In short, John D. Spooner has been carefully crafted a series of essential life lessons that every young person just out of college or high school needs to read before they embark upon their own life's adventures.
Told in friendly and reassuring tones, Spooner relates wonderful stories to illustrate and gently guide the next generation of what they can expect when searching for a job, how to know if you've found the right spouse, insights on how to plan for one's financial future, how the internet has changed our lives, dealing with adversity in life, and much, more more.
No One Ever Told Us That condenses all of this key information into one volume - and it's presented in a clear-eyed way that only a loving grandparent can.
For decades, John D. Spooner has been one of America's leading financial advisors. Now, as his own grandchildren are on the frightening cusp of adulthood, Spooner has chosen to impart his wisdom to them and to readers everywhere in the form of old-fashioned letters.
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No One Ever Told Us ThatMoney and Life Letters to My Grandchildren
By Spooner, John D.
Business PlusCopyright © 2012 Spooner, John D.
All right reserved.
Dear Alyssa and Wesley:
This will be the first of, I hope, many letters to you in college. But I have to tell you up front that you don’t have to save them. I won’t be hurt or offended if you throw them out, but I’ll also tell you that, years from now, you’ll be sorry you tossed them in the trash. There is a somewhat dispassionate and bemused feeling that grandparents have about grandchildren. We do not have to raise you the way we did our own kids. We have no axe to grind. Therefore, in my opinion, grandparents can give advice that often parents are afraid of giving, for fear you may interpret it the wrong way.
This grandfather has no fear. I have worked for fifty years and kept my eyes and ears wide open. But you should understand early on that I believe in the absurdity of life and have been looking for practical solutions to problems in business and with money and personal relationships all that time. I hope to pass on these observations to make your lives both richer and even amusing. Amusing means a lot. And you can take that to the bank. Just make sure you take it to a bank that is solvent.
Today’s ramble is about getting jobs, once you are out in life. It’s the first of many things I’ll share with you that I’ve had to learn the hard way.
Several years ago I spoke to a group of international graduate students at Brandeis University. They were all anxious about what was next in their lives, and I talked with them about searching for jobs. I told them that I see dozens of young people each year who want to come into the financial world and are desperate for words to put them on the right path. First thing I tell them is “Never call a busy person first thing on Monday morning.” Busy people are getting into their business routines for the week and the last person they want to hear from when they begin that week is you, because you represent a freebie, someone who is nonproductive for them, wasting their time no matter how worthy you are. And you, all eager to get on with life, are just going to annoy them if you call first thing Monday morning. Call Tuesday afternoon, after lunch.
By then busy people are more accepting of these calls because they are into the rhythm of the week and over the often-unsettling fact of Monday mornings. My friend Peter Solomon, former chairman of now defunct Lehman Brothers, told me, after I mentioned this advice, “You know, when I was in the midst of any big deal, I would never call any of the key players until Tuesday. If I called them Monday morning, they would think something was wrong.”
You think your “Papa” only pays attention to you. But I also see hundreds of résumés a year, from people of all ages wanting jobs, wanting advice about jobs. Almost all of the résumés are pretty plain vanilla: education, work history. Boring. And the vast percentage of résumés sent out blind automatically get tossed into the circular file—the wastebasket. What will get you the job is something you may think trivial but that jumps out at the person scanning the résumé, something that possibly has nothing to do with educational record or job history. “Is there anything special about you?” I ask them. “Any sports history in school? Any hobby out of the ordinary, anything you collect or in which you have an unusual interest?”
“Well,” a recent young interviewee said to me, “I rowed crew in college, on a championship team, but it was the past. I didn’t think it was relevant.”
“Don’t you know that there are clubs in life?” I said to her. “Secret places in the heart that others around the world will respond to instantly? Why? Because those others were members of those secret clubs as well.” Crew is one of these clubs. So are rugby and lacrosse and sailing and wrestling. So are field hockey and swim team and women’s ice hockey and basketball and school radio stations and Gilbert and Sullivan performances. And amateur rock or heavy metal bands. Put these kinds of things on your résumés, personal things that jump out at the reader. The unexpected passions from the past are what will get you jobs much more readily than academic achievement. Never lie about these hobbies or interests, but trumpet them vigorously. Aside from getting you jobs, they have made your lives inevitably more interesting and will continue to do so. You may say, “Give us an example.” So I will.
