Episode 12

Host: Matt Hall

Matt Hall: 00:00:00 Welcome back. Long View listener. I'm so glad you're here for a special episode number 12 of what I think is our first season and on today's show I'm going to provide my thoughts on the guests I've had so far and offer my reflections on why their ideas matter to you, the listener. Plus, some of you have asked for backstage information, like how did I get the guest to come on the show? Which episode is most popular and so on. I'll talk a few of these nuggets into our episode. I'm calling this the mix tape for some of you people of the 80s or our greatest hits. I'm also gonna go over why I started this podcast, the original mission and if or how that mission has changed after starting in recording 11 episodes. No, this is not going to be a top 10 list. There's no order to what I'm going to share with you. These are just some of my favorite clips.

Matt Hall: 00:01:05 As you may recall, this is a podcast to help you reframe the way you think about money, emotions, behavior, and time. And this first clip from episode one with Marilyn. Wechter is mainly me talking with a little bit of commentary from Marilyn and I love sharing this story or reclaiming this story for us because it helps highlight what I think the podcast is all about. Check it out. I had an experience recently that reminds me of I think what you've done for me and what you do for many others. I have been having problems with my shoulder and it's been really bothering me and I've done some physical therapy and gone to see experts and finally they said, you need to have an MRI. And I've only had an open MRI before. I had never had like the real one with the big powerful magnets.

Matt Hall: 00:01:55 And so I had a little bit of anxiety going into this MRI, not because I think I'm Claus for phobic, but because it was a new experience and people had said, Hey, it's a tight space. As I got in there, I saw someone I knew, I felt pretty comfortable. The person who was helping me said, Hey, this is going to be easy. You can handle it. Keep your eyes closed. No big deal. As I started to go into the tube, I felt my uh, opposite shoulder, not the one we were going to be taking pictures of, but the other one sort of grays against the tube. And it surprised me in a way that made me want to open my eyes. So I did and it freaked me out and I said, excuse me, pray me back out. We've got to do something different. We came back out and she calmly said to me, okay, I have some glasses that I think are going to help you.

Matt Hall: 00:02:39 My instant reaction was, there are no glasses that are going to make that too bigger. The tube was tiny. The thing was inches from my face. I don't want that feeling again. But she said, no, try it. I think you might actually be able to do this for the glasses on me. I started sliding back into the tube. I'll be darn if those glasses did not do the trick. She said they were called prism glasses and they allowed to see down sort of pass my own feet and I could see her, Cindy, Cindy, she was helping me. I could see her and if I needed to talk to her, I could speak to her through the microphone. I had the same setup, the S the same reality was all around me, but the experience was completely reframed by these glasses that had, I guess like mirrors in them that shot my vision instead of straight up, straight out to the opening and I couldn't help but think almost instantly as I, well after I made it through the 40 minutes of weird noises and wearing these prism glasses, I couldn't help but think that that experience is so connected to what you do for us and in part I think what my firm does is it sort of reframes the experience or re-contextualizes the world around you in a way that allows you to cope and keep going.

Matt Hall: 00:03:54 Does that, does that story connect with you in a way that it feels true?

Marilyn Wechter: 00:03:59 Oh, I think it's a great, it's a great metaphor because life is how you look at it and that that also gets back to talking, that when we're set in our ways of understanding the world, it's pretty fixed. The idea is to have that be flexible so that you can look at things from different perspectives and when you're able to look at things from different perspectives, you have different reactions and then you have different options that we narrow ourselves in just like that MRI tube and feel claustrophobic with what possibilities we have. When we can expand that or look at it differently or focus in a different way, we expand our possibilities.

Matt Hall: 00:04:43 Ooh, yes. I love sharing that story because it gets to the heart of what the podcast is all about and now let's jump into another clip from Marilyn all around kids and money without question. One of the most popular topics we see in any content my firm puts out enjoy.

Marilyn: 00:05:01 That's one of my passions, the idea of what we do with privilege and how we raise kids with privilege in part because those are the kids who are going to be taking care of me. So I want there to be some sense of reasonableness. I think what parents have to recognize is that their kids are watching everything they do. So if they're being hypocritical and saying, Oh, money doesn't matter, and yet all they do is work and money is the God that they worship. They're sending a different message to their kid. I think that the reality for children is they don't care whether you have money or don't have money. They just want your presence. They want to feel as if you're there for them. And I think sometimes the more we have, the harder it is to remember that it's the simple interactions that matter for kids. It's not all the bells and whistles.

Matt Hall: 00:05:53 Okay. This next clip comes from my man, Jared Kizer, who's one of the people I know and I love this clip. Even though that's going to go down a little bit rough because we're talking about investments and I have heard from some of you out there that even in my best attempt to simplify the messaging, it sometimes is a little clunky, but I think Jared does a great job of trying to categorize the different styles of investment management. And I think it's worth your time. He's one of the best thinkers I know and he really breaks down these three categories pretty well. So stick with him.

Jared Kizer: 00:06:26 So the best categorization of this that I've come up with is to think about there three categories of investment philosophies that I think are digestible. That actually means something. Uh, at this point, cause I'm definitely in the camp that says the passive versus active, uh, distinction has gotten a little bit muddled at this point. It doesn't mean as much as you would want it to to mean. So I think of basically traditional market cap weighted indexing, which I, I think of that as like a couch potato approach. I'm going to go out, going to buy total market indexes, maybe U S international emerging fixed income. And just going to call it a day and know that over time that's a very good portfolio. There's no disputing that that's, that's the basis of everything that we do, that that type of approach has beaten the vast majority of, of active investors and will continue, continue to.

