“Rule Breaker Investing” August Mailbag: Talking Investing With David Gardner

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This video was recorded on August 31, 2022.

David Gardner: August is over. Hope you had fun. Me, I got to Scotland and Oxford, England, and then the Carolina Coast. So, a little international travel and some beach time. That’s what I want out of my summers. And yes, some podcasts despite being away at different points throughout the month. My producers, Rick and Heather, and I got authors in August, recorded and out, and what a month it was. The market, on the other hand, well, after rising nicely in early August seems to have mostly given it all back. Now I’m looking forward to September and I hope you are too, but first, before August disappears, it’s your Mailbag only on this week’s Rule Breaker Investing.

Welcome back to Rule Breaker Investing. A delight to have you with me. This is a month that had five Wednesdays. That means it’s always a lot of extra work for us, which we don’t like when we’re trying to get to the beach, but we made it all work this month and I’m just delighted to share three wonderful authors with you. These authors in August for 2022. We started the month, I just decided to do books, books, books episode. Sharing out with you some of my favorite lesser-known titles in a Motley array it was for that first week of August, books, books, books. But then after that, Jesse Schell, the author of the book The Art of Game Design, followed by Les McKeown, author of the book Do Lead, and then Candice Millard last week, author of the book River of the Gods. I’d like to start most of our Mailbags with hot takes from Twitter, and that’s how we’re going to start it right here. First, one I want to share is from @jason_trice, a wonderful fellow Fool, Jason, thank you for all the wonderful tweeting you do on behalf of this podcast and Rule Breakers everywhere. You simply said, awesome episode speaking of the Art of Game Design in Jesse Schell’s appearance the second week of the month.

You quoted your favorite line, saying, I loved this line. “People can steal your moves, but they can never steal your inspiration.” Yeah, that was a great story Jesse told. I’m just going to reshare that in case anybody missed it. Jesse, as a boy, was a juggler and he attended his first-ever juggling festival at the age of 14. He came across a man who is doing amazing juggling moves and here’s the way he tells it in The Art of Game Design. This older, amazing juggler says, “Jesse, you want to know my secret?” Jesse says back, “Sure.” The guy says, “The secret is don’t look to other jugglers for inspiration, look everywhere else.” Jesse writes he proceeded to do a beautiful looping pattern where his arms kind of spiraled and he turned occasional pirouettes. I learned that one watching a ballet in New York and this one, he did a move that involve the balls popping up and down as hands flutter delicately back and forth.

I learned that, said the juggler, from a flock of geese I saw takeoff from a lake up in Maine. And this, he did a weird mechanical-looking movement where the ball almost appear to move it right angles. I learned that from a paper punch machine on Long Island. He laughed a little, writes Jesse. Stopped juggling for a minute. People try to copy these moves, but they can’t. They always try. Yeah, look at that fellow over there and he pointed to a juggler with a long ponytail across the gym, who was doing the ballet move, but it just looked dumb. Something was missing, but I couldn’t say what. You see these guys can copy my moves, but they can’t copy my inspiration. You juggled a pattern, they made me think of a spiraling double helix and just then the PA announced the beginner’s workshop and I thank him and ran off. I didn’t see him again but I never forgot him. I wish I knew his name because his advice changed my approach to creativity forever.” Again that’s a short excerpt from Jesse’s wonderful book, The Art of Game Design. A book extensively about game design but as you just heard, full of stories and great thoughts and helping us with creativity. Jason tries, I agree, I love that line and that concept too.

Then, of course, the week after Les McKeown joining us and helping you rethink in some cases, maybe redefine leadership, and just to quote Les again, “Leadership is helping any group of two or more people toward their common goal.” In the book, he actually said achieve their common goals, but in the interview, he made it a little bit more modest than that. Just take a step toward a common goal. It’s a very prosaic, a very seemingly pedestrian, but really democratizing enabling view of leadership and so many more good thoughts for you again, for those who may not have gotten to enjoy Les on the second author interview this month. Then, of course, Candice Millard at the Whittington DPT, thank you for this note. Brian, couldn’t give a higher recommendation of @DavidGFool Podcast interview with Candice Millard. I already enjoyed her writing, Brian wrote, and now after listening to her, I am a bigger fan. Can’t wait to read River of the Gods, and he thanks @JimminyJilickrz for the recommendation.

A reminder that many are getting pointed to this podcast, not necessarily directly, but by another Fool who might say, “Hey, you should listen in and I sure did enjoy checking back with Candice. As we talked about, she comes out with a new book every five or six years. I’m already circling 2028 for our next conversation but it was a wonderful discussion with one of my favorite authors.” A quick thought before we move to Mailbag Item number 1, all three of those authors are active on Twitter. If you are a fan of Twitter, a user of Twitter, you should know that you can get directly into touch with Jesse Schell @jesseschell. He spells his name S-C-H-E-L-L, @lesmckeown, Les spells his last name M-C-K-E-O-W-N, and then @candice_millard, all three of those authors accessible to you. So if you’re a fan, they’d probably love to hear from you. That’s one of the things I love about Twitter. Probably that I love most about Twitter’s following people who I admire and maybe having an opportunity to drop them a note or have an exchange.

