Rule Breaker Investing: Great Quotes Vol. 4
Sometimes a good quote can be enough to push a person in the right direction.
That might be a bit of inspiration which sends a sports team to glory or some personal words which an individual cherishes. In this episode of Rule Break Investing, David Gardner revisits some of his favorite quotes.
In examining the words, Gardner adds context, expands upon their meaning, and brings his personal interpretation to some of the great lines ever said. He also explains how he uses some of the quotes touched upon in his own life, and examines some financial concepts that always seem to amaze children.
In addition, Gardner shares a special opportunity he has been afforded which he will soon be able to share with his audience.
A full transcript follows the video.
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This podcast was recorded on Aug. 17, 2016.
DAVID GARDNER: And welcome back to Rule Breaker Investing. It is our Great Quotes, Vol. 4 podcast. That's right! We've done three previous "Great Quotes" podcasts. The last one, Vol. 3, was the all-Buffett edition, which admittedly wasn't actually all Buffett, but it was mostly Buffett and the two before that just pulling from quotes that I love. And that's what number four is. We're not theming this one. I've got four for you, for Vol. 4. But before I start, I want to mention one special thing I'm doing this week, as I tape this podcast, that I will talk about in next week's show, so just a minute or two about my next week.
I have a very special opportunity. I've been invited to be part of the Joint Civilian Orientation Conference. Now this is a program funded by the Department of Defense that has existed for 86 years, so I'm part of the Class of '86. It will be about 40 of us.
And the purpose of this program (the JCOC) is to invite citizens (maybe sometimes even civilian leaders) from the private sector to tour military bases and the armed forces here in the United States of America to see our capabilities and acquaint us with the world of the military.
It is an honor to have been nominated. You have to be nominated by one of the armed services, and I got an invitation by the Air Force. It reflected some of the past work that we've done with the military. We have some great military Fools, and we've done some events over time for the military. I'm really excited.
But what I'm going to get to do next week is share with you (because I'm allowed to do that) some of the experiences and observations I had for this very special week. It's a week where they can't even tell me ahead of time what I'll be doing. We're allowed to talk about it afterward, which is what I'll be sharing with you next week. And if it's anything like past JCOCs, it will be experiences like going on an aircraft carrier, or waking up early to train with the Marines one morning, or going to see the U.S. Central Command in Florida.
So those are the kinds of experiences that I might have. Again, I don't actually know what I'll be doing, but I know one thing. If you're interested in this -- and some of my thoughts coming out of this and some reflections about life -- that's what I'm doing next week. I'm really excited and honored to have been invited by Ash Carter, the United States Secretary of the Department of Defense here in the United States of America to enjoy this very special time with my 39 fellow classmates.
Quote number one this month. This one comes from Jean-Jacques Rousseau. It comes to me from one of my Twitter followers, [@jackjane12]. And here's a great Rousseau quote, and I quote: "Money is the seed of money, and the first guinea is sometimes more difficult to acquire than the second million."
I'll say it again: "Money is the seed of money." Well we, as investors, certainly recognize that. I think that is one of the miracles, frankly, of my lifetime or our society. The world in which we're living, today. That if you have some money (without you doing anything, particularly), you can allow that money to grow into more money on its own.
When I present to kids and talk about investing (especially young kids), the concept that money can just multiply on its own, when invested properly, is really quite a special thing. I'm glad that I was born at a time on earth where that could be possible. The lazy guy in me loves that, but also the patient person in me appreciates that, and I've seen the benefits in my own life, and the lives of all those in our Motley Fool community. Of our employees. Our many members. I hope that you know that's true in your life.
And so how awesome is it that money is the seed of money. But then Rousseau goes on: "The first guinea is sometimes more difficult to acquire than the second" -- not the second -- "than the second million." And this also is a profound insight, and I completely agree with Jean-Jacques [about] that first guinea. The first dollar you have of true savings.