Jared Kizer: 00:07:19 Then the sec second category that I think is pretty easy to understand. What it means is the traditional approach to investing, which we would call active investing in a conversation that you and I would be having, which basically says, again, I'm going to be able to identify somebody that has personal knowledge or a team of people that are going to be able to outperform that couch potato total market type of a approach. And then category three for me is what I think of is evidence based investing, which means I'm going to take the indexing concepts which are great, but also be aware of what the academic research says about particular systematic ways to potentially do better than broad market indexes. So in our world, as you know, that would be things like, there's a lot of evidence that value stocks as a group over time outperform a growth so you could apply the concepts, keep all the great stuff with with pure market cap weighted indexing, low cost tax efficiency, and then think about do I want to pay more attention to what some of the academic and practitioner evidence shows about particular asset classes that I might want to overweight in some type of systematic, uh, way.

Jared Kizer: 00:08:31 Now I think people can get confused, understandably. Was that not active? We don't think of it as active. Obviously it's rules-based. It's based upon academic research. It's not based upon proprietary research. These are things that are well known at this point, but that said, it is different from the kind of the total market type of approach.

Matt Hall: 00:08:53 Okay. From Jared Kizer to someone who was at one point in his career, his boss, my man, Rick Hill from Delaware. Rick talks in this clip about a classic story that I think is hugely important still in the investment category, but about a brave decision that the big beer company in St. Louis made back in the old days to manage their own investments. And Rick is my man. He oozes integrity. And I hope you loved this clip and classic story. And I think one of the coolest things, and we tell this story a lot about the brewery is back in the uh, mid eighties, they made a really brave decision with how they manage their own money. And I think this is great foreshadowing for what comes in your own future. Can you tell us a little bit about the story of how the brewery managed their money and how they made a really important decision that was in many ways ahead of its time?

Rick Hill: 00:09:49 Yeah. This gets us back into the kind of the investment field. When I was, I was the assistant treasurer of Anheuser Busch and I'm in the treasury group. We did an analysis, the pension committee and has a Bush said, you know, we want you to somebody to look at our, our how we invest our money. We haven't done that. Well investing money in the last, you know, 10, 15 years, is there a better way to do it? And because what they said was, yo, we have a, you know, we have a consultant that identifies the best money managers for our pension. They can identify the best active fund and fund manager and the best international fund manager. And they'd been their benchmarks over the last, you know, three and five years and we give money and the next couple of years they don't do that well and they've got to be ready to replace.

Rick Hill: 00:10:32 The consultant says, we want to replace this one manager then done that. Well we've got somebody better now. And so they kept moving money around but never did well. So we did a study and what they found was that buying just the index funds or buying the benchmarks with dough then, but trying to pay all these high fees for the active managers. And so they fired the consultant, they fired the active manners and went to straight to index funds and the pension plan. And then they also changed in the 401k options for this, for the employees. Every one of the, they got rid of all the active funds in there in the 401k plan and went to all pure index funds except for it. Then you could still buy Anheuser Busch stock. So I saw this results of this study and I had been still picking stocks.

Rick Hill: 00:11:19 Up until then. I thought I could still, you know, studied the markets and do do well by picking stocks. I looked at all this evidence, they presented to the pension committee. I said, wait a minute, this looks so overwhelming. Why would I try to pick stocks when it shows that the benchmarks wins? Almost the measure almost every time, not every time, but the high majority of times, one by the index funds. So I sold all my individual stocks and all I do is buy index funds. And so from that point on I said, I'm not going to spend all my time doing all this extra work. I was doing trying to pick stocks.

Matt Hall: 00:11:55 Thank you Rick. And here's one more great story from Rick on the value of time and time freedom that comes from making smarter decisions in your investment life. Take it away, Rick.

Rick Hill: 00:12:06 Yeah. And I think in addition to helping you as an investor, it also I think frees up a lot of time because what I figured out after I got the evidence about, you know, buying index funds rather than individual stocks, I went back and looked at all the time I spent uh, reading financial magazines, getting barons on the weekend and going through that page by page, uh, go into economic forecast lunches given by banks here in st Louis. I figured I spent a hundred, 240 hours a year and when I consider kind of wasteful and had no value, wasteful time, which is roughly six weeks of my life, 40 hours a week was really had no value. And so besides getting me a, I think a better investment plan, it freed up a lot of time to do other things in my life. Whether it was, you know, doing more at work or doing more with my family or doing more activities. Um, it's really, uh, it's a game changer as far as time saving time, uh, trying to do other things. If you, once you believe this philosophy of getting access to the market in a low cost way, uh, it saves a lot of, and once you, once you believe it, honestly believe it, it saves you time.

Matt Hall: 00:13:23 all right Rick, thank you. And now to Dave Butler, who for those of you who listened to this episode may recall I really don't want to work for anyone else, but I said I would work for this guy. He is an ACE of a person and I loved this clip because he talks about the really lucky decision he made as he was looking for his ideal job and leaving New York city. He's trying to figure out what's next for him and just out of wanting to honor a commitment he had made, he ends up going to an interview that changes his life and he eventually becomes the CEO of a company he almost never interviewed with. Check it out.

Dave Butler: 00:14:12 What do you remember from those days? Well, new York's a great city, a lot of fun. I remember as a, as a young 20 something, a kid in New York, but uh, you know, a main takeaway I think is that I was probably three years into the job and just, um, was not overly excited about what I was doing and not overly excited about what I was seeing in that world. And, and what I was seeing was, uh, and you and I talked about this a while back was I've seen, you know, from an investment perspective, it was, it was speculation. It was high commission. It was high transaction. It was, is there a way for me as the broker to you to get you to trade, uh, more often than should. And I just, the experience was not a positive one for me. And so I had made the decision about three years into the role that I was going to get out of financial services completely and go back to California and be a high school teacher and a basketball coach.