Again, thank you to Jesse Schell, Les McKeown, Candice Millard, and you fellow Fools everywhere. Rule Breaker Mailbag Item Number 1, this one from Deborah Knowles. Thank you for writing in Deborah. I’m a Rule Breakers subscriber and I’ve listened to this podcast from the beginning, and I go back to revisit past episodes. Deborah writes, I’m looking for the scorecard and she puts that in quotes. I would like to assess my potential stock purchases following Fool guidelines. Is there such a tool or is it a term to refer to the concept of assessing? If there is a thing, please send me a link or episode dates signed Deborah Knowles. Well, Deborah, first of all, thank you very much for being a member of Motley Fool Rule Breakers, of course, one of my favorite services at The Motley Fool and Tim Beyers who now heads-up Rule Breakers joined us last month. I hope you got a chance to hear him discussing some of the features, some of the changes in Rule Breakers, but also some of the things that persist. One of the things he discussed is the Rule Breaker rankings.

As you know, we have dozens of stocks on active recommendation at Rule Breakers and so the team recently decided it would be helpful for members if we ranked those stocks. One way of answering your question is that as a Rule Breakers member, you can now sign in and see our August 2022 rankings. That’s certainly one way in your own words of assessing your potential stock purchases following Fool guidelines. In some ways, I think I’ve answered the question you were asking. I also want to say though, that you might be talking just about keeping scorecards in general, that’s one of my big themes as an investor and certainly on Rule Breaker Investing is taking the time to track how we’re doing. So you know if you’re winning or losing. One of the reasons I love sports and games is most of them have scores or points, and the important thing that points do is they tell us how we’re doing. I think we need that as well as investors. For me, I’ve always used the S&P 500, which is really the gold standard that most mutual funds and so much of the investment world uses as it’s bogey.

As an investor, I’ve always tried to beat the S&P 500, maybe not in any given quarter or even year, but over meaningful periods of time on this podcast, of course, my 30 different five stock samplers always pick the S&P 500 usually over three-year periods and we try to beat the S&P 500. Keep in mind so much of academia thinks it’s not possible consistently or meaningfully to beat the S&P 500. That is a major bone that I’ve had to pick my entire life with those who believed that. I think it is indeed possible and if you follow Fool guidelines, I think it’s likely that you will beat the market over the only term that counts, which is the long term. In looking for a scorecard, another way of answering your question is just encouraging you to whether it’s an Excel spreadsheet or there are different tools out there, you might find some on our site to use to track your own performance. You can even keep it as simple as if you have a single brokerage account just seeing where it was at the start of this year, where it is now, and just seeing the percentage CHANGE up or down.

In my case, it would be down over that time and then just compare that to the S&P 500. That’s another way of doing a scorecard. The last thing I want to say is we had a wonderful opportunity to meet directly with members this week at The Motley Fool. Many of you will know we had #FoolFest2022. I was there in attendance. Had a great time shaking hands with a lot of our members. It was our first face-to-face event in about three years, so very meaningful for me for all of our staff and for the hundreds who attended, and actually the thousands who also watched online because it was our first ever hybrid event. We had a few 100 people face-to-face with us. We had tens of thousands tuning in from home wherever home is. It was just a wonderful chance to come back together. In some of my brief remarks at the event, I said something I want to say to all of my listeners now because I hope this makes you feel better, dear listener wherever you are. I basically said point-blank in front of everybody, “Whoever is down right now, and however much you’re down over the last year, just know that I am down more.” I really in most cases probably am.

Why is that? Well, it’s because I remain fully invested in have pretty much my whole life and because I have my positions in many of the biggest growers and some of the most volatile companies, when the market sells off, especially the type of sell-off we’ve seen over the last year, my stocks get hit hardest and I just keep holding them. If you want to compare yourself to me, you’re welcome to know that since my November highs in my portfolio, I’m down 39 percent. Still, I do want to brag, I guess briefly that over the last two months since the lows of June, even with some of the late August sell-off, I’m up 32 percent in just the last two months, which feels amazing. I’ll take that in any two-month period, but to still be down 39 percent from where I was in November. How do I know this? Well I keep scorecards? Deborah, you’ll appreciate that. But I do want to reiterate my line this week. Whoever’s down, however much you’re down, just know that I am down more. Before we move on to Rule Breaker Mailbag, item number 2, there’s a great Swedish proverb. Some of you no doubt have heard this before.

It could be worded in various ways, but the most elegant phrasing in English that I have for you here describes my own feelings around Motley Fool community, the beauty of FoolFest, etc., in where we are right now. Here is that Swedish proverb. Shared joy is a joy doubled, shared sorrow is sorrow halved. There certainly is a lot of sorrow in 2022 to be shared among so many different Rule Breaker investors worldwide. But there’s something great about being able to say that to each other through this podcast or this week in Washington DC at FoolFest ’22. Rule Breaker Mailbag, item number 2, this one from Joshua Johnson. Josh writes, David on the most recent Rule Breaker Investing Mailbag, you mentioned how we need to do a better job of letting our loved ones know about our passwords, etc. Well, I thought I would tell you about the solution I use. I’m a big fan of the LastPass password manager and Josh writes, “part of LastPass is a feature called emergency access.

