Thats the energy we know you have. My name is george and im the Program Director of the Commonwealth Club on behalf of all of us i want to welcome you and you for coming down to tonights terrific program with Charles Schwab in conversation with adam. We are very appreciative to have you all here. How many of you are members of the Commonwealth Club . Thank you. If not, this is a great time to join. Theres all kinds of terrific programs coming up, a great building and there is a gentle man at the back of the rim will be happy to answer any questions you may have about joining the club so please see him on your way out. Thank you. Please take a moment to turn off your cell phones and any devices that might make noise during the program and while you do tha that with me tell you aba couple upcoming programs. October 31, halloween afternoon, fox news anchor greg bear will be with us. November 12 there is no comment and thats just so you all know. November 12 National Review editor rich lowry will be our guest in november 12 in the evening until cavalli, legendary 40 niner jerry rice will be with us. And on november 15, friday 15thy november 15 at noon, actress Marilou Henner who many may remember from the series taxi will talk about why she has a very unique conditions that allows her to remember everything in her life. Very interesting program. The Commonwealth Club program has great travel programs we encourage you to also ask the staff about those. For example the city where you can take an expedition to think of and it to get to new zealand. There are question cards on the seat before going to be collected during the program and brought to the distinguished moderator. Please write your questions early and often and make sure they are questions and make them as legible as you can and we will get to as many as we can. We also want to remind you sign copies of the book is available outside of the room after the program. Without any further ado, please give a warm welcome to Charles Schwab and adam. [applause] im going to hit the gavel for a moment before i get i just want to reiterate i do discriminate in favor of legible questions. So you have been warned. This is one of my favorite parts of giving the event. Welcome to tonights meeting. Im the executive editor of fortune and or moderator for tonights program. This program is part of the Commonwealth Club ethics and accountability series underwritten by the Family Foundation with Additional Support from the Bernard Foundation for our good literary programs. I am now very pleased to introduce tonights guest founder, former ceo and chairman of the Charles Schwab corporation and author of the new book invested changing forever the way americans invest. One of the worlds most influential financial executives with as of 2019 nearly 3. 6 trillion assets managed by Charles Schwab co. He founded the Brokerage Firm in 1971 with a 100,000dollar loan and has since grown into a Financial Services juggernaut. The memoir invested lays out his passion to change the way we invest and the hard work, ingenuity and entrepreneurship that propelled his vision into one of the leading Financial Service firms in the world. From economics at stanford university, to guiding his company through decades of Economic Transformation and flown to beijing she recounts the defining moments of his life while providing unique insight into the evolutionary dynamics of entrepreneurial companies. Today we are pleased to be able to have a conversation about the howto of the Financial Management and his advice on obtaining a fulfilling career and life. Please join me in welcoming Charles Schwab. [applause] a lot of my fans out here. Thank you. A pleasure. I was thinking you might want to quit while you are ahead. Lets start at the beginning, not the beginning of your life which we can come back to, but the beginning of your lifes work. 1975 you have an entrepreneurial moment would you tell a gripping about it is described in the book lacks may 11975 and the congress made a decision to make sure that the commissions were all negotiable before they were fixed for over 200 years and certain levels where the fixed rate plus all the way through and on that day they liberated the whole thing is democratized in many respects the ability to invest any way you want to, pay any price we lowered the price substantially and others raised their prices a little bit like merrill lynch. They created a huge gap for us to enter into with low prices and hopefully great service. We start with four people because we knew the change was going to occur for today we have 20,000 employees. One of the common themes of entrepreneurialism and you write about this you identify it as an entrepreneur the things you see and act on are what separate you from everyone else. So for example the congress did wasnt a secret, it was the opposite of a secret. Everybody in the industry knew about it. So can you reflect a little bit about why what we now look back on as obvious and what enabled you to create your business why you were able to act on it and others didnt. We were not the only firm that entered into that area of discounted commission. There were a few others, most of which were new york. We happened to be in San Francisco. I had fo have four employees ani thought this was a great idea to go into this business. So this was a couple of years before the 75 chain but i had decided customers wanted a better deal than being sold High Commission products, being sold stories along the way where some were true but most of them were just hyper stories and there was a way to create a commission or compensation for this. So, i wanted to have a place for people to invest. I worked as a financial analyst for the next ten years or so and many brokers came to our firm and i was just at a Little Company at the time and just got to know the brokers and thought this