Dave Butler: 00:15:06 And I wanted to make an impact on people and I thought I could do that as a teacher and a coach with, with high school kids. And I think it was about a week before Christmas break back in 1994 I was at my desk, I was reading the wall street journal and there was an ad on the 17th page, bottom right corner two line ad that said money manager, Santa Monica, California. And as a California kid, I liked the three words, Santa Monica, California. So I, I sent a resume out and it turned out that it was dimensional fund advisors. And I walked into the office that day, went up to the 11th floor, got off the elevator and a guy named Dan Wheeler who you know well Dan who started the financial advisor business at dementia, was there to greet me. And then off to the left was David Booth. And a gentleman named Merton Miller who was a Nobel Prize winner and on the board of directors at the time.

Dave Butler: 00:15:58 And David said to Dan, he said, you know, I've got another meeting to go to. Would you mind taking Merton to lunch with you? And Dan said, sure. And so there I was on my first interview, at Dimensional with a Nobel Prize winner in finance. And he was going through all the simple capital market tenants, you know, markets work and diversification is your buddy and so forth. And just was a terrific guy and just the most modest gentleman I think I've ever met. And you know, walked out of that meeting with Merton and I went back and talked to Dan for a bit and then I talked to David Booth and I went home that night and pull out my old finance books and started reading the names like Fama and French and Miller and Shoals and so forth and thought, well this is something interesting and something different and something special.

David Butler: 00:16:42 And, and Dan made a statement to me that day that really caught my attention and really made me rethink why and how I could be in financial services. And he, he said that, um, you know, we're going to change the way investment advice is given in this country. And I thought that was a pretty big statement, changing the way investment advice was given in the country. And he went on to kind of suggest that there's this new breed of independent advisors who worked in the best interest of clients and they acted as fiduciary to the clients and so forth. And he, he described this model that he thought was going to be the model that would be the main model going forward and the business over time. And it turned out that that was the case. And, uh, it is inspired me. I thought this is the first chance I thought I could be in the financial services space and do something good for clients and do it well. And I literally left that meeting with Dan and signed up the next day. You fill out, you send in the resume and respond to the ad. I have to imagine one, you've never heard of dimensional, never heard of dimensional. I mean who, who had it at the time. Right. They weren't seeking, uh, you know, public awareness and only at the

Matt Hall: 00:17:49 time marketing or selling to institutions. Right, right. Yep. So you couldn't have gone to the interview thinking this is my dream job. You were thinking Santa Monica, California.

Dave Butler: 00:18:04 they write. And I, and I, you know, this is sort of where luck in life comes into play too. Um, I had made a decision, I was at home for Christmas break and I was probably 45 minutes to an hour away from, from the job interview. And it was that morning. And I thought to myself, you know, I didn't really understand the description the way the person that I had contacted described dimensional. And I thought it was a sort of a, uh, a retail kind of a job. And I was an institutional salesperson in New York and I'd worked for one of the big investment banks and so on and so forth. And so I thought to myself, I, I think I'll probably just not go take a pass on this and call in sick. And, um, I made a decision right before that I said, well, I made a commitment, um, to be there and, um, something, you know, from the days of your mom and your dad telling you, you know, meet your commitments.

Dave Butler: 00:18:56 And so I had a, I had a commitment and I said, I'm going to, I'm going to go. So I went in and had that interview, uh, that turned out to be the interview with Dan and with Merton Miller and you know, um, one of those great lessons in life around, you know, um, giving your word and making a commitment to what you say you're going to do. And, and, um, you know, looking back at it, you know, it, it could be described as luck or it could be described as, you know, these are some of these real simple principles that I think of, um, that are important for anybody as they live their life, you know, um, making a commitment and stay into it. And that turned into a quote unquote luck for me.

Matt Hall: 00:19:31 What a turning point. I mean just so huge. Well we're all, I'm glad you, I'm glad you kept your word and you don't have to.

Matt Hall: 00:19:41 Thank you Dave Butler and I love to taping that episode in Austin, Texas. That was great fun. Now moving on to Joe Saul-Sehy a person who has a massively successful podcast in financial services talk that creates in the high hundreds of thousands of dollars in revenue and this show is called Stacking Benjamins. Joe had me on when I was promoting my book odds on and I wanted to have him on the podcast when we started. Take the long view and I love this little clip because it talks about his inspiration for creating his podcast. Check it out.

Joe Saul-Sehy: 00:20:16 I've been listening to podcasts since the beginning and people told me because I'd done radio, I'd done television, that I should have a podcast cause I talked about the nonstop and how much I liked him, but I had nothing to say. I just, and I didn't want to have a me too show, just something different or something the same. You know, I didn't want to do the Susie Orman yell at you about your money or Dave Ramsey talking about debt 24, seven with the colors. I didn't want to do any of that. And so I kept saying, Nope, I don't have anything. And one day I was mowing lawn and I was listening to this NPR show called car talk. You familiar with car talk? I am. Yeah. So these guys click and clack. One of them has passed away now, but they still play the, the shows, uh, because they're so evergreen. I'm listening to these guys or people that don't know car talk. It's a show about cars, but you really don't learn anything about a car. You just kind of get enveloped in car culture. And all of a sudden I realized at that point nobody was doing that with money shows where you work, trying to learn anything. You were just enveloping people in the culture. And that gave us a big aha that maybe, maybe there was something that we could talk about.

Matt Hall: 00:21:27 Okay. Joe Saul-Sehy and now another clip from Joe where he talks about a process that he and his wife set up for Sunday nights.

Joe Saul-Sehy 7: 00:21:36 We have a discussion, Cheryl and I on Sundays about our money, half an hour over a glass of wine. It's a ton of fun. We used to fight about money like cats and dogs and now, now we rarely have a disagreement about money because that little short meeting we have every Sunday, that's a part of our process. It's better than a budget. Just that little bit of communication that we've institutionalized is phenomenal.