You can set up a loved one with access to all of your passwords. If they request this access, you’re sent an email asking if this is OK at a predetermined time that you’ve said. If you don’t respond, they are given access to your password vault. I hope this solution works for you,” Josh writes. Thanks for all you do Joshua Johnson. Well thank you for that Josh and I have to admit I’m not a direct user of LastPass password management. One of the many things I love about our company is we have people who knows something just about everything. We have a lot of great techies at The Motley Fool. One of my favorites is Tyler Reber. Now, I really most interact with Tyler around the topics of the weather and birds. Because while I’m definitely nothing more than an amateur ornithologist, Tyler, you are an incredibly talented, just a remarkably talented bird photographer. I don’t want to get sidetracked because we’re really going to talk about LastPass here. But before we start, how long have you been at the Fool, Tyler?

Tyler Reber: It’ll be eight years in March. I believe that.

David Gardner: That’s amazing. One of my favourite Slack channels, this might sound crazy, but we’re crazy at the Fool. One of my favourite Slack channels at our company is the weather. Tyler, you are basically our meteorologist at The Motley Fool.

Tyler Reber: Pretend meteorologists as I like to say, just so that nobody thinks that I am actually a real scientific meteorologist. But yes, I love the weather, I guess it’s something I’ve been fascinated with.

David Gardner: But I am one of 170 fellow Fools who follow this channel and almost not a day goes by when Tyler doesn’t let us know, especially in the Washington DC area, especially in summer it seems whether there are storms coming or maybe snow in the winter. I just followed this for years. Tyler, you’re so dedicated there and somehow you also have a job as a techie at The Motley Fool. What’s your focus?

Tyler Reber: My focus is mostly on just keeping our sites up and running and doing all of the back-end infrastructure type work that we do to keep our sites online and to make sure our users have a good experience accessing those sites and using them.

David Gardner: Thank you very much. When I reached out because I don’t have direct familiarity with LastPass, I thought can we get somebody who actually knows what he’s talking about on this podcast and speak to this briefly? I did check in with the site. It looks like a pretty consumer-friendly. It’s got a freemium model, so we could sign up for 30 days, but we’re going to be paying three or four dollars a month just to store all of our passwords, maybe in our browser or on our phone. It’s not the only site or tool of its kind like this, Tyler, but I see that LastPass it’s like you come up with one strong password and it’s the last password you’ll ever need to remember. It’s one of those kinds of tools. Have I accurately described LastPass?

Tyler Reber: Yeah. I think that’s a great description of it.

David Gardner: What is your opinion?

Tyler Reber: I am a big proponent of password managers. I think that they greatly enhance an end-users security posture. Because they solve an underlying problem that a lot of people deal with, which is that folks reuse passwords. I think as we see more and more and more of these days, password reuse is becoming a bigger and bigger problem, primarily because there have been so many data breaches in the last decade, those weak passwords and maybe not even necessarily weak passwords, but passwords that have been reused by folks across many different sites end up being compromised in a breach somewhere, and they leak out on the Internet. Those bad actors release those password list.

David Gardner: It seems there’s so many of these stories that they almost don’t make the headlines anymore.

Tyler Reber: It’s the unfortunate truth, it really is. But yeah, this solves that problem because like you say, you have one strong password that you’ve made sure no one ever has access to and you never use anywhere else. That is the only place you would use that password, it’d be LastPass or whatever password manager you’re using. But then, once you’re under that, and ideally you also have to factor off behind that so that the second layer then you have access to all your passwords and you can then easily set a unique password for every single site or every single application that you’re using because you don’t have to remember it anymore. You remember that one very strong password and then you get access to all the other things.

David Gardner: I have to admit. I’m the knit weird who’s still trying to document and memorize dozens and dozens of passwords across many different sites. This technology has been around for quite a while, Tyler, but I feel inspired to finally make a change myself. Now, at the Fool, at an enterprise level we use Okta. Okta has been sometimes wonderful stock pick and sometimes volatility difficult rule-breaker like stock I see five years ago this week it was at 30. It hit just about 300 in early 2021. A true near 10-bagger hero stock for Motley Fool Stock Advisor, but it’s gotten back down to 90 now, so it’s lost two-thirds of its value, but it is still a triple from five years ago. We use Okta at The Fool and I’m sure some of our listeners are familiar with that. Tyler, what do you use personally? Do you use LastPass or something like it?

Tyler Reber: I use a couple of different tools. I use different ones both for enterprise stuff and for personal stuff. I do use LastPass. Then I’ve also played around with a couple of others. I can’t remember which ones. I think 1Password is out there and then Bitwarden is another option. There’s a number of options out there. LastPass. In fact, the writer that sent this email and talks about the family features with LastPass, and that was one of the real big reasons why I’ve used LastPass and stuck with it, is for that exact reason because it gives you that emergency access feature if that something that you’re looking for and I think for family use, that’s a great feature to have.

David Gardner: That’s great. Yes, our correspondent, Josh Johnson, regular listeners will know that he’s hailing back to or let’s talk about Death Over Dinner April Podcasts and how many Americans tend to avoid the subject altogether, but you leave people in a bind if you haven’t written a will or taking some of the other steps these days and with the digital lives that so many of us find ourselves leading. I’m definitely persuaded that having a good solution, which I have to admit, I don’t have a present myself with passwords is going to be very helpful for people. I think Tyler, you and I are coming down the side of whether it’s LastPass or OnePass or anything else. I’ll just point to myself right now, I need to get off my romp here and get a better password [laughs] going in my daily life. Do you agree?