is a bad business. So we decided ten years later the first thing i did is said i dont want any salesman in the company, no salesman will ever call you. We compensated our employees by selling upon the success and if we were really successful, we got a nice bonus so everyone was focused on Customer Service because they want to have the new customers grow and prosper and that is how wev how we were different thethey weredifferentn different to get the same model for the next 40 years. This is a profound point you made early in the book you come back to repeatedly. You decided your company wasnt going to sell. You were going to market and we will talk about the marketing because you also identify yourself as a marketer personally. Your book has a lot of nice details about you, about your early life and you are a californian through and through. Tell everybody a little bit about where you grew up and how it was part of your story. Its interesting, my grandmother was born in San Francisco in the 1880s. My father was born in San Francisco in the 1950s, 1950 exactly. I was born in sacramento so basically grown up here and spent my whole life here in california and such and went to school here etc. So im really a local guy. So in many respects San Francisco ended up being for me i could do things that it wouldnt ever in new york city so many people didnt realize i started the company here, but the company here in San Francisco and never had all of the negative things the new york brokers have and maintained so that was beneficial. The other part was the fact that technology and innovation was clearly happening in Silicon Valley and San Francisco etc. So i had a doc that a lot of those great things in the introduction to the company because much more efficient through those years and even before the internet we were applying all of the best technology, so that was really beneficial. Luckily i was here i and the thd thing was we were able to market at 1 00 new york time, still focused on new york. We had all afternoon to clean up the time because there were so much paperwork. Paperwork wasnt technology. We have extra time to make sure the back office was cleaned all the way through and a couple times they were not, but for the most part we were able to have a clean back office. You describe im going to touch on three things that were important in your life to you and one is that when you got out of college, and you have a whole lot of jobs. You did a whole bunch of things. One of them was selling insurance. I dont know if it is right to say you didnt like it, it didnt work. I had a number of jobs and i think it is important to encourage people to get jobs. I thought i got to learn something about the Insurance Industry because i was focused on being in the Financial Services world. So i wanted to work at a bank the year before and been see about insurance. I was a complete failure at that. And finally after about six weeks, they encouraged me to quit. They said youre skeptical about most insurance products, period. It was the failed content that was extraordinarily expensive when you analyze how they are constructed and i decided quickly that it was the 20 year endowment. That was the stupidest thing to ever do because i was always interested in investing and i thought putting your money on Something Like this takes most of the returns out or goes to the insurance company, so that was an early learning. Another early passion of yours was playing for the High School Team in santa barbara. I loved it. Other than enjoying it, why is it such a big deal . I loved basketball. It turned out i wasnt tall enough. There was nothing i could do about that. I played junior basketball and all of a sudden as a sophomore, junior these other guys were 6foot two, three, four, and i decided that maybe it was an area that i should focus on because even at 564557. I wanted to copy and that is the reason i went for golf. Many people will notice that i suppose some will not, that chuck is dyslexic. For four years you thought that you were stupid. Somehow or another i couldnt read as fast as some of my friends in school and it upset me a lot. My comprehension wasnt as good as ours and so i had to read things a couple times to really understand what was going on. To me it was a sort of handicap but i never talked about it as the kind of thing would never speak to anybody about. There was a lot of stigma attached. I discovered when i youngest son had the same exact issues that i have in school when he was seven or eight, to condemn to be reviewed by a psychologist and so forth to see what his issue was with reading and they came back and said your son has dyslexic issues into this, that and the other. It was a great revelation to me to find out that his problems with identical to mine and explained everything. But the word dyslexia, science was really undeveloped when i was young and showing how the brain functions is different in that area when you deal with words and conversion of words. It turns out for me its a lot of the issues i had early on. From that point forward, my wife and i decided to develop a charity thing for other parents who have kids with learning issues like that. We have many families come. You are normal in every other respect you just have a processing problem that you have to identify and so hooked on tapes is a great way to read books. One of the things i admired it is both accessible to the average reader could go deep into all the Major Business events of the career. It is a story about a company, there were four employees here in San Francisco including the 20,000 about 40 years and all the standard sounds. We were very large shareholders of the bank of america and we finally got ourselves back after a struggle. That was 1987. So the story about that was interesting. You will love reading about that. Fortunately we were able to buy our