Matt Hall: 00:22:01 Thank you Joe. And one more good one where he talks about I think one of the juiciest and most related clips that connects to what we're doing here in the podcast. Stay tuned for his last sentence here in this section.

Joe Saul-Sehy: 00:22:15 I think we continue to explore what this idea of the science of play really is cause you know, and I'll say something that will never been on our show. We're not playful on our show just because we want to mess around and don't get me wrong. There's no better job than having a job where he gets to make yourself laugh all day. Like that's fantastic and dumb dad jokes. That's great, but I believe that it's, it's actually a way people learn. If you don't think that you're learning, you are much more open to learning.

Matt Hall: 00:22:46 Thank you Joe Saul-Sehy, the man who tapes his podcast in his mom's basement and onto my friend Cheree Barry, who makes beautiful paper for people across the globe. Sharia says something in this clip that I think I love about as much as any quote I have here. Check it out. Especially when she's talking about paper versus Twitter.

Cheree Berry: 00:23:11 Let me just emphasize that. I think it's about sort of that engagement that is behind it. So it's, it's about stopping people in their tracks because they get something that is not the ordinary way in which people get things today. It is not lost in a crazy inbox. You can touch what we create, you can engage with it, you can save it. You can't really save a tweet or a anything like that that we might be seeing on social media. So it's getting people out of their comfort zone in a way that delights and excites them. And that is really

Matt Hall: 00:23:45 the message that we hope people hear from us. All right, and onto Maryland. Wechter one more time. Talking about money and kids again, and this podcast got a lot of attention. Why no more helicopter parents, now we're talking about snowplow.

Marilyn Wechter: 00:24:06 There's a new term that's being used. You know, we used to talk about helicopter parents who would hover above and fixings. Now the term is snowplow parents where parents come and clear every obstacle out of the way. And so if you think about spoiled, what you're talking about is kids who haven't had the opportunity to figure out how to solve problems on their own haven't had the opportunity to figure out how to get something that they really want other than passively being given to. So I think what he's talking about, and I think lots of us in this field are trying to talk about how do we raise kids so that they have a sense of worth that's real, not confuse self-worth with net worth, that they have a sense of their own ability to make things happen and that they have some idea of what money can do and what money can't do and how to use it, how to use it wisely, how to understand the difference between needs and wants. You know, the idea that needs are to be fulfilled, wants, are to be understood. And so when we talk about spoiled, there are four things that we see over and over. And that is kids who are spoiled have few chores or responsibilities, not many rules to govern their behavior or schedules, parents and others lavish them with time and assistance and they have a lot of material possessions.

Matt Hall: 00:25:31 Now could you say those one more time because one of the bits of feedback I get about the podcast is people love takeaways. I'm highlighting for them these takeaways because I think those are great. So one more time.

Marilyn Wechter: 00:25:44 Okay. So the four primary things that spoiled kids have in common, few chores or responsibilities, not many rules to govern behavior or schedules, parents and others, lavish them with time and assistance and a plethora of material possessions. So if you think about that and you think about how that interferes with development of autonomy and the internalization of rule setting and organization, you can see how it gets in the way. So again, when you think about what are the traits we want, we want to kind of nurture curiosity, patience, thrift, generosity, perseverance, modesty and perspective.

Matt Hall: 00:26:35 Here comes Marilyn Wechter one more time talking about success and whether it dilutes your child's hunger or not. So if a family can pay for their child's college and they do a good job of saying, Hey, we value this so we're going to help pay for it. Do you think there should be any participation?

Marilyn Wechter: 00:26:55 Yes, I, I'm, I am and I'm jumping on you there because I feel really strongly about it. I love the idea of skin in the game. So that one of the things that I often advise families to do is any money you are in over the summer, I match. And that's your spending money. So in other words, I will reward your hard work. And so if you save this amount of money and you don't blow it on ice cream or movies, you'll have X and then you know that I'm going to double that, I'm gonna give you X. Otherwise I think it's way too easy for kids to just be passive. And I don't think that that helps them. So I say the same thing about cars. Kid turns 16 if you're in a position to give your kid a car, that's great. Have them have some skin in the game, have them research what cars cost, have them research.

Marilyn Wechter: 00:27:47 What is insurance costs? You know, maybe you give them one tank of gas a week, but then if they go through that, it's on their dime. So if they want to drive their friends all around and it goes more than a tank of gas, they have to pay for it. And then they have to decide is it worth spending their money or is it just okay if it's your money, have some skin in the game? Because if everything is given to you, you don't have to strive for anything. And again, as parents, whether it's about money or anything, what you want to do is reward striving.

Marilyn Wechter: 00:28:21 Yeah. I think that gets to this chronic worry. I hear from people that says I want to be successful, but I don't want my success to dilute or ruin the hunger that my little person should have. Right.

Marilyn Wechter: 00:28:37 And I would argue that your success is not what dilutes your child's hunger. It's how you frame that success and how you help your child learn to create something for themselves. So it's not your success. That's the problem. It's how you frame it.

Budd Reisinger: 00:28:55 As usual. Maryland Wechter has great insight into the world of money and emotion. Most parents fear the talk, not the birds and the bees, but the money talk. I'm buddy Reisinger a long time member of the Hill investment group team. That helps translate Matt's thinking into action for our clients. If you'd like help. And having the money talk with your kids no matter what age they are. Head over to Hill investment group.com and set up a complimentary call or meeting and let's start talking.

Matt Hall: 00:29:22 Thank you Marilyn Wechter and now I went to Greenwich, Connecticut to tape with this 50 something billionaire who really impressed me. David biller. I felt like he had been meditating for about three days when we did our interview. He just seemed to be on a different channel and I loved the channel he's on and want to go there myself. Check out this quote from him talking about tennis. I couldn't make it through this whole thing without talking about tennis and Roger Federer who's on my dream list of podcast guests.