[This includes] getting out of debt, especially in our country getting out of credit card debt. I say that in the United States of America and I'm assuming it's like that in a lot of other places in the world. That's high interest rate debt. Even in a low interest rate global environment, you're often paying double digits just to make up for overspending on your credit card. For some of us it's understandable. Sometimes we face emergency situations where you have to do that.
But for a lot of us, it was preventable. If we made good decisions ahead of time -- worked to live below our means -- it's a Foolish approach to life. We have many people who have practiced that for decades. One of our most popular discussion boards on the free part of our site is called "Living Below Your Means." We have a whole culture at The Motley Fool of people who recognize the importance of saving.
But I know especially if you've come out of college or graduate school with a lot of student debt, it can take years to get that first guinea. So even though Rousseau was writing from the 18th century -- a political philosopher and actually a very talented Renaissance man himself -- Rousseau had it nailed and it's just as true today in 2016 as it was back in the 1760s when he probably wrote this.
It's really hard to get that first guinea, but once you've got that; truly, I think you've accomplished the hardest thing you have to do in your financial life, and from that point on, money being the seed of money, you have an opportunity to grow it. To invest it. And one of the things I love to see is when people really get started investing, they start to get inspired as their money makes more money. And guess what that does to them? It makes them want to save more. It makes them want to be more and more fiscally responsible and better and better investors.
So like most things, once you get a taste of what the reward can be, it's really inspiring to you, and that's part of what we're trying to do at The Motley Fool is just spread that love of investing. Make it something that's as true of your spirit as it is of mine, and boy did Rousseau nail it with his spirited line from a few centuries ago.
With quote number two we're going to stick with the 18th century. This is not a theme that runs all the way through this podcast, but number two comes from one of my very favorite Americans. I'll first give you the line. Maybe you can guess who said it, and I quote: "We must, indeed, all hang together or, most assuredly, we shall all hang separately."
Well, that is a quintessentially American line. It was spoken in the Continental Congress just before the signing of the Declaration of Independence, and it was spoken by Benjamin Franklin. And I just love that line: "We must, indeed, all hang together or, most assuredly, we shall [all] hang separately."
And what I want to say, simply, is that there's a spirit of unity that's in that line that was obviously in our country, here in the United States of America, from its founding. And I think it's such an important spirit, as I think about today's world. Not just in America -- not just about politics -- but really about unity. We must, indeed, all hang together. That's such an important theme for our time. So often there are forces both political and often in the media trying to pit people against each other, and I don't think it's very helpful.
One of the things I love about business is that [with] commerce and trade -- we have to trade with each other -- we make each other more prosperous when you specialize in your thing and I specialize in mine, and we buy and sell from each other. It's so much more efficient than the proverbial (if you're heard it) $1,200 chicken sandwich that sometimes you'll read about, where somebody actually tries to make a chicken sandwich him or himself. For a few months raising a chicken. Growing the bread. It costs about $1,200, which is a lot more than a chicken sandwich costs (even a very good one at a restaurant today).
When you find a place like a restaurant, or a chef who specializes in making chicken sandwiches and you, on the other hand, can sell him or her your talent, that is such a great world; and unity, [particularly] in 2016, is especially important. I'm always sad when I think about forces in our world that are designed specifically to divide people. That pit one group of people against another.
Going back to the Greeks, part of what made the Greeks great (I remember from reading my Edith Hamilton back in my schoolboy days) is the Greeks understood, in contrast to other cultures up until the ancient Greeks, what was common in the spirits of all men (of course men, there, gender inclusive). In the spirit of all of us. Looking for the things that brought us together, as opposed to things that separated us.
So thank you, Benjamin Franklin, and just like Jean-Jacques Rousseau, Franklin and Rousseau just as true, just as wise a few centuries later.
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Quote number three. Talking about true and wise, we're going to go right through to 2016, and I absolutely love this one. This comes from FoolFest, which is our annual gathering of Motley Fool members for our high-end services. It occurs every year in Alexandria, and earlier this year, we had Nell Minow as one of our guest stars at FoolFest this year. She's had a long career in corporate governance. Being a watchdog. Looking for good corporate boards. She's very good at finding bad corporate boards and behavior. On a side gig, she's also a movie reviewer (and a very good one, at that).