company back in 1987 and start anew in our growth pattern which is sort of a fun story to go back and review. A lot of the stories are fun and interesting. You mentioned a few minutes ago about how and why technology has always been important. Wilwill you go all the way backd playing why technology was first important and why you were so persistent about spending big money on it even when you didnt necessarily have big money. It was sort of the first transaction i talked about. Beginning the Software Problem as we were getting more and more volume, more and more paperwork involved with stuff otherwise we would go deep in or thrive. Thank god we worked hard during the whole time to come i cut ane were able to come out the other end. It didnt come about until 1985 or 86 so using the efficient system we talk about a little bit, but i dont want to bore you with that information. Anyway, the Software Cost 500,000 at that time and the company was worth 500,000. So that was a big decision, let me tell you. You mentioned a moment ago, it was a young company, you are growing quickly. Why did you sell bank of america in the first place . They thought they were going to lend us some money. They sort of suggested that. And they thought this was a pretty Good Business may be lethal by the company and diversify. They flashed a couple of big numbers at me and having come from zero money myself, 55 million was a lot of money and i think it was maybe 40 of the company which was a lot of money with me till you in 1981. So we decide to do that, to make the transaction because i was faced with as we grew and grew we needed more money to grow, you need fat in the capital and i was turned down by many venture capitalists along the way. They did not want to find out further so i had a tough time raising money. The b of a thing was attractive at that time, my age in the development of the company. But soon over the next three or four years it became clear that we were under the wrong umbrella and had to work her way out of there. Not only that but they ran into huge problems. Yes they rented a huge problems they lent money to the shipping guys and it went down the tubes in argentina they had all kinds of south america, on and on. So they had to sell the big building in downtown San Francisco, they sold a couple other subsidiaries and i said so less. [laughter] so i convinced them to celeste and thats another interesting story, they said we will sell you to the highest bidder. That is terrific. But you know very well i am not for sale. You can still accompany and im going to start a Similar Company across the street and it was a real threat because i was going to do. And it was a little bit upset because we read the deal and their stock was like 24 a share in the next four years and went all the way down to nine. So i was not a happy guy for many reasons, that was my total net worth, my wife is in the corner, she is star shy. [laughter] they can sell Charles Schwab but they could not sell Charles Schwab. [laughter] i had a provision that that was not for sale. And have a serendipitous that i use my name and face by that time in the advertising so i was getting people identifying the company with me and i dont know who they will sell it to and the namesake goes down the street about a block and opens up several competing companies. We came to terms and they were happy that they got five or six times with the payment compensation. That was a good return for them. I want to come back to leaving b of a in a moment, but before that you mentioned that the company was identified with you and you were in the advertising and your name was on the door, remember correctly, that was not 100 your idea, can you talk about that. That was an interesting moment in time, the guy who is on advertising executive at the time the same as richard cruiser, a wonderful guy, this is a 1977 where we had a great article in the examiner. The San Francisco examiner, a big picture of me in the pictures in the book and am leaning over this thing, this machine, a quick machine and they had a nice article about how we were doing and growing et cetera. So said to me, why dont we use that picture of you in the ad because before we had ads that saved 75 under transaction cost like a 1 inch, one column by 3 inches and then two columns and we could barely afford advertising at the time but we grew and grew, i think we could afford and out about that size. So they said lets put your picture in the and i said are you kidding me, what do you think my friends will say, you egomaniac. What will my wife say, are you kidding me put your name and face out there. In the guise of the post office thats where they have their names and faces. Anyway i said how about this, well try it once. So the results were ten times what they normally were in the advertising thing. So we convinced everybody i was not that much of an egomaniac house pretty bash off the time and we did it, it worked and we figured that was the way we were going to operate hereafter. Thatll happen. Questions are coming in on the floor and im going to go for my scripting go to the questions im going to read three similar to each other. What advice would you give to a 16yearold just starting investments in figuring out his future path, the second question, three pieces of advice can i take back to my High School Students and lastly, my son is graduating from college this year, what advice would you give him as a guest started with investments. I guess you get questions like this from time to time. Even my grandkids, the company kids, how do you do well in the stock market. First i would say its all about education, you gotta read as much as possibly you can even at 16 how the world functions on the economic sense in stocks or with it, what is a stock, its an ownership in a company and we have thousands of companies in america and our system