Matt Hall Mixtape: TLV Greatest Hits (EP.12)

Welcome back, Longview 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 guests to come on the show? Which episode is most popular?

And so on.

I'll tuck a few of these nuggets into our episode. I'm calling this the mixtape, 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 and recording 11 episodes. No, this is not gonna be a top 10 list. There's no order to what I'm gonna share with you. These are just some of my favorite clips. 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 1 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'd never had, like, the real one with the big powerful magnets. And so I had a little bit of anxiety going into this MRI, not because I think I'm claustrophobic, 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 gonna be easy. You can handle it. Keep your eyes closed. No big deal." As I started to go into the tube, I felt my opposite shoulder, not the one we were gonna be taking pictures of, but the other one, sort of graze 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, bring me back out. We gotta do something different." We came back out and she calmly said to me, "Okay, I have some glasses that I think are gonna help you." My instant reaction was, "There are no glasses that are gonna make that tube 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." She put the glasses on me. I started sliding back into the tube. I'll be darned if those glasses did not do the trick. She said they were called prism glasses, and they allowed me to see down, sort of past 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 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 recontextualizes the world around you in a way that allows you to cope and keep going. Does that story connect with you in a way that feels true?

Oh, I think it's a great metaphor because life is how you look at it. And 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.

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.

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 gonna be taking care of me in my dottage. So I want there to be some 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.

Okay, this next clip comes from my man Jared Kaiser, who's one of the smartest people I know. And I love this clip, even though it's gonna 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 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.

So the best categorization of this that I've come up with is to think about there are three categories of investment philosophies that I think are digestible, that actually mean something at this point, 'cause I'm definitely in the camp that says the passive versus active, distinction has gotten a little bit muddled at this point and doesn't mean as much as you would want it to mean. I think of basically traditional market-cap-weighted indexing, which I think of that as like a couch potato approach. I'm going to go out, going to buy total market indexes, maybe US, 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 the basis of everything that we do, that that type of approach has beaten the vast majority of, of active investors and will contin— continue to. 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, uh, approach. And then Category 3 for me is what I think of as 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 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 way? Now, I think people can get confused, understandably. Well, is 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. This point. But that said, it is different from the kind of the total market type of approach.

Okay, from Jared Kaiser 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 loses integrity, and I hope you love this clip and classic story. I think one of the coolest things, and we tell this story a lot about the brewery, is back in the mid-'80s, they made a really brave decision with how they managed 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.

Yeah, this gets us back into the kind of the investment field. When I was the assistant treasurer of Anheuser-Busch and in the treasury group, we did an analysis. The pension committee of Anheuser-Busch said, you know, we want you, somebody to look at our, how we invest our money. We haven't done that well investing money the last, you know, 10, 15 years. Is there a better way to do it? 'Cause what they said was, "We have a consultant that identifies the best money managers for our pension. They can identify the best active fund manager and the best international fund manager. And they've beaten their benchmarks over the last 3 and 5 years. And we give money, in the next couple years they don't do that well and we gotta replace the," consultant says, "We wanna replace this one manager that hasn't done that well. We got somebody better now." And so they kept moving money around but never did that well. We did a study and what they found was that buying just the index funds or buying the benchmarks was better than trying to pay all these high fees for the active managers. And so they fired the consultant, they fired the active managers and went straight to index funds for the pension plan. And then they also changed in the 401k options for the employees. Every one of the, they got rid of all the active funds in their 401k plan and went to all pure index funds except for the, you could still buy Anheuser-Busch Bush stock. So I saw this results of the study and I had been still picking stocks up until then. I thought I could still, you know, study the markets and 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 every time, not all every time, but the high majority of time is won by the index funds. So I sold all my individual stocks and all I did was buy index funds. And so from that point on, I said that I'm not gonna spend all my time doing all this extra work I was doing trying to pick the stocks.

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.

Yeah, and I think in addition to helping you as an investor, it also, I think, frees up a lot of time. 'Cause 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 reading financial magazines, getting Barron's on the weekend and going through that page by page, going to economic forecast lunches given by banks here in St. Louis. I figured I spent 240 hours a year and what I consider kind of wasteful and had no value, wasteful time, which is roughly 6 weeks of my life, 40 hours a week, was really had no value. And so besides getting me, 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 just activities. It's really a game changer as far as time away, saving time, trying to do other things. If you want, you believe this philosophy of getting access to the market in a low-cost way. It saves a lot. And once you, once you believe it, honestly believe it, it saves you time.

All right, Rick, thank you. And now to Dave Butler, who, for those of you who listen 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 love 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. What do you remember from those days?