A young man based in Japan for several years called me, desperately wanting to relocate with his young family back to the United States. But his fluency in Japanese, he told me, put him in a box where people needed him more over there than in America. His résumé looked fine, but had absolutely no life to it; a grey corporate past. I asked him if he pursued any hobbies. There were none listed on his CV. “I’m a black belt in karate,” he responded. I got him to add this to his résumé. Within weeks he had a strong response and several job offers to relocate to New York and Boston. The offers came from CEOs who, during interviews with him, spent the bulk of the sessions asking about the dedication and discipline it took to become a black belt. The unusual aspects of your life can not only enhance and enrich your experience, they can open doors and keep them open.
One of the kids in the audience at Brandeis raised his hand and said, “Thank you. No one ever told us that.”
In your case, Wesley, you worked on a cod fishing boat in high school; mention that in your résumé. And your strong interest in old coins, and yes, lacrosse. Sounds odd, but it will intrigue others.
Alyssa, your early interest in teaching young people, as if you had a calling for it—I’ve always thought that was so appealing. This sensitivity and caring for others is something that smart interviewers will warm to.
My letters to you, I hope, will not be long on clichés. I want to keep you wide awake, not nodding off.
Your loving and ever-curious Papa
The unusual aspects of your lives can open doors.
The Importance of the Past
I’m going to be jumping around a lot, just to let you know—no theme, no overall plot. Why? Because life is random, accidental in so many ways.
Someone told me years ago that the best compliment you could pay to anyone was “You’re never boring.” Even though I couldn’t verbalize this as a kid, my grandfather (your great-great-grandfather) was an early model for me in this regard. I’ve told you some stories about him, but never anything about his business and money advice. Here’s some of that.
Your great-great-grandfather was a tough little guy, about five feet five, but with broad shoulders, a big chest, and big hands like a baseball catcher, which he was in his youth. You’ve seen two pictures of him in my study. One is with his semiprofessional ball team, the Hemlocks, in 1907 on Boston Common.
The other photo from a few years later is of him in an amateur opera production of Pagliacci, dressed in a clown costume, the tenor and star. This was in the North End of Boston, then and now the Italian section of Boston. He could not speak English when he came to America. His parents and their four children lived in a North End tenement apartment with two bedrooms and one bathtub. The tub they filled with coal to use for their winter heat. Your great-great-grandfather’s goal was to become American as quickly as possible. The same was true for his friends. Partly this was so important because he remembered soldiers of the Russian czar, the Cossacks, riding through his village in Poland, killing, looting, sticking bayonets into straw in the barns, hoping people were hiding there.
In Boston, he boxed professionally in his late teens under the name “Kid Manning” because, he told me, “No one was ever going to attack me or my family without me defending them.” For a long time he thought men with bayonets would storm into their apartment in Boston. He had dreams about it. Why tell you about all this? Because I want you two to realize that I didn’t make any of this up. These stories are in your blood. And so you will understand early that the most incredible things in life are not plucked from novels. They’re true.
Another reason for stories from the past, particularly stories of hardship overcome, is the climate you’re going to find when you both graduate. I have never seen, in all the bumps in my life, a climate in American society like the one we entered into about three years ago when stock markets and the economy began to melt down. Your generation will be facing tougher sledding than any generation has since the 1930s. Many people are either ignorant of the changes around us or lost in denial. But I’ll talk a lot about what I think you can expect when you’re both launched into this new order, after school. Don’t despair, however. For curious, imaginative people, there will be great opportunities.
This week’s note is a quickie, a teaser if you will. Not an excuse for brevity, but your Papa, believe it or not, has a busy week ahead, beyond writing to you.