Matt Hall: 00:29:53 I'm a huge Federer fan and it does sometimes feel like he is, he's playing a different game. I saw him play at Wimbledon several years ago. That was one of my dreams. To see him play on center court and I've never seen someone so comfortable and at ease. I strive for that own, that same level of ease in my own life. Well, you know, it's interesting to say that you start thinking of playing for the longterm. You think about how he's adjusted his life to have longevity, how he moves on the court. It's less physically taxing than adults, physicality, which you see the injuries, you'll see Federer's conscious choice to play less tournaments, to not play the French open. So he is making choices today that benefits the longevity of his career.

Speaker 1: 00:30:37 More from David [inaudible] on getting his job at Goldman Sachs.

Speaker 10: 00:30:43 So I made it my mission to get a job at Goldman Sachs and I was 22 at the time and I looked like I was 12 at the time as well. And I remember going through the interview and the guy looked at me and they were interviewing like 40 people and they were taking two fourths to summer job or something. It was pretty solid. And anyone experience. So he asked me, is there anything I should know about you at the end of the interview? And I said this in sounds so cheesy but it was appropriate for the dynamic because it was a highly empathetic connected thing. And I said, cause I was only 30 minutes. I said to know me is to love me. And again, it sounds, I apologize for the cliches of it, but it's almost embarrassing to say now. But I said to him seriously, and he was making him in his late forties and I told my friend this after the interview and he's like, you'll never get that job.

Speaker 10: 00:31:28 That was like ridiculous to say that. And I ended up getting the job. It was really a Goldman that this whole world of financial unfolded to me and I was really interested in truth or I was really interested in how do people then make money. Just as I was interested in what makes Bjorn Borg the best tennis player in the world at the time or years ago, you look at his odds and maybe he won 60% of the time, he still lost a lot. And in the world of finance, we're consumed by anecdotes, small cap, large cap growth value. And there's that quote. Even a broken clock is right twice a day. And I'm sitting there surrounded by amazingly smart people, Goldman with an infinite amount of different stories about what works. And I was on this mission to figure out excellence and what's the best way to invest.

Speaker 1: 00:32:16 All right. And another one from David [inaudible] as he talks about wooing the legendary cliff Asness to help start his company. I love his persistence and I think you will too.

Speaker 10: 00:32:29 I would spend a year trying to convince cliff to do this. And he was an immovable object full while he was doing quite well, the group was doing quite well. He loved it. It was everything you wanted. And I remember him calling me up telling me his decision was not to go. And I was so bummed. I remember seeing my mom and dad and I was like depressed for this whole weekend. And they were like, what's wrong? And I remember saying to them was such this intense passion. I put my finger, I go, cause there was, I was this far away from creating something really special. And I remember saying that and I was just so visceral about, uh, so bummed out when he said no initially. And I think I saw the empathy and my parents were like, Oh, they didn't know what it was or what it could be.

Speaker 10: 00:33:07 And it was like, Oh, okay. But I still kept at it. And I think I've heard cliff say this, that, you know, when he decided to stay, sometimes you get that rush that was the right decision. I think cliff felt and maybe wasn't the right decision. And so I kept at it. And I remember six months later, I finally get a call from cliff at my home in Chicago at this time I was living and he never called me the guy. We just never ever call me. And, uh, he goes, Hey, it's cliff. And I'm like, w he had nothing to say like he, there was nothing, he couldn't get the words out cause he knew that he was with me. He'd be opening up a Pandora's box going, I'm pretty agitated, moving forward and making things happen. And I go, you ready? He goes, yeah. And that's where we, uh, yeah, this was that simple of a conversation.

Speaker 1: 00:33:54 All right, David [inaudible] we're coming back to you one more time. I love this quote because you pack a lot into a short little ditty.

Speaker 10: 00:34:02 I think when you combine empathy and intuition, but again, not a psychic intuition and authentic care of others. I think I come at this with a sense of tremendous gratitude. You know, the fact that being an orphan, you know, Sana Silvana orphan and men's clothing salesman and having these dreams of doing something that would be rewarding to me to feel a good healthy dose of luck that we all need, which is really a confluence of events and having the humility recognize any quote unquote success has some combination of luck, risk taking and skill. And I come with a sense of real gratitude

Matt Hall: 00:34:38 from Greenwich, Connecticut to New York city.

Matt Hall: 00:34:42 This was without question, one of the most fun conversations for me because I've been a fan of Danny Meyers for a long time, read his book, setting the table and just was tickled by our conversation. Probably had three or four hours where the content we could talk about, we jammed a lot into our time together and these clips are going to come at you one after another. I hope you love them as much as I do. And let me just say that I think one of my favorite conversations of all of the episodes I've done so far is right here in a section where he talks about the accidental success story of shake shack. Enjoy every ounce of these clips from Danny Meyer.

Speaker 10: 00:35:28 Literally within moments of being born, we all get the four gifts that that I think we spend the rest of our lives really craving. Think about it a minute. Every transaction

Danny Meyer: 00:35:38 we have after that moment either does or does not measure up to the the genuine sense of being seen. You know, someone was looking at us, someone was smiling at us, so we knew someone was happy to see us. We got a hug, which meant that the exchange of, of that emotional, you know, pleasure was mutual and we actually got some pretty good food. And I think that if you think about every single transaction we have from that moment on, whether you're checking in for a flight or whether you're buying a cup of coffee or whether you're going to the dry cleaner to pick up your clothes, you're either feeling those feelings on the other side or you're not. And if you don't, which I think is more often than not because I think we live in a highly transactional society. You give me money, I give you food, but when you don't get those things, I really think that something goes missing. And so by just naming it and trying to strive for it and trying to to hire the kind of people who naturally would do that, if only they knew that it was valued, I really think you set your business at a big advantage.