Well, New York's a great city, a lot of fun. I remember as a young, you know, 20-something kid in New York, but, you know, the main takeaway I think is that I was probably 3 years into the job and just, was not overly excited about what I was doing and not overly excited about what I was seeing in that world. And what I was seeing was— and you and I talked about this a while back— was I'm seeing from an investment perspective, 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 more often than you should? The experience was not a positive one for me. And so I had made the decision about 3 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. I wanted to make an impact on people, and I thought I could do that as a teacher and a coach 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, you know, 2-line ad that said, "Money manager, Santa Monica, California." And as a California kid, I liked the 3 words, Santa Monica, California. So 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 Dimensional 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. 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 tenets, 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 I walked out of that meeting with Merton, and I went back and talked to Dan for a bit. And I talked to David Booth. And I went home that night and pulled out my old finance books and started reading the names like Fama and French and Miller and Scholes and so forth and thought, well, this is something interesting and something different and something special. 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 said that, 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 fiduciaries to clients and so forth. And he described this model that he thought was going to be the model that would be the main model going forward in the business over time. And it turned out that that was the case. And it just 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. Yeah. One, you've never heard of Dimensional.

Never heard of Dimensional.

I mean, who had at the time, right? They weren't seeking public awareness.

Correct, yeah.

And really only at the 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.

That's exactly right. You know, this is sort of where luck in life comes into play too. I had made a decision. I was at home for Christmas break and I was probably 45 minutes to an hour away 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 sort of a retail kind of a job. And I was an institutional salesperson in New York. New York, and I had worked for one of the big investment banks and so on and so forth. And so I thought to myself, I think I'll probably just not go, take a pass on this and call in sick. And I made a decision right before that I said, well, I made a commitment to be there. And something, you know, from the days of your mom and your dad telling you, you know, meet your commitments. And so I had a commitment and I said, I'm going to I'm gonna go. So I went and had that interview that turned out to be the interview with Dan and with Burton Miller. And one of those great lessons in life around giving your word and making a commitment to what you say you're gonna do. And looking back at it, it could be described as luck or it could be described as, these are some of these real simple principles that I think have, that are important for anybody as they live their life. Making a commitment and staying to it. And that turned into quote unquote luck for me.

What a turning point. I mean, just so huge. Well, we're all— I'm glad you kept your word and you went to the interview. Thank you, Dave Butler. And I loved 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 the show's 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.

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 because I talked about them nonstop and how much I liked them. 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 Suze Orman yell at you about your money or Dave Ramsey talking about debt 24/7 with callers. 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 my 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 shows because they're so evergreen. I'm listening to these guys, or people who 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 weren't 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.

Okay, Joe Salcehai. And now another clip from Joe where he talks about a process that he and his wife set up for Sunday nights.

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.

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.

I think we continue to explore what this idea of the science of play really is, because, you know, and I'll say something that we'll never admit 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 you get 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.

Thank you, Joe Saul-Sehy, the man who tapes his podcast in his mom's basement. And on to my friend Cherie Berry, who makes beautiful paper for people across the globe. Cherie 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.

Let me just emphasize that I think it's about sort of that engagement that is behind it. So 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 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 the message that we hope people hear from us.

Yes.

All right. And on to Marilyn Wachter 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.

There's a new term that's being used. You know, we used to talk about helicopter parents who would hover above and fix things. 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 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 4 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.

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.

Okay. So the 4 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 wanna kind of nurture curiosity, patience, thrift, generosity, perseverance, modesty, and perspective.

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 gonna help pay for it," do you think there should be any participation?

Yes. 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 earn 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 gonna 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 what does insurance cost. You know, maybe you give them 1 tank of gas a week, but then if they go through that, it's on their dime. So if they wanna 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 wanna do is reward striving.

Mm-hmm. 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.

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.

As usual, Marilyn 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 longtime member of the Hill Investment Hill Investment Group team that helps translate Matt's thinking into action for our clients. If you'd like help in having the money talk with your kids, no matter what age they are, head over to hillinvestmentgroup.com and set up a complimentary call or meeting, and let's start talking.

Thank you, Marilyn Wachter. And now I went to Greenwich, Connecticut to tape with this 50-something billionaire who really impressed me, David Kabiller. I felt like he had been meditating for about 3 days when we did our interview. He just seemed to be on a different channel. And I love the channel he's on, and I 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. 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 play on center court, and I've never seen someone so comfortable and at ease. I strive for that, that same level of ease in my own life.

Well, you know, it's interesting you say that. You start thinking of playing for the long term. You think about how he's adjusted his life to have longevity, how he moves on the court. It's less physically taxing than Nadal's 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.

And here's more from David Kabiller on getting his job at Goldman Sachs.