and we call it the capital system, free enterprise, a better word in capitalist but i have to tell you, this is for the kid, capitalism comes from a latin word meaning head, it means creation invasion, all those kinds of things. Thats why we love capitalism because its a creation, ipods, apples, whatever it might be it comes from the creation of the human brain. Learning about economics and how the all functions is really an important way to start, unfortunately schools today dont how much in terms of economic education. Its a real problem to Natural Literacy hit a very low level frankly and people get into a lot of trouble and bad ideas about credit cards and borrowing and all those kinds of things, they have no clue and they need to learn about that in school. It becomes education, if you want to get successful read more about it, get passionate about it, understand why youre there and they dont have a great investment life, were all living a lot longer. Let me draw down and play doubles advocate on the question in your answer and i would say my advice to a young person would be by index funds and whatever you do dont buy individual stocks because you are probably going to do it poorly because Academic Research proves most people do. Im a great believer of index funds having started one in 1991 called the schwab 1000 that did incredibly well over the last 20 years. It had about 9. 9 compounded and was on the s p 500 and we had a thousand stocks, i was a longtime believer and supporter and recommended it to many people, index funds is a great way to start. However, it is a little bit boring. In fact its very boring. I think for a young person to step into an index fund and get the real fabric of what investing is, how about microsoft, how about netflix, how about facebook and all the things that you see and guess what we will solve the issue, we have a thing coming up next year for young people who want to buy one tenth of a share, one fraction of things so you can take a thousand dollars from the gifts from a parent or something and divide it into 25 different stocks. That will be an easy way for them to get engaged, involved and thats what you want to suck them into what the really about so they get the annual report, interested and curious about what is happening next in the company. I love index funds, is the greatest way for most of us to invest in all those kinds of things. But i think the young kids make more mistakes early on and do it inexpensively. Wonderful segue to the next question, what was the most painful lesson you learned about forming and growing a business. Lack of capital. [laughter] thats what a venture capitalist do, we have a great flourishing system and Equity Capital available for great ideas and you can see what is happened with facebook, they were supported by the great idea and supported by venture capitalists and so forth. So back when i started that was not a flourishing area to speak up. So that is really a beneficial thing to have and i think great ideas even now in many ways you can do an advertisement looking for capital. Is that possible to even put an ad in the paper and say im looking for capital. I want to pay for the ad. [laughter] do you have a favorite mistake that you made that was just a failure . There are many. There have been many. You have to read the book to see them all. Good entrepreneurs do have failures. All the way along. We never knew for sure where we would end up because we had all these Technology Things to do in the money thing, the personnel, very early on i cannot hire the best people i knew, i was lacking different capabilities but i cannot afford the competing salary so had to convince a person come on we have a Great Company and growi growing, how about stock options, that did not cost me anything and they said yeah, okay, that sounds good but we did not get to harvard mbas or stanford mbas, i was the only one actually. [laughter] i appreciate and respect that you dont want to give away every detail so the young people in the room who know about the fire festival in the Music Festival, there is a really funny story in his book about the investment of the Music Festival and thats all i will say. That was before the company started. Two questions of similar from the room, how can investing help address the growing problem of income inequality in our country, that is signed by a Charles Schwab client. The second take on that, how can we lower income inequality globally through economic empowerment. Thats a big issue for all of us that we are facing that has occurred. Frankly i think education is probably the only way to really do it, we have to get more young people interested in why they should invest, why the average person lives until the 65 and 30 years ago and now its 85 are hopefully higher. So theres a huge time. Were we all take care of ourselves and develop our own paycheck in 2030 years after we retire from a company whom we might work for. But that is education and truly critical important. So kids know when they get engaged and do something with 401ks, iras, and to incentivize people to save more and invest more. I think justin the current base if i were president of the United States i would increase the credit on taxes so people at the low end poverty levels would get a tax credit back in increase a little bit this last time in the tax bill was changed probably wouldve doubled at least that. That would help at the low end. My understanding, most people at the loewen pay no taxes so how does that help. They will get a check back but it does encourage them that you have to work in order to get that back its an earned tax credit. To be clear it is implied in those two questions that i just read, the income inequality is not only a problem but a worsening problem and you agree with that . I think sometimes its overstated, were warned about amazon founder