Tyler Reber: I absolutely agree. I think it would be supremely helpful for you and for everybody that’s listening because it’ll help solve that problem of password reuse and that’s a major problem.

David Gardner: So on our feed for @RBIPodcast on Twitter this week, I’m going to have my teammates and producer Rick, put up a few of your photos of birds Tyler, because they are truly stunning. You’re just dropping them into another slack channel. But you’re clearly a guy who wakes up very early, you’re a birder, and you probably keep track of lifers. I’m not sure you probably. I have people in my family who do this, who have like [laughs] a digital treasury of all the birds they’ve ever seen but you’re taking photographs which are really stunning. Just to bring joy to our fellow Fools, especially people who love birds, we’re going to have some of Tyler’s best work coming up this week.

Tyler Reber: Awesome. I appreciate that. Thank you.

David Gardner: Tyler before I let you go, we’re all photographers now that we have iPhones, I guess, and we’re out in nature. What’s one wildlife photography takeaway that we can all learn from and be a little bit better next time?

Tyler Reber: Sure. My biggest piece of advice for anybody doing nature or wildlife type photography that I always tell people is to try to get at the same level as your subject, as best as you’re able. Because especially with wildlife, if you can see it at eye level at the same level that its eyes are at, it just adds a real depth and intimacy when you get at that level and take photos at that same eye level with your subjects. That’s my one big piece of advice I think.

David Gardner: That is a great piece of advice. It does occur to me that some of your photos which would be sharing via Twitter this week are right eye on the right at lake level, right at water level with a large beautiful water bird. I have to admit, if I ever even him in that position, I’m probably standing up and pointing down [laughs] I get it. Tyler Reber, thank you very much.

Tyler Reber: Of course, thanks for having me.

David Gardner: Rule Breaker Mailbag Item Number 3. This one comes from Mark Meyer. Thank you for this note, Mark. Hello, David. I’m a Motley Fool member and regular Rule Breaker Investing Listener. In a previous episode about The Motley Fool Foundation, I was intrigued and happy to hear of your partnership with Ashoka. I became acquainted with Ashoka through my wife, who is an Ashoka fellow and social entrepreneur. By means of an introduction, her organization Alia Innovations, was recently featured in Forbes, an article entitled keeping children safely with, not from, their families, foster care transformed. Sounds very interesting. Mark goes on. It seems to me there are many potential points of intersection that may interest your Podcast listeners or The Motley Fool Foundation, for example, social entrepreneurship and change, challenging conventional wisdom, social return on investment, supporting under served groups. With kind regards Mark Meyer, who is a Rule Breakers Stock Advisor and Real Estate Winners member. Well, thank you very much for that note, Mark, and congratulations on your wife’s work and her organization Alia Innovations.

The website for anybody who’d like to check it out is A-L-I-A, aliainnovations.org. It does give me an opportunity to speak briefly about Ashoka. So raise your hand, dear listeners although if you’re driving, keep your hands on the wheel, if you know Ashoka. I do see some hands up and not all hands are up. Let me make it clear that Ashoka is, at least in the United States of America, I think the leading network for social entrepreneurs. Ashoka operates like a venture capitalists but instead of funding entrepreneurs for profit with an idea and a dream, Ashoka focuses on not-for-profit social entrepreneurs. It’s a longtime Motley Fool partner. Even back as far as 20 years ago, we had identified Ashoka as a wonderful organization that we wanted to do more business with and indeed over the years we have. As we thought about launching The Motley Fool Foundation, which launched on April 1st of this year, Ashoka was a natural partner for us.

For those who are familiar and those who listened to our Motley Fool Foundation podcast earlier this year, you’ll know that one of the things we’re doing at The Fool Foundation. In the same way that I picked stocks that are Rule Breakers for years and years by looking for disruptors who had a better way of doing something or a new fresh approach to one of the world’s older problems. For profit, we recommended those stocks, we bought those stocks together as fellow Rule Breakers. Well, that’s exactly what we’re now doing with the Foundation. We’re looking through a bunch of Ashoka’s investors, entrepreneurs, they call them fellows and we’re identifying ones that particularly fit with our aims at The Motley Fool, which is financial freedom for all. Particularly, we’ve identified the financial freedom, at least coming from The Motley Fool isn’t just going to be, let’s say, teaching kids the stock market which we do wish every kid knew about the stock market.

But we started to realize as we started the Fool Foundation that it’s a bigger vision than that. If you want to really think about in our lifetimes, which will never happen but it’s still, we’re striving for financial freedom for all. It’s not enough to just think well, we teach the kids the next-generation, the stock market, it will all work. We really identified five drivers that drive financial freedom. Just very briefly, to recapitulate, they are your health. It’s hard to be financially free if you don’t have your health, a roof over your head, housing, hard to be financially free if you don’t have your health and home. Job Number 3 is critical, of course, for those who are able to work of working age. Then the last two factors that create financial freedom are education, and then I guess the most obvious one of all, money. Money itself, capital. At the Fool Foundation, we don’t think it’s enough to just pick any one of those. In our experience, each of those is such a deep place where so many hard-working people with visions are working, just take housing, for example, I think about Habitat for Humanity, which is one of the great housing charities in the United States of America today.