So I had 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 2 for the summer job or something. I didn't have any experience. So he asked me, "Is there anything I should know about you?" at the end of the interview. And I said this, and it sounds so cheesy, but it was appropriate for the dynamic because it was a highly empathetic, connected thing. And I said, because it was only 30 minutes, I said, "To know me is to love me." And again, it sounds, I apologize for the clichéness of it, but it's almost embarrassing to say now, but I said it to him seriously. And he was like in his late 40s. And I told my friend this after the interview. And he's like, you're never getting that job. That was like ridiculous to say that. And I ended up getting the job. It was really at Goldman that this whole world of finance 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 at 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.

All right, and another one from David Kabiller as he talks about wooing the legendary Cliff Asness to help start his company. I love his persistence, and I think you will too.

I would spend a year trying to convince Cliff to do this, and he was an immovable object for a while. He was doing quite well, the group was doing quite well, he loved it, it was everything he 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 depressed for this whole weekend. And they're like, "What's wrong?" And I remember saying to them with such this intense passion, I put my finger, I go, 'Cause I was this far away from creating something really special.' And I remember saying that, and I was just so visceral about— I was so bummed out when he said no initially. And I think I saw the empathy. My parents were like, 'Oh.' They didn't know what it was or what it could be. And it was like, 'Oh, okay.' But I still kept at it. And I think I've heard Cliff say this, that when he decided to stay, Sometimes you get that rush that was the right decision. I think Cliff felt it maybe wasn't the right decision. And so I kept at it. And I remember 6 months later, I finally get a call from Cliff at my home in Chicago at the time I was living. And he never called me. The guy would just never, ever call me. And he goes, hey, it's Cliff. And I'm like, what? And he had nothing to say. Like, there was nothing. He couldn't get the words out because he knew with me, he'd be opening up a Pandora's box. Agitating, moving forward and making things happen. And I go, you ready? He goes, yeah. And that's where we— yeah, it was that simple of a conversation.

All right, David Kabiller, we're coming back to you one more time. I love this quote because you pack a lot into a short little ditty.

I think when you combine empathy and intuition, but again, not a psychic intuition, an authentic care of others I think I come at this with a sense of tremendous gratitude. The fact that being an orphan, son of an 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 to recognize any, quote unquote, success has some combination of luck, risk-taking, and skill. And I come with a sense of real gratitude.

Mm-hmm. From Greenwich, Connecticut, to New York City. This was, without question, one of the most fun conversations for me because I've been a fan of Danny Meyer's for a long time, read his book, Setting the Table, and just was tickled by our conversation. Probably had 3 or 4 hours' worth of content we could talk about. We jammed a lot into our time together, and these clips are gonna 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.

Literally within moments of being born, we all get the four gifts that I think we spend the rest of our lives really craving. Think about it for a minute. Every transaction we have after that moment either does or does not measure up to 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 that emotional, you know, pleasure was mutual. And we actually got some pretty good food.

Mm-hmm.

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 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.

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 Polsky, 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 LSATs. I was a poli-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 poli-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. But anyway, on the eve of taking my LSATs, 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 because I had a crack of dawn appointment to take the LSAT. And my uncle looks at me and he goes, "What's eating you anyway?" And I said, "Well, I gotta take my LSAT." And he said, And this was, I will say, the turning point in my entire professional life. Can't say my personal life. But he said, "You know, you're a damn fool. You're gonna be dead forever, and you're gonna be alive relative to forever. You're gonna be alive for 2 minutes. Why in the world would you do something that you don't wanna do?" 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 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 really parlay a liberal arts education into becoming a restaurateur. 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.

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 wanna 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?

Well, I'll start with your second question. There's no question that Shake Shack is inspired by the days when I, you know, I turned 16 in St. Louis and, you know, that marked independence and that marked 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. 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 Tabla, we were working with businesses like MetLife and New York Life and Credit Suisse. We were working with the New York City Department of Parks and Recreation 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 this studio?

Yes, you did.

Right here?

Yeah, you're very, very close.

It looked alive. Like it was—

Oh, I'm—

It's happening.

Proud of the contributions that, uh, that that park has made to New York City as anything.

But it wasn't like that back in those days.