and these and normas got awful numbers but i think what happens, there is not enough attribute to the contributions that they do make in terms of innovation and what theyve done to society. It looks like a heckuva lot but most of them have tons and tons of money to Different Things along the way and then guess what they died too and it goes away. For the most part. So i dont think you want to take away incentives, we have a system that incentivizes people to work hard because we dont benefit but all the innovations that some of these will be the people its not for everything, dont take away the incentive, that would be socialism and we dont wont want to drive the same car or witnessing close in life is about our intellectual capacities and creativity and all those things, it makes life interesting than socialism. Im going to read another question from the room, the massive accumulation of funds and index funds leading to overvaluation and compromise in the price discovery process, do you see this as a bubble in the making. I dont see that as all of the bubble, i think price discovery and all these people out there that are doing evaluations of companies and finding gaps when the undervalued and they step in by the thousands, theres probably 10000 hedge funds in all kinds of people at the individual portfolios always looking for new values. Yes maybe 45 of the big investing is there index funds and i dont see that as a problem. You mentioned philanthropy, theres another question from the room, i understand you have a passion for thoroughly through p, can you tell me how you incorporated that into your corporation and the opportunity for your client through the corporation. Youre talking about our terrible funds which is been very successful over the years and we just had the 20th anniversary yesterday and i went to the meeting with the directors and so forth and talking how we have 15 billion and gives out about 3 billion a year end 150 differen 150,000 dt turkeys print and is a very easy way to go about giving and all the paperwork. That is really important but me personally, we always felt before successful in life, which it was obvious to anybody until we were 40 or 45 years of age that we had a responsibility to give back to society where we got benefits, education, helping people learning with issues, or in our case we helped be an museum in town, we did that and lots of things and Charter Schools we had her own foundation and talking about Different Things that we particularly like, education, Charter Schools have been growing that. So we can go on and on and on. I really like the way you describe yourself as a maverick, you made your career poking wall street a little bit so not intentionally. I read it through the lens of what the customer would like, i always felt like wall street was based upon of how much money they can make with the service theyre offering. Not whether the customer likes or not. I reversed the whole thing around. It was a little bit of our secret sauce. My read was you take great pride it just happened to be we reversed everything and they did not like that. We were think about our client first and they do not. Do you think its still the case . Yes. I have ceos of Major Companies saying i would love to have were my employees only get a salary plus bonus pace fun and the happiness of the clients. They love the commission because these guys can make a lot more money with what they do and when they do the business and anyway he would like to come but he cannot do it. All of his employees then they come work for us. [laughter] that would be okay too. I want to come back to bna because it was interesting how you grabbed your business back but before you did if i had the h correctly, you are 46 years old and you commented that you were the youngest boardmember. By a longshot. [laughter] i was ahead of th b of a board t was the most premier bank in the country of the time in the mid mid80s before there is an interstate competition and such. So be of a had a branch on every corner of every town and on their board was and felt like the size of the room here in the big long table and every position had a leather book in front of your name printed out Charles Schwab and so i was pretty impressed about and looked around the room and had people that had transamerica, all the big corporations and they were on the board, somebody was on the board we were all moy men, i think one lady anyway there was 27 of them and i think they all be owned 100 shares of a company. They did not really have a keen interest in this thing in a cayman, my whole not worth in one of the larger shareholders of bofa good, i thought had a reasonably good position to speak out about the company which i was quite like amounts for the first year or so when i started to worry little bit. In many ways you had very good timing with buying your company back and not only doing that but very quickly you took the company public. I have to, i had too much barred money. And i wanted to deleverage and thank goodness i did, we call that the tsunami year, 87, it was rough and ready at the time. He brought the company, took the public and then the crash happened within weeks. Are stock we went public 14 or 15 a share in within a month it was at six. That was not a very favorable thing in many of our clients had bought the stock and thought it was going to be a great thing and fortunately those who bought it are probably a thousand times in value. Anyway it worked out okay if they hang on. The stocks might have gone to six anyway and the value would have gone down anyway but you wouldve had a worse balance sheet. Absolutely no question about it. Anyway it was leveraged by a talking about the details in the fears and the stipulations that i had. Another question from the audience, few founders are able to transition as Companies Grow in maturity and size, what