Yet, when we’ve talked with habitat, though sometimes lead on that as they give the next home that they’ve built as a community to the lucky recipient who now has a home. Often they’ll get asked questions like, “Well, how do I actually invest my money now that I have a home?” What we’ve realized that the Fool Foundation is that being a connector and a convener, taking a holistic approach and realizing that it’s going to be important not just to have housing, but also that job and also capital and education and health. We need to string those two together and create a holistic response. So what we’re doing in conclusion, Mark and all my fellow Fools is we’re identifying people who are Rule Breakers across each of those five drivers of financial freedom. Then we’re encouraging you as our members and fans to join us at foolfoundation.org and get invested in these remarkable people with us. To close, we’ve identified three financial freedom fellows thus far.

They are quickly Jose Quinonez of Mission Asset Fund. He does remarkable work, especially in Hispanic communities, Texas and out West, helping especially immigrants get a credit score, which is such an important building block to financial freedom that many Americans take for granted, but not a lot of other Americans. So Jose and his vision, wonderful. Tim Lampkin, Number 2. Tim is helping people of color, especially in the Mississippi Delta, start businesses. I saw a great clip about a month. I think it was NBC news earlier this year. We’re proud to be allied with Ashoka and Tim. He, of course, is focusing on that work-piece. Finally, our most recently announced fellow, Kim Driggins at the Washington Housing Conservancy, Washington as in Washington DC. She’s developed a model which works the math adds up to create affordable housing in one of our nation’s most important cities. Each of these people is focused on one of those five drivers. Mark, I can’t speak to Alia Innovations and the overlap there, but it’s my pleasure to highlight the work of your family and certainly of Ashoka as we all work together to make the world better in our case, to work toward financial freedom for all.

That brings us to Rule Breaker Mailbag Item Number 4 from one of my favorite long-term correspondence. I won’t go back over why Adam Nelson is one of my favorites, but Winky winky Adam, thank you for your help with the Market Cap Game Show. Hi David. During and after the pandemic, Adam Writes, I did a lot of self-reflection prompted by your interview with Shirzad Chamine, I began to learn as much as I could about myself. I identified my positive intelligence “Saboteur”. Adam calls out avoider, victim pleaser. He goes on, I figured out my Enneagram, that’s a different system and he’s number nine for those who know and follow Enneagrams. I took strengths finder tests, which I also have taken. He said I have many, that’s good news. You’re supposed to have many strengths [laughs] I’m glad. Glad the strengths finder test identified that for you, Adam and I read about Gretchen Rubin’s Four Tendencies. I don’t know that but Adam says he’s an obliger.

To say the least, I now know a lot more about myself than I did just two years ago. I’m still relatively young at age 35. One of my challenges now is that I don’t feel that I’m living up to my full potential, due in Part 2 my environment Adam says primarily at work and how it aligns with my personality. I fear that I’ll wake up 10 years from now and I won’t see meaningful improvement. You could say that the stock chart of my life is in a consolidation pattern and I’m looking for a strong breakout above this resistance so that I can get to new highs. It feels eminent, Adam writes, but I don’t see a clear catalyst either. I’m hoping you can share some relatable stories from your own life when you’ve experienced a meaningful jump in the trajectory of your life. At this point, he concludes, I feel like Lloyd, from Dumb and Dumber, I never did see Dumb and Dumber, I know many of you have. I feel like Adam writes Lloyd from Dumb and Dumber when he says to Harry near the end, “Don’t worry, we’ll catch our brake too. We’ve just got to keep our eyes open.” Thanks in advance for any wisdom you can impart, Adam Nelson.

Well, Adam, I want to right away go back and underline one of the sentences of that lovely note and congratulations on self-discovery. Knowing ourselves, know thyself it said, scrolled on the Greek Oracle at Delphi. This is a lifelong goal. It’s never going to end. The more we learn sometimes the more layers we realize we can now peel back. We’re very complex creatures. One of my favorite lines, the greater the island of knowledge, the longer the coastline of mystery. The greater the island of knowledge about yourself, sometimes the longer the coastline of mystery. But your line, and I’m going to quote you again, “I fear that I’ll wake up 10 years from now and I won’t see meaningful improvement.” To me, the best hope that you have against that fear is your self-awareness that you would even say that or write that is such a good sign for your future. Well, it puts me in mind of two unblocking moments for me in life, and thanks for opening up the opportunity to tell these brief stories. I don’t know if either of these is going to be helpful.

Neither might be helpful for you, Adam, but maybe some of them will be helpful for at least some of my listeners this week. Perhaps you can see something of yourself at whatever age in me as a younger man. The first thing that I think of when I think about in the words of Lloyd catching my own break, just keeping my eyes open, it was the first job that I ever got and here’s the way I got my first job. I graduated University of North Carolina, Chapel Hill, and I didn’t seek a job immediately. Which is a neat trick if you can pull it. The reason I was able to pull it was, first of all, my dad had invested for me and his family, each of his kids from birth. When we turned 18, dad gave us the money that he had invested for us, which was it gave us a measure of financial independence. It certainly didn’t give us financial independence, though dad had done great, but it did mean we didn’t need to rush out and get jobs. A very privileged position. But I had a second trick going for me. I’d gotten a full scholarship all the way through college. I had some savings built up. I didn’t need to go out and get a job. What I did do though is I got married two years after college.

