erase mistakes made by early electric typewriters, which caused problems for Graham. In order to make extra money, she used her talent painting holiday windows at the bank. She realized, as she said, "with lettering, an artist never corrects by erasing, but always paints over the error. So I decided to use what artists use. I put some tempera water-base paint in a bottle and took my watercolor brush to the office. I used that to correct my mistakes."
Graham secretly used her white correction paint for five years, making some improvements with help from her son's high school chemistry teacher. Some bosses admonished her against using it, but coworkers frequently sought her paint out. She eventually began marketing her typewriter correction fluid as "Mistake Out" in 1956. The name was later changed to Liquid Paper, when she began her own company.
Bette Nesmith died in 1980, at the age of 56. Her only son, Michael, inherited half of his mother's $50+ million estate. The remainder financed the Council on Ideas, a think tank devoted to exploring world problems.