Matt Hall: 00:36:48 Yes. On hospitality and now more from Danny on how he decided to go into the restaurant world and the great advice he got from his uncle, my uncle Richard Polski at that time, this is back in the 1980s he was an oral historian teaching at Columbia. He was one of the early writers at children's television workshop for Sesame street and an artist. And he just still to this day has a knack for getting right to the point. And this was the Eve of my taking my LSA Ts. I was a poly sci major at Trinity college in Hartford, Connecticut. And I knew that I was fascinated by issues of the day and that's why I was a poly sci major. And so the thing you're supposed to do at that point is become a lawyer. It's not that I wanted to be a lawyer, I kind of thought maybe I'd go into politics someday, which I'm happy I didn't do.

Danny Meyer: 00:37:45 But anyway, on the eve of taking my LSAT's, I was out for dinner with my uncle and my aunt and my grandmother and I was in a foul mood. Everybody was having a great time and drinking a good chianti. And I had to be a teetotaler that night cause I had a crack of dawn and appointment to take the LSAT and my uncle looks at me and he goes, what's eating you anyway? And I said, well, I got to take my LSA tea. And he said, and this was, I will say, the turning point in my entire professional life, can't say, can't say my personal life, but he said, you know, you're a damn fool. You're going to be dead forever and you're going to be alive relative to forever. You're going to be alive for two minutes. Why in the world would you do something that you don't want to do?

Danny Meyer: 00:38:31 And I said, cause I don't know what else I could do. And he at that moment said, you're crazy. All I've ever heard you talk about your whole life is food and restaurants. He, he shoved it in my face and I still didn't see it because you know, back in the 1980s it just didn't seem like a valid career choice to, to really parlay a liberal arts education into becoming a restaurant. And now today, thankfully it's a highly valued profession for entrepreneurs, but it was that moment I took the LSAT the next morning. I don't even know how I did, but I never applied to any one school. And the Monday following that Saturday LSAT, I applied to the New York restaurant school to take my first restaurant management class. And thank goodness that's just, that was a turning point.

Matt Hall: 00:39:27 Yes, that was a turning point. And now one of my favorite sections, the accidental miracle, that really is Shake Shack. So Shake Shack is very different from some of your other restaurants. Do you want to talk about the inspiration for shake shack and how intentional creating shake shack was versus accidental and how much inspiration maybe you got for shake shack from stuff you experienced in St. Louis as a kid? Hmm. Well I'll start with your second question. There's no question that shake shack is inspired by the days when I, you know, when I turned 16 in St. Louis and you know that marked independence and that mark getting a driver's license and what do you do with your car? You drive to a parking lot so you can see all your pals and the best parking lots in town were usually connected to burger places or famously in st Louis frozen custard milkshakes, that kind of thing.

Danny Meyer: 00:40:21 And when we had the opportunity to say, how do we populate Madison square park, which I had spent a lot of time thinking about from the minute we signed our lease for 11 Madison Park and tabula, we were working with businesses like MetLife and New York life and credit Suisse. We're working with the New York city department of parks and recreations to see how do we restore this park. And we created something called the Madison Square park Conservancy raised, it seems like a magic number, $11 million to restore the park. We raised it philanthropically from stakeholders around the park. And didn't I just walk past this park on my way to the studio? Yes. You right here. Yeah. You're very, very close. It looked alive like it was happening. Proud of the contributions that, uh, that, that park has made to New York city is anything but it wasn't like that back in those.

Danny Meyer: 00:41:16 No, no, no. At best Madison Square Park was a forgettable park that you pass by because you know, Madison Square Garden is what people think about with Madison. People forget that the original Madison Square Garden was on Madison Square Park and took its name from Madison Park. But it was also a dangerous place and we restored it and we made it beautiful and we made it. We made it a place that people want to be and it was always part of the vision that there would be good reasons for people to want to use the park. So before we could do food there, we did art and one of the early artists that we attract into the park was an artist from Thailand whose art was two taxi cabs, excuse me, for taxi cabs on stilts and he wanted to have a working hotdog cart, go with it.

Danny Meyer: 00:42:06 And they asked if we would supply the hotdogs and the staff for the hot dog cart. And I said, yeah, we can do that. Up in our private dining room at 11 Madison Park. My team looked at me like I was crazy. It's like we're too busy to be doing this. Why are you doing it? Well part of it was cause I, I was getting tired of people saying that hospitality is only for fancy restaurants and I wanted to prove that you could actually use a hotdog cart to express hospitality by remembering everybody's favorite toppings. And the other part was, I love Chicago style hot dogs and I couldn't find one in New York. And I said, this is perfect. There's eight classic toppings on a Chicago hotdog. We can train our team to remember everybody's favorite. You know, everybody's says I want everything except the fill in the blank.

Danny Meyer: 00:42:55 I hate neon relish or I hate peppers or I want to ketchup and not mustard. And low and behold, we did this hotdog card to go with a piece of art and the, the hotdog cart became even more famous than the art. And in that summer of 2001 which was right before 9/11 we were having lines of, you know, a hundred people at lunchtime to get one of these hotdogs. And I was putting my theory of enlightened hospitality to the test. We hired out of season coat checkers from our restaurants to give them some work. We remembered our guests. We were doing business with farmers from the green market. In fact, one of them guy who made our pickles, Rick's picks to this day does the pickles for all of the shake shacks in the world and there's over 250 of them right now so that that guy has grown pretty well and we said, and let's take care of our community.