did you find most challenging about the transition, what qualities does someone need to lead through the evolution. Or think there was a part of me, as i look back i did not think of at the time but i knew i had a handicap thing with dyslexia and they needed to surround my people with really smart people who had shared the common vision that we had about the company and what we were about and i have the confidence that i could leave them and they would help me in categories that i was completely incompetent and so as a team we were able to create some pretty good things and i think it mightve been a handicap thing that always lurked in my mind that i needed help from other smart people. I think all the way through, sort of a central theme that i did not think about at the time necessarily but its certainly true. The board famously fired one of the ceos, the only ceo. I had to fire him. That was 2004, we had appointed a gentleman to be the ceo at the time and he lasted about nine months, the board came to me and said it is just not working outward hunger confidence in the decisions et cetera et cetera and they asked me would you become ceo again, i was probably 66 or Something Like that. And thinking, i knew the company needed some different leadership and i knew there was no question about it. So in 2004 we had just come out with this client of. Com boom and we were suffering in the company had been great in 1999, 2000 and fell on rough times in the ensuing couple of years. We needed a new direction. And the fellow that was running it was not providing not so i came back in 2004 and did it for the next four years and i appointed him in 2000 forton hes done a fantastic job and we work still to this moment very closely. One thing that is interesting that you call out about the. The sum of the companys values had gotten out of whack so you had nuisance fees or gotcha fees, explained that but also can you you were still chairman, can you understand how that happened, there mustve been a source you could not have been happy. I was not happy about a lot of things. But you have to rains go when you appoint somebody to do something. And keep your mouth shut. I know its not always sure all the time but. [laughter] so you could probably say i went along with it but anyway, you have your fees and some of you know them, the bank used to charge you every little monthly statement you would pay 3 for this and so forth and those were the things that were nuisance fees and the one thing i really said at this moment the people had paid 30 or 35 for a bounced check and we took that out at schwab we dont have any bounced checks or nuisance fees, all that stuff is gone away, banks still do some of that stuff actually. But everyone is familiar with the gotcha fees. In the Auto Industry is the format. You just eliminated probably the most famous fee in the history of the brokerage industry which is the brokerage commission. We were on the distant and my hope was we would eventually get there where we had enough other business in many respects it would be now to google in some ways in the Search History within use other services along the way, you buy the products and do the things and in their case dont worry we will do what they do, advertising using your information to set you up for these different purchases and so forth. But we have mutual funds and bank in a lot of different ways people use us so commissions we took to 0. It makes it very convenient and i think people we have already seen a flux of new business coming in people seeking out Free Commission and traditional firms coming to us and were very happy about that. When you did that venture backed startup called robin hood taking out a fullpage. Congratulating for folding them on no fee brokerage. I wondered what you thought about that and if they remind you a little bit of you. Yeah certainly, there was competition in the wonderful thing about american business, so much competition, we have to keep on her toes all the time so they were doing successful growth themselves most under most of which were in the accounts and the transactions are somewhat impaired because they dont provide price improvement and things like that. But the transactions are probably a preferred way to do it was your commissions even though you dont get a superior transaction with price improvement going to a benefit to you. Anyway we have firms at banks that put 100,000 in and we would give you free trades. The marketplace was happening so we thought lets do it now. So we went to 0. Do you think how a company treats its employees has a direct impact on revenue, for example the Better Company treats its employees the bigger the return on investment. Absolutely, that is probably the number one resource is your employees. I think we do really well at that and i think we have a value system at swab that everyone hangs onto and if you come to schwab and have other values outside, you do not last very long at schwab, its all about Consumer Service and not about sales. Anyway, its been valuable and weve grown in our employees have benefited. Can you talk about given the last question on employees, talk about has an entrepreneur and a leader you process we have to tell employees to go when you have layoffs, which youve had various times throughout the company. One example was very painful, was after the 2000 crash as a mention the. Com boom in the layoff, a large number of people it was a very painful thing for myself and m wife at the time so we put up a big fund to help people that we had to let go to go back and recharge themselves whether they want to be a nurse or law school or medical school in a fund to help them. So we felt good about the internet the 10 million went away and hurry. How do you decide on your make it or break it choices and in other words, how do you think about risk. I think about it all the time. But