Yours in haste,
Stay in touch with your past.
What I Learned from the Military
Wesley and Alyssa:
Believe it or not, before Vietnam began, in the late 1950s and early 1960s, there was a military draft on in America. This meant that if you were a young man, you had to serve in the armed forces, unless you were either physically unfit (such as having a heart murmur) or psychologically unfit (subject to interpretation).
Most of my friends and I opted to enlist in the Reserves—Army, Air Force, or Marine Corps. This meant for me serving for six months of active duty in the army, followed by five and a half years of Reserve training, one night a week, one weekend a month, and two weeks at different bases in the summer. If I had it to do over, I would have just served full time for two years and gotten it finished. I enjoyed the entire first six months and hated the Reserve training later. Active duty was an education. The Reserves were for the “weekend warriors” and almost, in my view, a complete waste of time.
In my summer training, I was made unit historian. This, I quickly learned, allowed me to wander at will with a clipboard, taking notes. It also allowed me to leave Camp Drum, in upstate New York, in uniform. Off base I could head to a nearby lake and work on a novel for two or three hours. The novel was about the Army Reserve (Three Cheers for War in General, the title an ironic quote from Mussolini). It was really M*A*S*H during peacetime.
Two silly but useful things I learned from my army experience that you can transfer into life outside the military:
Always look as though you know exactly where you’re going, even if you don’t. Walk purposefully, focused on the horizon, and no one will ever stop you to order you on to work details. This will be true on all of your jobs.
It helps a lot if you carry a clipboard. People will think you’re official. This will work in your job as well. Carrying a tablet won’t help you; the boss will think you’re surfing the Net or exploring things non-job-related. A clipboard means business to others.
The cosmic lessons were many. Basic infantry training invariably collected men from everywhere in America. They were rich, dirt poor, and in between, every color of the rainbow. We lived cheek by jowl, in stacked bunk beds. Reveille: “You gotta get up, you gotta get up, you gotta get up this morning,” went the old Irving Berlin song. And we did. At 5:30 a.m., lined up on the company street, half asleep, knowing we had to shape up. Because if we didn’t, everyone in the unit would suffer.
So we pulled together, Puerto Ricans from San Juan, who slept with their bayonets under their pillows, because they were told the gringos would attack them in their sleep. We had an East Boston contingent, all Italian, wising off on the bus to Fort Dix, joking together, the coolest of cool. Later many of them cried and fainted in the shot line. They had never had inoculations. This was amazing to me, the young innocent from the suburbs. Amazing that these East Boston guys, street smart, so on top of it going to basic training, could have fears and anxieties just like me.
But we all learned to adapt, to trust and learn from one another. I also discovered that there was a class of people I never knew existed, a special cadre of people called “sergeants.” I learned that the sergeants ran the army and, more than any other rank, commanded respect from the troops. They commanded fear, too, because we wanted to please them. And they commanded love as well.
I also learned that human beings are incredibly resilient and can adapt to almost any condition. Grandchildren, it’s good to be tested. And the testing—someone viewing us, passing judgment—will never stop. You will build up scar tissue from the bumps life gives you, and the tough testing helps.
This letter, I think, wants to begin talking to you about service, and I suppose it’s advice you can pass on to younger friends who have to deal with the increasing burden of student loans. College costs are obscene, way out of proportion to inflation and, in my opinion, way out of proportion to what so many colleges offer to you. Definitely not value added.
Service to your country, in many areas, carries scholarship and credit benefits in exchange for your time and effort.
This service is not just military. It can be the Peace Corps; it can be City Year in Boston. I just heard from one of my business partners that her niece, in dental school, will get credit toward her tuition for work on an Indian reservation.
Service can help pay for education. Service can get you out into the world without crushing debt that you have to pay off for years.
But it can also send you into full-time employment with an appreciation for people up and down the scales of society. If you have a better sense of our diverse population it will make you appreciate the bounties you both have been blessed with. And this understanding will make you both much smarter.
Your Papa, who learns the darndest things from all kinds of people
Never close your minds.