There I was and you can imagine the jokes that were made at our rehearsal dinner about how David doesn’t have a job, but somehow Margaret still said yes. There I was at the age of 24, still not really with a job. I had written a lot, I’d submitted a lot of pieces as a freelance writer and gotten rejected regularly. I’d watch many of my talented classmates from school go on and get their first job or first promotion or first-degree. At the age of 24 and then 25, I admittedly started feeling really stuck and who I’m I? What I’m I actually going to do with my life? I got my first job in this way. My wife saw a classified ad in the Washington Post, our local newspaper, for a financial newsletter position and she pointed out to me that it was about five blocks from our house. It was the financial newsletter of Louis Rukeyser, who is famous then as the PBS host of Wall Street Week, which was the longest running show on public television at that time and this year, by the way, is the year of 1992. I’ve finally, at the age of 26, applied for my first job. What did you do back in those days? Well, it might even still be true today. You write a cover letter, then you send in your resume.

Now, back in the day, of course, this was done through the US mail paper with envelopes. I don’t really remember what I said in my cover letter, but I do remember counting the days waiting to hear back from the publishing company behind Louis Rukeyser’s newsletter. I waited for one day and then eight days, and then 28 days and a full month had gone by and no one had mailed me back. There were no phone calls. I’d heard nothing. But one thing still remain true. The offices were about five blocks from where I lived. I thought on day 31 or so, why wouldn’t I just walk down there and knock on the door, which is what I did. I knocked on the front door of the office building and a woman came to greet me. It was a smaller office. She said, hi, who are you? I said “Hi, my name is David Gardner. I applied for the role of researcher and writer for Louis Rukeyser’s Wall Street, the financial newsletter. I sent it in about a month ago and I haven’t heard anything back since. I thought I’d just knock on your door and come see what’s happened.” She said, “Oh, OK, well, I’m the editor. So David Gardner, well, listen, why don’t you walk back here?” We walked back through a quarter to a desk.

She said, “David Gardner. Well, there are two stacks of paper on this desk, David Gardner. One of them, and it was a shorter stack of paper, maybe about six inches high, these are the resumes and applications of all of the people whose qualifications qualified them to apply for this job. Then this stack of paper which was about twice as high, these are the job applications of all of the people who did not qualify based on their career to apply for this job. David, I regret to tell you that you’re in this stack. The latter one, the tall one.” I began backpedaling a little bit saying something like, “Well, I realize you did expect 2-5 years of journalistic experience, and I admittedly don’t have that. I haven’t had a job before. But I majored in English at school and I love the markets and I probably went on for about 15-30 seconds more.” She said, “Well, you know, since David, you took the time to come down to the offices today, I’m going to give you a test. The test that I gave all of these people.” She pointed back to that smaller stack of paper. The test was to take a pamphlet about convertible bonds.

I think it was from Dean Witter at the time, the brokerage firm. I had 45-minutes to make convertible bonds palatable, and understandable to a general reading audience. Well, I remember two things about that test. The first is that it finished and I hadn’t actually finished the essay that I was writing. But the second thing that I’ll always remember about that test is that a day or two later I got a phone call at home saying I was hired. Adam, that is the story of how I got my first job and just a few reflections about that. Maybe three quick points, the first is I was asking why. Why haven’t they responded to my job application? I think I had two pressures of sense, maybe a little bit too much that I was owed a response back in the day. I thought it was only common courtesy as I applied naively for my first job that employers would let me know whether I was hired or not. In asking why, the answer was, go over there and knock on the door and figure out why. There’s something to be said here about showing up in life. The second quick reflection is that rules were broken.

I think very few of the candidates probably took the time to drive down or walk over to those offices and knock on the door and say, how’s my job application going? But it’s also worth pointing out that I wasn’t the only one with some agency breaking the rules. After all, the editor herself basically said, “You don’t qualify. But you know what? I’ll give you the test anyway that I’m giving the qualifying people.” Sometimes when you ask why and you end up showing up, rules are broken. Then the final reflection about this is, good stuff might just happen when you ask why. Show up and rules are broken. That’s the story of how I got my first job, but that’s not the end of this mailbag item because I need to immediately tell the second story that I hope is in some way instructive or inspirational. The second story is entitled, how I quit my first job. Within about three months of writing and researching for the Louis Rukeyser Wall Street newsletter, I started to feel really down. The work was repetitive and uninteresting in a lot of ways it was a plum first job. I had an opportunity to think what is the subject I want to write about this month. Then I had the back page of the newsletter to write it up, to explore it. Each month, I would pick something that seemed useful to me, seemed helpful.

For example, back in those days, Quicken, financial software was a new thing. I thought, wow, this is great. We can track our expenses now. We can use these new computers that we have on our desks, PCs, personal computers, and we can track our finances. Or another one was discount brokers, a brand new thing. Wow, rather than have the old school broker that you have to call and that person probably overcharges you to execute a trade, there’re now, discount brokers like Charles Schwab that are cheaper and that you can actually do the trades over the phone or maybe even your own computer. That seemed interesting to me as well, and I would write up my one-pager, turned it in. It was a monthly newsletter and at the end of that month, back would come my draft altered. The first half of the resulting page would be a synopsis or summary of what I was advocating. With any fun, color or humor stripped out and gone, just a rather gray distillation of what I had been writing and the second half of the article each month would be all of the reasons that you would not want to do whatever I thought was an interesting fun thing to do, like quicken or discount brokerages.