Danny Meyer: 00:43:50 We're going to give all of our profits to Madison square park, which was really easy because we lost a ton of money that year. But here's the thing. The next summer the community said, please bring back the hot dog cart. We did. Even though the art was gone third summer, they said, please bring back the hot dog cart. We did it and in the fourth summer we converted the hotdog cart into a permanent kiosk and I had just read this great book called The Cathedral Within by Billy Shore and Billy's the founder of Share Our Strength, which is a fantastic organization. I've been on their board for some time that is really doing as much as any organization to alleviate childhood hunger in America, share our strength, but his book, The Cathedral Within poses that within each one of us is a desire to do something bigger than anything we may ever live to see. The great cathedral builders would never see their cathedral built, but they did it. They, you know, they went to work every day for this higher purpose and the book brought with it this notion that I had never heard about called community wealth as an alternative to a philanthropy and B, just capital straight capitalism. And it was basically how can you put capitalism to work for the purpose of building community wealth with the understanding that philanthropic budgets are going to have to be cut at some point, government budgets are going to have to be cut at some point, but if you could use the capitalist system to do things that are good for the community anyway, that could be a perpetuating thing that could actually spiral out. And so I'd read the book and that's what gave me the idea to go to my mother and a couple of the businesses around the park and say, together, let's gift this kiosk to the park philanthropically.

Danny Meyer: 00:45:47 We will own the business, but we're going to gift the building to the park so the park will become the landlord and own the building. And if it works, it will make the park safer because people will use the park morning, noon, and night. It'll create life. It'll give people a reason to want to come visit the park. And I think most importantly, it will create a sustainable rent flow so that every time someone does use it, the park will actually find that their budget is enlarge. And wouldn't that be a great thing? No idea that it would become a big business, a public company, and certainly no idea that all these years later, the income that Madison square park generates from that one kiosk she called Shake Shack is just shy of $1 million a year that goes right back into the park. So it's a great story in it and it's a great story because it shows that when you pursue the things that matter the most to you for the longterm, that's sometimes when success ensues. We were never pursuing success. We were pursuing the purpose of that park.

Matt Hall: 00:46:57 And here comes Danny Meyer again on leadership, constant gentle pressure. One of the things I love that you say is constant, gentle pressure, constant, gentle.

Danny Meyer: You're still thinking about your massage right now? Um, no, I, the constant gentle pressure is something that somebody used to describe what they had heard about our leadership style. And I think that's true. I think that you've got, as a leader, you've got to be consistent and constant and continuous in the pressure to continue to improve. But I also think that if it's just constant pressure, someone's gonna say, okay, I'm going to work somewhere else. If it's constantly gentle, they're probably not going to improve so much. And if it's gentle pressure but not constant, it's probably not going to be seen through to the finish and I, so I guess those three words together I think can generally lead to a results oriented place that feels good to go to work at. And I really liked fielding a team of people that hold each other to high standards. I think management is about holding people to compliance and I think leadership is about taking people to a better place. And so I think what constant gentle pressure does is it's a nice blending of compliance leading to a better place in a way that that feels good for the team.

Matt Hall: 00:48:40 All right, from interviewing Danny Meyer in New York city to going to visit Sid and Ann Mashburn in Atlanta, Georgia. I love this couple and I will share with you a nugget of information as of today, this is the most downloaded episode I know you'll love the choices I've made from the Sid and Ann Mashburn discussion.

Sid Mashburn: 00:49:01 And I learned a lot about watching people in the wild, you know, cause you spend time with them talking about clothes and their life and what's the context in the warping wolf of their life and talking to them through the curtain while they're in the dressing room. I mean, it's a, I loved it. I loved it, loved it, loved it because it was an opportunity to connect with people and they were looking for some advice and some help. So you became a confidant of theirs. Even though I'm 15 years old, they're like, well, what do you think about these pants? Oh man. I'm like, no, but try these. And they're like, Oh yeah, those are good. And so it just was a great entree into being a little more grown up and understanding people's needs.

Ann Mashburn: 00:49:48 yes, Sid. And now Ann talks about her position working alongside and a wind tour and other big names in the fashion world.

Ann Mashburn: 00:49:59 She wasn't as powerful position, but the editor I worked for, if in the movie she very much resembles actually in the way she looks, Meryl Streep even more than Anna Wintour. She was had this, she was 62 had this gray hair and you just were humiliated on a daily basis. Basically you were the least important person in the room, but the most important person in the room, everything was riding on how you organize the day. She would just throw things at you that you had to do and you had no idea how to do them and you would just had to figure it out. And everybody kind of looked at you with this little smirk on their face and would think to themselves, I wonder how long she's going to last that, you know, little girl from the Midwest who doesn't know anything. So it was, it was great. And I learned so much in the intro. You talked about, I worked with really amazing photographers I worked with great. You know, I did all sorts of cover shoots with Brooke shields, Isabella Rossellini. Um, I was on Cindy Crawford's first Vogue photo shoot and you just, I knew I was in the right place at the right time and I absorbed, I mean, I think I learned 15 years worth of lessons in the 18 months that I worked there because I just kept my eyes open and got it done.

Matt Hall: 00:51:11 All right. And here's more from Ann on opening up a whole new division of their company.

Ann Mashburn: 00:51:18 Well, I did not want to, but my, this landlord that we talked about, uh, Michael Phillips, who's a really has exceptional taste and is a great visionary and a great seller, kind of sold me on it. That was a small shop that was two doors down from SIDS that was going vacant. And he pushed me and said, you're great. You could make it great. I think it would be fantastic. And then my girls pushed me because they knew how much they said, mom, you do so much work, dad gets all the attention. So I think it was the fact that I had five daughters and, and we did have a family business. I mean, as I've said many times I didn't really want it, but once I had it, I thought, okay, if this is a family business, and on a really good day, I looked at it in a very wonderful romantic way that, you know, we would go visit all the factories in Europe and they had these re there's tradition of family owned clothing, businesses and factories that it was a really beautiful thing to see. So I knew that the girls were only vaguely interested in men's clothes. And I thought, you know what, I'm gonna let's, let's, let's have a female side of it. So we set it up really safely. That I got, I had a bump out in a year if it didn't work. And it worked really well. So we kept on,