also, without taking risk you will never make any progress. So we have many products along the way that we thought were pretty interesting and clients told us eventually they were no good or they dont function properly, we trash them. So we listen all the time to our clients, we are probably annoying to them and surveying services and we want to listen to what they say and try to do the things that they suggest. Do you to use a sports analogy, some people the data tells them what to do and other people there that tells them what to do, over your career can you identify with one or other as a leader. There are many things are done along the way that people say that is a great service, why did you not started last year. They did not know people dont come with great ideas, you have to go to the marketplace and be creative enough to put the idea out there and hopefully most of them stick and if they dont then obviously you trash them. But i think just like some of the great innovations you see, theres obvious innovations that have come up along the way, netflix, so easy to get a nice movie on a sunday evening or something. Right in the convenience of your television. You dont have to go to booktv and all of that stuff, its fantastic or whether your iphone and do that thing, its all these great creations and in fact one of the greatest things that happened in many years is the internet and it just beginning, what happened and what youre able to do because of the capability is unbelievable. It will get faster and hopefully other things will come along and it will give you more privacy than you have today because a lot of the firms have used your private information for the advertising and such. So were talking about this backstage, youll be in control of your privacy. Not today but someday. As someone youre not a technologist, you are not trained as a technologist. Notes. How do you make these decisions because on the one hand with the internet you were clear that this was a big technological change and Charles Schwab corporation was going to invest aggressively, right now in your field Everyone Wants to talk about crypto currency and schwab is not jumping on that bandwagon. It did on the internet. Crypto currency is not something that im in favor of right now because it has them security but no backing of currency. So you want to have full faith and credit of 70 behind it like the u. S. Government that would be pretty important to have this is something that you can dream about and i own one bit coin. [laughter] i got it about three years ago and i guess i had got a half a cord for my youngest son and half recording for my son in law making one coin. [laughter] it was worth 16000 at that christmas and i think within six months it was worth 4000 so i lost 75 of my socalled gift. [laughter] not a good place to be, i kept telling them this is not a great place to be so my son sold everything he had in terms of crypto currency. Anyway hes a sharp investor. [laughter] im a stupid investor. I still own the coin. [laughter] you will be okay. [laughter] i cant remember if its the ninth or tenth year of the economic expansion in the United States, logic or history and common sense would suggest is not a great place to be as an investor, what are your thoughts on that . I happen to be an optimist when youre Something Like myself. I think the undercurrent of the economy is really strong and i happen to be a believer that the tax bill that went through to help our corporations of america become internationally competitive, this is a fantastic thing, the cash flows of company are high and even right now most firms are reporting improved earnings and consumers seem to be in really great position of confidence and it can go on but nonetheless economies and markets are always going down. As a fundamental whether its currency, stocks, bonds, industries, you name it, markets are always going up and down. If youre smart investor, understand at making sure you hang on for the longterm and you look at any chart over longterm and you can find yourself, three years, five years, ten years, eventually and ends up over here. And im talking about things that grow, im talking about stocks not talking about gold or silver, those things dont necessarily grow, they go up and down by shortness of supply or demand or those kansas things. But stocks and things like that are the function that can grow and look at any of the great companies. And to make my point, every company ive ever been on the board of or the s p 500 companies and no management has ever come in and said we cannot grow your. They always have a plan about growth, some do not achieve it but all have a plan to grow. That is what companies thats what we do. Can you talk about the role of mentorship, is there someone the play that role in your life, what important lesson to do learn . I did not have any Single Person that was my coach as such. My father was a lawyer so there was not much background in what i was up to in economics and finance so that was the biggest motivation i had as a kid when her family came up through the depression years and how important money and saving was so that was the fundamental learning i got from my family, make sure you do well enough, packed something away for tomorrow so i read all about it when i was a kid about who the people that did well success in business whether i started drifting towards those in finance and j. P. Morgan or somebody like that and said thats what i want to do, i want to get wealthy, i dont want to sit around and say i cannot buy that. Thats what you do when youre 12 years of age. [laughter] if you want to buy the bike in my case, we went out and found a used bike and i got a used bike. I was happy with the used bike, i did not have the new swinton, agrees that baby up everyday and it really function. [laughter] can you share some words of wisdom