All the reasons that might not work for you. This happened in month 1, month 2, and month 3, and somewhere around month 4, I was like, I need to have a talk with my boss because this isn’t any fun. I guess again, like in my first story, I asked why. I showed up and asked why and it was explained to me. It’s really quite logical now that I think about it, that this was Louis Rukeyser’s Wall Street newsletter. Lewis wrote the first several pages each month. The rest of the articles were written by staff like me and it was explained to me that our tone and our effort needed to contrast with Rukeyser’s flare, color, and fun. Our part needed to contrast with the voice of wit, humor and money intelligence. Once I heard that I started thinking, you know what? I don’t think I’m going to stay [laughs] in this job much longer. I met with my editor’s boss, the person running the company, and he said understandably, ”Yes, this is the way this job is going to continue.” I said, well, in that case, I’d like to give my two weeks. He said, ”How about two months because it’s going to take a little while to replace you?” I think I maybe stayed on a third month, I was happy to do so, thus ended the story of my first job.

Just a few quick reflections about that. The first is again asking why are things the way they are and then show up. My second reflection is, that I think rules were broken once again. I basically did something that you really shouldn’t do, which is, I don’t think you should walk away from your first job before you’ve even finished your first year in it, especially when you’re now in your mid 20s and you’re looking increasingly unemployable by any organization. I was breaking the rules by doing what I did. Then the third and final reflection here is just like the first story, if you ask why and show up and rules are broken, good stuff might just happen. I think there’s a fairly convincing argument today that The Motley Fool might not exist today, or at least in the form that it’s taken, had I continued to go through the duty-bound first child mentality of I need to be responsible and stayed this job for I don’t know, at least two years so it looks good on my resume.

In fact, it was only a week or two after that that my brother’s friend, Erik Rydholm, they both went to Brown together and Erik was working in Washington DC and he said, ”Did you just quit a job at a financial newsletter?” I said, yeah, and he’s like, well, what if we started a newsletter? In fact, I’m going to come over tonight to your house and you’re going to teach me about how to invest because even though I went to Brown University and I’m from a great family and well-trained, I don’t know the first thing about the stock market. Really for The Motley Fool, the rest is history. Adam, there you go. The story of getting my first job and then quitting my first job. Ask why, show up, rules will be broken. Good stuff might just happen. Rule-breaker, Mailbag, item number 5, and my voice is going. Is anyone else noticing this? I think I’ve talked too much at FoolFest this week. Well, I have generally made a habit of trying to save the best for last for mailbags and I think I’ve done it once again this week. Thank you to Dave Gec for writing in now. Dave Gec is a longtime Fool.

His screen name in Motley Fool community on our discussion boards has been Doug Gecko for many years for those who use our discussion boards. Davis has sometime correspondent who wrote me a remarkable email. I’m now seeing it was on January 1st of 2018, so new year’s day, four years ago, and I’ve shared the story a couple of times in the past in this podcast, and I’m about to share that story again as it preamble to the most recent Gec missive that just entered my inbox earlier this week. Let’s remember first the story of somebody who is really good at saving money. I would say really good with money overall. But here’s the story again from January 1st, 2018, an exemplar to us all, Dave wrote then back in 1975. One of my instructors took a few minutes to talk about finances. He had a recommendation. He suggested that when we graduated, we take five dollars out of our $625 per month that we were going to receive as second lieutenants and do so without fail or changing the amount until we were promoted to first lieutenants.

He asked us how much would we have? Well, knowing it would take two years until we were promoted, we quickly figured 24 times $5 plus interest would be about $125. He commented that yes, it would not be much. But the goal of the first two years was to develop the habit of saving. He then suggested that upon getting a raise, actually two raises because you’ve got one for the promotion and then one for two years of military service, that we save half of the increase, and that we use the rest to pay additional taxes and increase our standard of living. He pointed out that if we could make ends meet on a second lieutenant salary in our 24th month, then we could make it during the 25th month on that amount plus half of the increase. He said to do this throughout our career and we would have a sizable sum by the time we retired. Made sense to me. I didn’t have a career of military service, but I’ve followed his advice with my civilian pay. When I was about 55, my wife and I went out with another couple and the husband asked if we’d saved anything yet for retirement. He said they were concerned as they had not yet started. I related the story of my instructor’s suggestion and said we were probably saving about 40 percent of my gross salary, and they were shocked. “The next day I came home and my wife greeted me with music to any husband’s ears,” Dave wrote.

She said, “You’re right.” I had no idea what she was speaking about. Was almost afraid to ask what I was right about. She said that when she heard my story the previous evening, she thought it was quite an exaggeration to say we were saving 40 percent of my gross salary. She said she’d never added it up, but she did so that morning. We had some money going here and some going there. She was shocked to find out it added up to 42 percent. She said she would have believed 30 percent, but obviously not 40 percent. In all my years, I’ve never heard of anyone else following that approach. I’ve suggested it numerous times, but no of know emulators although Dave closed that note by saying, “I do think my youngest daughter and her husband had been close to following it.” The reason that I’ve shared Dave’s story a number of times over the years is because I think the hardest thing to do to become a great investor is to save in the first place, to have a single dollar of capital, that is yours, that is debt-free, that is investable. For most people in the world today, that is their single greatest challenge.