Ann Mashburn: 00:52:30 you know, if I could add one thing, one thing that I loved about the way and thought of it, to me, the glass is never half full even it's brimming, you know, with opportunity. And so it was rare that I've said, and this is, this is going to be difficult too. You're going to lose a piece of your life. It's going to be very hard work. You're going to, you know, just lose some of your, what little free time you have in the town with the girls, you're going to lose a little bit. And you know what, taking care of customers is a full time. You know, hospitality is a full time job. It's going to be hard. And she said something you know about, you know what? I want the girls to see that when an opportunity presents itself that you don't just sit on the bench, that you go ahead and jump in where an opportunity is, is available. And I loved that and it really kind of, I think kind of expresses a little bit of her mentality also is like, yes I can do this and I'm going to jump right in and do it. And so, um, it was a good example to our girls also to go ahead and seize the day

Matt Hall: 00:53:36 and here's Sid on working with your spouse.

Sid Mashburn: 00:53:41 You, you had to remember that this is my wife and my life really not just a business partner. So the pillow talk's pretty powerful. And so having our desk 47 and a half inches apart, sometimes too close and sometimes too far.

Ann Mashburn: 00:54:01 Yes.

Sid Mashburn: 00:54:03 And on what they're really trafficking in confidence. When I was a little kid, I hope other people have this same experience, but I went shopping with my mom and we got some new shoes. You know, you have that feeling like you could run faster and jump higher. Hope for sure and still do. Yeah. Right. Exactly. Exactly. Well I think as I translate that for myself, it's like one of the great things that what you do can do for others is build confidence. And I want to know, do you think that that's really the game you're in?

Sid Mashburn: 00:54:37 We traffic in confidence. I mean that's, that's the uh, return on the investment that the, that the customer's really looking for. You know, cause close you can, you can feel good or feel cooler, feel sexy or, or feel, uh, many ways in close. But ultimately you want a person to feel like their boat is lit, is lifted a little bit. And so that's what we also want to do is when someone crosses our threshold, whether they're coming to buy something or look or get a drink or get a coffee or whatever, we want them to feel lifted up and that's it. We feel like if we do a great job of lifting people up, then the business will take care of itself because we feel like we've got enough of a great product offering that we can, that that's almost the easy part is really, it's like how do we react and take care of someone?

Ann Mashburn: 00:55:31 I think that's also why we're a little bit different. I think you can get anything, you know, online and [inaudible]. But I think we do a great job of educating people about, you know, what's appropriate, why, how they should take care of their clothes, how they should, why they might feel better in this and not that. And I, I've just in terms of confidence, I've told this story a couple of times, but when the biggest impression that my time at Vogue had on me was that I worked with, you know, my editor was 62. The majority of the editors there were in their forties and 50s. And um, some in 60s. And they were really attractive women, but they weren't supermodels. They were though the supermodels that I actually did work with were insecure. And you know, when I looked at the two of them, I thought, well, I want to be those older women with a lot of confidence.

Speaker 8: 00:56:18 And they had that confidence cause they knew about clothes. They didn't have to spend a lot of time thinking it. They delighted and really beautiful fashion. But for the most part, they just knew themselves and they had so much confidence getting dressed every day and it was fun for them, but probably a small part of their day. The real part of their day was working and, and you know, making something happen. So kind of as a, you know, someone who thought of myself as a feminist, I thought this is a, you know, this is who I want to be. I want to think less about what I wear, but I know how important it is. And so I try to give that to the, um, you know, all of our customers, but I have a better handle on women and really teach them how to do that. Because once you get that checked off your list, you just can do so much more.

Sid Mashburn: 00:57:03 You know what's really cool is, is that Anne writes this blog called, you need this. Our promise in was really nice. This is what she just said informs a lot of this is like how do you just tell people that kind of be comfortable in your own skin and you know, lean into you know, life basically in whatever situation you found yourself in. And it's not as complicated as we can tend to make it and as, as the pressures of life can tend to make it.

Buddy Reisinger: 00:57:32 Wow, amazing stories. I'm buddy Reisinger, a longtime member of the Hill Investment Group team that helps translate Matt's thinking into action for our clients. If you want to learn more about evidence-based investing, moving like Federer or gaining back weeks of your life, head on over to our website hillinvestmentgroup.com and order a complimentary copy of Matt's book, Odds On, or even better, set up a complimentary call or meeting. And we look forward to hearing your story.

Matt Hall: 00:58:02 So I hope you've enjoyed this episode. I loved putting it together and it really helped me reflect on what we've done over these first many episodes. I've met fantastic people. I've enjoyed hearing their stories and learning from them and I hope you have to. Ultimately, my secret mission has been to help build deeply philosophical and patient investors, but along the way I've learned that helping people embrace those ideas and the things that I care about can come in a lot of different flavors and styles and I have gotten an absolute kick out of traveling and meeting phenomenal people who inevitably want to know more about what we do and how we work and how we think the way we think. But I've also met some people who don't love the style we're sharing with you. They want more practical advice. They want to know how to do a Roth conversion and that'll never be the thing that we talk about here. There are lots of other books and podcasts who talk about practical financial tips and they're all important and I have lots of people who do them, but I want to share with you a way to think, a way to think that puts the odds on your side. And I feel like we're just getting warmed up. We've got a great list of potential people for the next season and we'll take a break for Thanksgiving and the holidays and we'll be back with you and keep trying to help you take a longer view. Thanks so much. Who could I interview? What would be your favorite guest?

Matt Hall: 00:59:46 Please note the information shared in this podcast is not intended as advice. The intent is to share meaningful experiences. I am likely not your advisor nor wealth manager nor financial planner, and my opinions are my own and not necessarily shared by Hill Investment Group investing involves risk. Consult a professional before implementing an investment strategy. Thank you.