Nell Minow -- at the end of her interview with Chris Hill this year (I've got the written transcript and am going to share it with you) -- said something that I think is awesome and therefore merits inclusion in Great Quotes, Vol. 4. And before I share it with you, I'm going to say right away "guilty as charged." I recognize in my own behavior it's about to be inveighed against by what I'm sharing with you, but ever since hearing her say what I'm about to share with you, I have changed my ways, here. Maybe she's about to change yours right now.
She said, and I quote: "I wrote not one, but two articles for The Huffington Post about my advice to graduates, so you can look that up. But my most important piece of advice," she said, "is never, ever, ever, ever, ever," I'm quoting here, "ever use the word 'busy.' That's one four-letter word that I would never use.
"And the reason for that," she goes on, "is that people use that word as an excuse, and it's a genuine insult to whomever you're talking to. It pushes them away, instead of bringing them in, and it also makes it impossible for you to think honestly to yourself about what your own priorities and choices are.
"So never," she closes, "never use that as an excuse. Never use that as a brag. It's very popular, here, in Washington. Just don't use that word, and you'll become much more in tune with what you're doing, and much more open to hearing from other people."
I'll leave it right there.
And my final quote this month comes from me. I realize I don't really merit true status [for] a great quote, but this is one of my favorite things that I've written in the last few years. It's going to end with my one-liner, but I'm just going to share with you this short essay to close this week and it will close with my great quote, and then we're done and I'll see you next week.
But before I get started, I should mention this does kind of fit with Nell talking to graduates because this has me talking to our summer interns. Here I go. This was written, in fact, three summers ago, but it works just as well today.
"Every summer we have about a dozen interns at Fool HQ: some techies, some business, and some investors. I get to spend time with all of them, but particularly with our investor interns, and I always feel like I have to say something wise in my talks. In As to their Qs. Something they'll take away and think about long past the dog days of a D.C. summer.
"I suppose I won't find out if I've succeeded until years later, should one or another of them email me and say, 'David, this is what I remember you said that summer. This is what I learned.' Of course, knowing my own memory, I won't remember what I said, and will simply have to take them at their word. But I did have one of those moments this summer when right after I said it, I thought maybe that's the kind of thing these newly minted Fools will take away, and indeed, I hope so."
It felt quotable. It felt like something I should share with you.
Now, Mahatma Gandhi once famously did not say, "Be the change you wish to see in the world." A five-star sentiment constantly misattributed to the man. He never actually said those words. But I appreciate them just the same, so when asked by one of our interns, this summer, which of the many stocks in Stock Advisor he should invest in (so many to choose from, presuming one can't buy them all) I said, "Make your portfolio reflect your best vision for our future."
And I really do believe that. People have developed, over time, so many complex models. Cockamamie schemes. Computer-driven approaches to buying and selling stocks, many of them with no inherent relationship to the underlying businesses, themselves. I therefore find it necessary (and I hope helpful) to remind my fellow fools of all ages, backgrounds, and levels of sophistication that what we're doing as investors is simple and profound. You are, if you're truly investing, taking part ownership in the companies who share your buying. Your portfolio should reflect you. It definitely reflects on you.
Get this. When you buy stock in a company, there's a very thin, but very real thread connecting what you just did and the future success of that business. By buying, you push the price up. A rising stock price enables companies to finance their futures more effectively, floating more shares for a secondary offering, or making an acquisition using its stock as currency. You probably chat the company up to your friends. And by holding, you take your shares out of the market's games.
So simple. When faced with any group of stocks -- in Stock Advisor and in Rule Breakers we have two new monthly buys, and we have 10 new Best Buys Now -- or any recommendation from anyone, ask yourself this: Will helping out this company, as a part owner, improve my life and the future of the world? Or not? Act accordingly.
And to close it out (and this is my quote), "Make your portfolio reflect your best vision for our future." Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at RBI.Fool.com.
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