Dare to Be Different
Wesley and Alyssa:
One of the sad aspects of modern life is the pitifully short attention span of most young people: too many distractions, too much competition for the ears and eyes. Most of my letters to you will be fairly brief, although I would never place either of you in the “most young people” category. You both, of course, are superior in every way. At least until I ask your parents about you. Technology is second nature to you both, but will always be somewhat a mystery to me. But revolutions come and go. The buzzwords and the characters change in history, creativity and revolutions happen: the Industrial Revolution, the automobile, radio, television, the Internet.
But remember this as a number-one key to understanding business and life: Human nature never changes. Think about kids from your childhoods who were little princesses, nerds, jocks, snobs, bullies. Try to imagine them as adults, or maybe you know what happened to them. Focusing on those childhood people will make you shake your head and realize that not much changes in character from playground days. This can help you a lot in business, if you ask fellow workers about their childhoods. Stories will come flooding out that can help you evaluate your futures.
Human nature never changes. This thought almost totally governs stock market behavior, and it comes to me with the perspective of watching markets and people’s behavior for over fifty years. I have had a handful of clients during that time who have always, because of emotions, made exactly the wrong moves, time and time again.
These people sold after every true panic I have seen: after President John F. Kennedy’s assassination; after the huge market crash of 1987; after the 9/11 attacks. After every panic, markets eventually moved to all-time highs. They bought in the electronics boom at the end of the 1960s, bought tax shelters in the 1980s, bought Internet stocks at the top in 2001. The greed bubbles destroyed stock valuations in those sectors.
If, and for some people it’s a big if, you believe in the future of America, then believe that when headlines scream, “Fear!” you should be looking to nibble at real estate, stocks, paintings, and collectibles. When you feel it in your gut that you should be very afraid, the world around you will scream, “Nothing will ever be good again.” Dare to go against the grain; dare to buy a first apartment or house; buy a drawing by a young artist you admire; buy a stock to believe in for the long haul. Be a contrarian.
You both are lucky in many ways, including that you both have been to France. I first visited there when I graduated from college and traveled with two friends with whom I had acted in school musicals. We sang for meals and lodging and drinks, never paying more than two dollars apiece for a room, in the days when the American dollar was king and queen. (Excuse the ramblings, but our family has always loved stories. Sometimes I even ask your grandmother when we shut the lights, “Tell me a story.” Sometimes she does. Childish, right? You should always keep hints of childhood in your life, I think.)
Back to France. Other than the kings and queens whom you’ve studied (I hope), probably the wealthiest family, perhaps for several hundred years, has been the Rothschilds. One of the early counts of the family, when asked by a young man for the secret to making money on the Bourse (the French stock market), supposedly said, “When the streets of Paris are running with blood, I buy.” Be a contrarian. Bet against the crowd. You will thrive when others look back and grind their teeth. Never be afraid to be different.
Your different (if diffident) Papa
Human nature never changes.
Good Accidents in Life
Alyssa and Wes:
Greetings to the college kids. I often wish I were back there as well.
This letter is about accidents in life. I have a client who chairs a foundation in New York. It’s an almost $700 million foundation. I mention the number because I think big numbers are amorphous. What do they mean? There are more than a billion people in China, more than 300 million in the United States. These numbers are so large as to render them squishy. I actually don’t like or trust numbers too much. I was so bad in math, I was allowed to skip second-year algebra in high school and take art instead. When I went into the world of finance my friends laughed. I did get a D in first-year algebra and a C in geometry, so I had serious doubts myself. All I wanted to do was write.
But, as you know, my dad was a partner in an old investment firm. We were good little boys and girls in the days just before Vietnam heated up. We feared going to the headmaster’s office and, if you can believe it, we really feared our fathers. Back then, fathers as a class did not care to be our best buddies or live to glorify their children. They lived to rule their households. Mostly with an iron hand. My father would actually say to me when I was little and had misbehaved, “Get me my strap.” Not only was I going to get spanked, I had to fetch the damn instrument. I now think it’s funny, and I never had to get “help” with the concept in later years. But as your father probably told you, I never hit my own children. Psychological warfare was enough (only kidding).
