I did as much as I could: raising chickens, pushing an ice-cream cart, bagging walnuts, driving a tractor on a beet farm, working on the railroad. I think this eclectic career helped me a lot in life.
I bluffed my way through much of it, I’m sure. Fortunately, I have a pretty ‘up’ personality, and that helped me all the way through. I tried hard and I had pretty good communication skills, so I could persuade my teachers that I was a pretty good kid.
To sit down with a blank piece of paper and write was the most traumatic thing that had ever faced me in life. I had ideas in my head, but I could not get the stuff down. It was a crushing time.
I never perceived of myself as stupid; I can’t explain why. I just thought that if I worked harder, maybe something would happen.
We brought prices down, down, down so they are now essentially commodities. So if we want to succeed in this business, we have to move in a direction of adding other value to the relationship with our clients. And so where I might have said 15 years ago, 'We want to be the best discount brokerage,' today I want to be the best 'relationship company' in financial services.
I think we could double the company pretty easily in that time frame.
You've got to understand that markets go both ways, up and down. Over longer periods, stocks generally have always gone up. But any specific stock may never come back.
Buy an individual stock and you never know. You could go to zero.
When celebration of noble failure becomes institutionalized, people within the organization are more willing to reassess earlier decisions.
I’m sure luck helps every successful entrepreneur. But it doesn’t come [without] a lot of preparation and hard work.
We get emotional and do dumb things.
I can't overemphasize that we have the right kind of client-relationship people who really have the interests of the client at hand first – not second, but first. We are willing to risk short-term revenue to do the right thing for the customer and ensure long-term success.
Fundamentally, to help a lot of people. That really means making sure our clients have a sense that they are financially fit.
We think we have a superior value, and we’d put that value up against any of the traditional firms. Even against the so-called discount firms. We want to be a superior value against any other financial service company, that's our ambition. And we maybe are not there in every component, but we're pretty close.
Every company, a mature company, can look at their costs and redundancies. It's natural for every company that's successful to build up infrastructures that are inefficient. We're all human, we all do that. So that is number one. And you want to take whatever savings you can out of that and figure out how to get it back to your loyal clients. They will reward you with additional business, even if you mess things up.
The value proposition is front and center to us. We've taken out the account fees, the minimums – all these things we've done the past couple of years have been very dramatic.
At the end of every day, having a clientele that speaks well of you, that’s the largest source of business. I don't care what kind of business you're in. Clients referring us to their friends or relatives is so much more powerful than any advertising we could ever do.
Our organization just has to outfox our larger competitors by really emphasizing our value proposition, which is really outstanding compared to them. The good news is we are a highly flexible organization. We have a national footprint, we have low costs, we're efficient, so we can compete at this point with almost anybody and do a great job for our clients.
Will we own the technology?
You’ve got to start with your gut, with something you are really passionate about, for a good reason. You won’t get there by sitting in a closet and thinking, ‘Boy I know the world must want this.’
When I read, I can feel myself converting the written code into sounds before I can process it. Fast readers don't go through all that.
It's painful to think about it. You don't like to go back and review the pain. I don't think 20 years ago I would have talked about this. But someone's got to do it, and I felt sufficiently secure that I could.
Along the way, I’ve frustrated some of my associates because I could see the end zone of a particular thing quicker than they could, so I was moving ahead to conclusions. I go straight from step A to Z, and say: ‘This is the outcome. I can see it.’
When I started in this business, it was pretty crude to say the least. I had little or no resources. I have one favorite example of a guy who came in to complain about something. He was from Chicago and had an accounting background. And I said, well, if you’re so damn smart, come out of accounting and start working here. So he came around and started helping me out. It was very difficult. We were mavericks at best.
I took anybody. They were a full collection of people. They took risks in their careers. Some were misfits at other places. I took a lot of misfits in. There were some strange people. Anybody who was a reasonable person and communicated well, I hired. I was one of the first businesses to hire women.
The fact that I was out here and scrambling around as a little entrepreneur with no resources was fortuitous. I wasn’t encumbered by those old guys telling me what to do.
A lot of things. But they're probably no different from when I had no money. It’s my business pursuits and my personal life, a good relationship with my wife and kids and grandkids.
My goal is, frankly, to make sure our clients have every confidence to recommend Schwab to their friends and relatives if they are thinking about a place to do their saving and investing.
I am the customer.
The nasty little secret was that I couldn't read worth a darn. In my case, I still read very slowly to this moment.
I like to think in terms of giving people an understanding of why they should have the same passion as I do – why their life has purpose working here and why they should believe as much as I believe. I want them to seek a higher level of satisfaction above just making a salary.
I feel good every day about helping people invest; helping them achieve financial independence. It’s about the American dream.
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