No, no, no. Uh, at best, Madison Square Park was a forgettable park that you passed 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 Square 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 attracted to the park was an artist from Thailand whose art was two taxi cabs— excuse me, four taxi cabs on stilts. And he wanted to have a working hot dog cart go with it. And they asked if we would supply the hot dogs 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 was getting tired of people saying that hospitality is only for fancy restaurants, and I wanted to prove that you could actually actually use a hot dog 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 8 classic toppings on a Chicago hot dog. We can train our team to remember everybody's favorite. You know, everybody says, I want everything except the fill in the blank. I hate neon relish, or I hate sports peppers, I want ketchup and not mustard. And lo and behold, we did this hot dog cart to go with the piece of art. And the hot dog 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, 100 people at lunchtime to get one of these hot dogs. And I was putting my theory of enlightened hospitality to the test. We hired 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, a 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 guy's grown pretty well. And we said, "And let's take care of our community." We were gonna 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 hot dog cart into a permanent kiosk. And I had just read this great book called The Cathedral Within. The Cathedral Within by Billy Shore. 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, posits 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 gonna have to be cut at some point, government budgets are gonna 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. We will own the business, but we're gonna 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 'cause 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 enlarged. 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, which is called Shake Shack, is just shy of $1 million a year that goes right back into the park. So it's a great story. And it's a great story because it shows that when you pursue the things that matter the most to you for the long term, that's sometimes when success ensues. We were never pursuing success. We were pursuing the purpose of that park.

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 pressure.

Sounds like you're still thinking about your massage right now. No, I— the constant gentle pressure is something that somebody used to describe what they had heard about our leadership style.

Matt Hall.

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 going to say, OK, 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 like 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 feels good for the team.

All right, from interviewing Danny Meyer in New York City to going to visit Sidney 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.

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 world. The Warping Wolf of their life and talking to 'em through the curtain while they're in the dressing room. I mean, it's, I loved it. I loved it, loved it, loved it. 'Cause 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 on me? I'm like, no, but try these. And they're like, oh yeah, those are good. And so, It just was a great entrée into being a little more grown up and understanding people's needs.

Yes, Sid. And now Ann talks about her position working alongside Anna Wintour and other big names in the fashion world.

She wasn't in this powerful position, but the editor I worked for, if in the movie, she very much resembles, actually in the way she looks, Meryl Streep. Sweep even more than on a wind tour. 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 organized 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 just had to figure it out. And everybody kind of looked at you with this little smirk look 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 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 COVID shoots with Brooke Shields, Isabella Rossellini. 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.

All right. And here's more from Sid and Ann on opening up a whole new division of their company.

Well, I did not want to, but my— this landlord that we talked about, Michael Phillips, who's a really— has exceptional taste and who is a great visionary and a great seller, kind of sold me on it. There was a small shop that was two doors down from Sid's 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, and Dad gets all the attention." So, I think it was the fact that I had five daughters, 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 this 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, I thought, "You know what? I'm gonna— Let's have a female side of it." So we set it up really safely that I had a bump-out in a year if it didn't work. And it worked really well, so we kept on.

You know, if I could add one thing, one thing that I loved about the way Ann thought of it, to me, the glass is never half full even. It's brimming with opportunity. And so it was— It's rare that I've said, "Anne, this is gonna be difficult. You're gonna lose a piece of your life. It's gonna be very hard work. You're gonna just lose some of your, what little free time you have and the time with the girls, you're gonna lose a little bit. And you know what, taking care of customers is a full-time, hospitality is a full-time job and it's gonna be hard." And she said something 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 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 gonna jump right in and do it." And so it was a good example to our girls also to go ahead and seize the day.

And here's Sid on working with your spouse.

You have 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 47.5 inches apart, sometimes too close and sometimes too far.

Yes, and here are Sid and Ann on what they're really trafficking in: confidence. When I was a little kid, I hope other people had this same experience, but I went shopping with my mom and we got some new shoes. You know, you had that feeling like you could run faster and jump higher?

Oh, for sure.

And—

Still do.

Yeah, right, 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?

We traffic in confidence. I mean, that's the return on the investment that the customer's really looking for. You know, because clothes, you can feel good or feel cool or feel sexy or feel many ways in clothes, but ultimately you want a person to feel like their boat 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— we feel like if we do a great job of lifting people up, then the business will take care of itself because we feel I feel like we've got enough of a great product offering that we can— that that's almost the easy part. It really is like, how do we react and take care of someone?

I think that's also why we're a little bit different. I think you can get anything, you know, online, and— but I think we do a great job of educating people about, you know, what's appropriate, how they should take care of their clothes, how they should— why they might feel better in this and not that. I've just, in terms of confidence, I've told this story a couple 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 40s and 50s, and some in 60s, and they were really attractive women, but they weren't supermodels. They were— 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." And they had that confidence 'cause they knew about clothes. They didn't have to spend a lot of time thinking about it. They delighted in 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 making something happen.

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.

You know what's really cool is, is Anne writes this blog called "You Need This, I Promise." And what's really nice is what she just said informs a lot of this. It's like, how do you just tell people to kind of be comfortable in your own skin and lean into life, basically, in whatever situation you find yourself in? And it's not as complicated as we can tend to make it and as the pressures of life can tend to make it.

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 there, set up a complimentary call or meeting, and we look forward to hearing your story.

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 too. 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 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 should I interview that would be your favorite guest? 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.