My father announced to me when I graduated from college, “You’re coming into the investment business.” “But, Dad,” I said, “I can’t even read the stock page in the newspaper. I have zero interest in the market. I want to be a writer.” He threw me a challenge. “You’re coming into this business. But if you want to write badly enough, you’ll find the time.” I was determined to find the time. I was determined to write my way to freedom, and when—not if—my first book was published, I’d be out the door. Remember this lesson I will repeat as the “accidental nature of life.” By the time I finished my first novel and sold it to a publisher, it took three years. And during that time, I made an incredible discovery: the stock market was all about human nature, not math. Fear and greed. The only thing I thought I knew about in those days was character. I had, totally by accident, found the perfect business for me. So have an open mind for the possibility of accidents happening.
As a bonus in this letter, I will try to ask a question you will probably raise with each other: “What about family businesses? Good idea or bad?” In watching people’s money over all these years, I’ll tell you that family can be a killer. When I was under my dad’s thumb early in my career, it was bad—me as the idiot child. As time went on, Dad got older, I gained more confidence, and I was becoming the father. This was worse than the early days. My advice is to go make your own path in life, avoid the baggage, the politics, the infighting of family affairs. And if you come back in triumph, family will still be a killer. You deserve honesty from me.
Your loving grandfather
Know your characters.
There Are Many Ways to the Truth
My father gave me some bad advice while I was growing up, and he gave me some good advice as well. The bad advice had to do with foolish myths. Like when he told me, “Before you marry, look at the mother of the woman you presumably love. If you cannot stand her mother, think long and hard about the daughter. Most women eventually turn into their mother.”
The good advice that I took to heart included “Never expect anyone else to do anything for you. Expect to do it yourself.” Remembering this lesson, I have never dwelled on being disappointed with what others didn’t do for me. It will be important for both of you to do this as well, not as a cynical response to events in your life, but as a realistic (if sad) reaction to the way things work. When and if you do get unexpected boosts in life from others, put it in the category of nice surprises and still be prepared to fend for yourselves.
On with this week’s lesson in self-reliance. How are you going to build up your own net worth? Here’s key advice from someone I was thrown in with by accident, someone whose early words to me gave me the base so that if I never go into an office again, your grandmother (your Mimi) and I can live the good life for the rest of our years.
My first investment firm went broke in the early 1970s. Literally hundreds of well-known companies closed down because they could not handle the volume of business that was building; they could not handle 20-million-share days, in this time before computers. Today, daily volume on the New York Stock Exchange often trades more than a billion shares. If you ordered 100 shares of IBM in the 1970s, you might be delivered a certificate for 1,000 shares of Ford Motor. If you expected a check for $600, you might get one for $6,000. Chaos. No controls. My company went bankrupt and merged with a new firm founded by four young Wall Street upstarts, rookies really, with little experience but with brains and guts.
One of the four partners was a college classmate of mine. He took me to lunch in Boston, trying to convince me not to defect to a competing firm. I listened and made the comment to him that the stock market was so low he could probably buy shares in the many companies that looked cheap to me. He had a wolflike smile and turned it on. “I’m actually leaving the firm myself,” he said. “Why buy cheap stocks when you can go out and buy the companies themselves?” That was my first lesson in looking at changing conditions in business in different ways. The conventional boring way was to buy cheap stocks. The creative, entrepreneurial approach was to go out and try to buy the companies themselves. There are many ways to the truth.
The next letter will get back to getting half-baked rich in the stock market, the concept I hinted at earlier. I don’t want to test your attention span. And I do get carried away. Not a good habit.
Your loquacious Papa
P.S. I know, I know—you know vocabulary. But it’s actually good if you ever have to look up (or search) for the meaning of new words.
One size doesn’t fit all.