about navigating external changes and making them work in your favor . Well, i think for sure education is understanding and what youre talking about and making sure you have every avenue figured out and then take the risk to make the decision to go one way and it does not work, change your mind and come up with a different way. Be flexible. Flexibility in understanding how to be flexible is really critical. I promised you and everyone at some point we would talk about marketing and you write a lot about why marketing is important to you and not Just Marketing but also Public Relations and public speaking. Can you talk about that as a business leader. Those were all learnable things, and i learned about marketing for instance, i learned about pr, i learned i never learned how to be a great salesman, i could never do that, particularly if it was a bad product. [laughter] like insurance. [laughter] i always wanted to surround myself with something i could be really enthusiastic about, the great product i was deeply involved in in high confidence in. So we created schwab. I like to talk about the company because what we do and what we stand for and all of those values that our company has and in the pr we go around in the early days of the company and we cannot afford much advertising, very expensive but we certainly could afford it today. But i went around to stations all around the country to try to introduce the world of the benefits of discount brokerage and it seemed to work and i would introduce the appointments with different radio stations and tv stations and few articles of the newspaper like the one i talked about early on and continuous to be out there in front and then talk to groups like this about the benefits early on. In talking to groups about the benefice and why it was important to you and how to save money and be able to make decisions and three Commission Sales guys. So that was what we did. I remember you saying in any interview you gave you ended by saying give them the 800 number or come see us. Something to the effect. Thats what a good marketer does. Call 872,784,000. [laughter] also about communicating with journalist, you have some wisd wisdom, this is my personal favorite passage that i will read and share this with other ceos and in 2004 or 2005 when you were in to the beginning of the return. The turnaround of the company my former colleague at fortune who i believe you work on an article with Corporate Leaders with dyslexia, she said i want to write about the turnaround at Charles Schwab in the executive advised you that was about idea, too soon and it did not prove anything at. You write, if there were any number of reasons to say no but i knew a good story requires attention and we had enough progress under our belt that i thought we should take the chance and in retrospect the piece focused on david departure then we had hoped and it made it more dramatic story as opposed but the underlying theme was clear, we were fixing swab. There is a picture of me in fortune materially love is me i think it was 13 years of age and Fortune Magazine and she had a child with dyslexia and she did an article about executives who have dyslexia in the background. So she interviewed me another cs and unbeknownst to me she got a picture of me at 13, i was the front page of the Fortune Magazine thinking oh my god. But nobody recognized. That was good. [laughter] we used to have a big staff of photo researchers who would find that sort of thing. [laughter] your part of that fake stuff. [laughter] i know you are joking about that because you had the presence in mind to say to your people, yes they have to find some of the bad stuff, thats their job and thats okay because that makes a believable and authentic when they told the whole story. Not all ceos are like that. Well another there is one. Your story with having a photo of the 13yearold and working with other parents and children, it reminds me that its not just about numbers on a spreadsheet for you, you do want to make money and you said that clearly but its about more than that. Can we in and explain the people how you managed to not only build a business but have a good time doing it and why that matters to you. You think about purpose of life and what youre trained to do, youre trying to maximize the best of your ability whatever it might be and i always have great admiration of music and musicians, its greater than being a doctor or lawyer, whatever it might be, just pursue your passions and i had a young boy in today who is applying to college and i like to help these kids get into the best school but thats a conversation we had about pursuing your best and what they might be in making a business like myself and being successful in a huge obligation to get back a large part of what we do in terms of being successful and were happy to do that for sure. I think every kids needs to find a direction in life and the compassion they can contribute the significant way the best they can to society. How is your golf game today is as good as i can remember before we close please bear with me are things to Charles Schwab founder and former ceo of the Charles Schwab corporation whose new book is invested, changing forever the way americans invest, this program has been part of the ethics and accountability series underwritten by the Family Foundation with Additional Support from the Bernard Orchard foundation for the goodlett programs. We would also like to remind everyone in the room that signed copies of his book will be available outside this room following the program i am adam leschinsky and now this meeting of the Commonwealth Club is adjourned. Working. She spoke about her book diversity inc. At barnes noble in new york city. [inaudible conversations] hello everyone. Welcome are welcome back to barnes noble upper west
comparemela.com © 2020. All Rights Reserved.