For some of us, maybe not. Some people like me get handed stuff by their parents and say, here you go, don’t screw it up, keep investing. Other people through force of their own character make great decisions. I just think of these people as being really good with money. When Dave Gec dropped me his next note earlier this week, I thought, A, I’m going to share that with Dave’s permission, which he gave me. B, I want to make sure I set up the preamble, I want to make sure retell that story so you remember where he came from as I share this note with you to close this week. Now, you’ll remember earlier this podcast I mentioned that if you’re down, however much you’re down, I’m down more. Dave was attending FoolFest virtually this week. He heard me say what I said about being down 30 some percent. That’s what triggered this note. “Heard your remarks that you’re down 35 percent or so from your November 2021 high, but up just about that much from your 2022 low. Must be nice,” Dave wrote. “My high was also in November 2021 and I was down over 50 percent.

I have only,” he puts in quotes, ‘had a 20 percent recovery, so I still find myself down 43 percent.’ Am I depressed? Nope, far from it. I still find myself having more than twice as much as I did when I retired in January 2014. I’m drawing 50 percent of my wife’s social security, and she of course, she’s now drawing hers. Next February, I turn 70 and we’ll draw my stepped up amount for being 70 and she will draw on a step-up to 50 percent of my FRA account. Hey, we have eight and a half less years of retirement to fund than we did in 2014.” Dave writes, “Maybe that’s stretching things to be optimistic about I would concede.” “Every year,” he continues, “I use the quotes Harvard fund technique.” This is some numbers here. I’m going to go over this slowly. “Eighty percent of last year’s allowable spending plus two percent for inflation plus 20 percent of the 5.1 percent of last year’s ending balance, capped by at least four percent of the balance, but no more than seven percent of the balance to determine the next year’s allowable spending.” He adds. “plus pension plus social security.

If my savings stay flat the rest of the year, our allowable spend will be over twice what it was in 2014.” It’s not easy for lifelong savers to increase one’s spending so much, and I believe Robert Brokamp’s missive about expenses going down as we age. Currently, my wife and I take four overseas trips a year. As we age, we know, we won’t want to do that and it’s by far our largest current expense. Her mom just turned 103 and though still active, has no desire to travel, so that expense may go up a bit, but will eventually fall. In closing, our investments have done so well that we’ve learned about and experienced things like income-related monthly adjustment amount, that’s, IRMAA, I-R-M-A-A. We’re deep into Robert Brokamp Rule Your Retirement and spreadsheets at this point.” But Dave writes, “Things like IRMAA that I’d never heard of 10 years ago. Late last year, I started to be stressed about generational wealth, which is something we never thought about or really had to consider. I ‘fear’ we still may have to contend with this in future, but the recent downturn has given us a bit of respite from that dilemma,” signed Dave Gec.

Now, some of my fellow Fools know exactly the things that Dave is talking about, especially those in retirement, especially those who were very numerical. What a great strength that is, and probably keep track of things on spreadsheets or if you will, quicken decades later. But many of us may not know what the FRA amount is related to social security or income-related monthly adjustment amount. But we can throw all that aside here at the end of this month’s mailbag because that’s not what this node is about. What this note is about is somebody who is really good with money. I want to say these few things in conclusion. First of all, Dave, thanks for checking back in and I’m so happy for you and your wife, even though you’re down more than I am, and we’re all down around 40 percent. The second thing I want to say, I’m going to restate it here for all of our listeners, I’m no longer talking to Dave, I’m talking to you, dear listener. Some people are really good with money.

As human beings, we’re hopelessly social creatures. We’re constantly influencing each other. A lot of us have heard of six degrees of separation. All of us know somebody who knows somebody. If you do that six times, you could reach everybody on earth. That’s six degrees of separation. Fewer people in my experience know about the three degrees of cultural influence. Another way of saying that is my wife’s coworkers friend helped me lose weight this month. I’ll never meet my wife’s coworkers friend, but that person began behaving better, talked about it a little bit to their friends who then learned something and shared out with their friends and somehow it reaches me. This is all by way of example. Anyway, the point here is, if you want to lose weight, hang out with people who are losing weight. If you want to become a better cook, hanging out with people who are cooking.

If you want to be better with money, hang out with people who are really good at money. I’ve got a secret for you, but since you’re listening to this podcast, I think you already know the secret. Week-in and week-out Rule Breaker Investing, especially thanks to the life breathed into it. from Fools around the world who write in for mailbags. Rule Breaker Investing is your opportunity every week, every mailbag to hang out with the people who are good with money. Best wishes to the Gec family and my friend Dave Gec. Best wishes to you, dear listener with probably all of us down, we just keep swimming. I say at the conclusion of this month, the final day of August 2022, with tiny Tim. God bless us, everyone.

Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. David Gardner has no position in any of the stocks mentioned. Tyler Reber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Okta and Twitter. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

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