It’s the Emotions
Wesley and Alyssa:
This might be the most important lesson I could give you about investing. There have been thousands of books on this subject. But very few concentrate on what I think is the single biggest lesson to learn when investing your money in anything, but particularly in common stocks, because they are the most liquid of anything you hope to buy and sell for profit. Liquid means they are easy to buy and sell. In today, out tomorrow, if you wish.
Most of the thousands of books on the subject have been written by onlookers. Or economists. Or by ghostwriters for business CEOs. Almost none have been written by people who actually walk the walk, who invest their own and other people’s money. I’ve been doing it for more than fifty years, for thousands of people, old and young, men and women, Americans and foreigners as well.
My first office manager, a great student of human nature, used to tell me that “the investment game is an Alice in Wonderland business. The money is real. But, because you can see the prices of your holdings day by day, minute by minute, people will be influenced always by the emotions of those minutes, particularly by fear and greed.” This is probably the single best lesson I’ve ever received in the investment world. Followed closely by “If you want to truly get rich… concentrate, don’t diversify.”
Here’s a little story about the fear side of the equation. Nine-eleven was a horrific day in American history. It shocked America to its core. My office staff, in my building before I arrived, would not let me come up in the elevator from the lobby, because they were sure our office would be attacked. Several people were hysterical. Then our building was closed and we all went home. That night a client called, a man who was sure the end of the world was upon us. “Sell everything,” he yelled into the phone.
I pointed out to him that the markets were closed until the threat to America was somewhat understood and addressed. Markets closed precisely because no one in charge wanted panic selling to overwhelm them. This had happened in the past in dangerous times, like after President Kennedy’s assassination. Often the best advice during tragedies like these is to take a step back and coolly consider the options.
Excerpted from No One Ever Told Us That by Spooner, John D. Copyright © 2012 by Spooner, John D.. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
1 Getting Jobs 5
2 The Importance of the Past 10
3 What I Learned from the Military 13
4 Dare to Be Different 18
5 Good Accidents in Life 22
6 There are Many Ways to the Truth 25
7 It's the Emotions 28
8 Getting Rich in the Stock Market: Concentration 33
9 Getting In and Out of Debt 37
10 Rules for If You Marry 42
11 Believe in and Understand Cycles 45
12 All Life is Relationships 48
13 The Value of Stories and Bumps in the Road 51
14 Building Your Team: Your Lawyer 54
15 The Value of Personal Notes 57
16 Jumping on Problems 61
17 Picking a Financial Advisor 63
18 Be Out There in Life 66
19 The New Darwinian World 70
20 Collectibles 74
21 Accountants 78
22 Real Estate 80
23 Insurance 85
24 Lessons in Selling Stock 88
25 Asking the Unusual Questions 92
26 News, the Media, and the Dangers of "They" 96
27 Letter to Alyssa 98
28 The Eight-Hundred-Pound Gorilla 102
29 Wesley, My Boy 104
30 Wills, Trusts, and Estates-Planning Ahead 108
31 Beware of Genius 113
32 A Business Quickie 119
33 Cycles are Eternal 123
34 Don't Be a Headline Reader 126
35 The Value of Travel 128
36 The Importance of Being Well Dresse 131
37 Losing a Job 135
38 Work in a City 138
39 Bonds are Boring 140
40 There are People You Cannot Save from Themselves 144
41 Have Long-Term Friends of the Opposite Sex 147
42 Negotiations 152
43 Make Yourself Memorable 154
44 Private Investments 157
45 Do Your Due Diligence 161
46 What Hollywood Taught Me 166
47 Almost Nothing Happens the Way You Plan It 172
48 Dealing with Loss: Scar Tissue 175
49 Stay in Touch with Your Past 179
50 Fads in the Stock Market 184
51 Wesley Redux 188
52 Gold and Commodities 196
53 Dealmaking: What's That All About? 200
54 Stand Up for Yourselves 207
55 Heroes and Heroines 210
56 What About the Internet? 218
57 Do What You Say You're Going to Do 222
58 Long-Term Behavior 225
59 Last Snippets to Ponder Before I Forget 228