Rick Hill: A Boring Way to Get Rich (EP.03)

Welcome to Take the Long View with Matt Hall. This is a podcast to help reframe the way you think about your money, emotions, behavior, and time. The goal? Helping you live richly. We'll talk with the best thought leaders we know to learn from their meaningful experiences. We'll bury the vegetables of world-class thinking in stories and conversation, helping you reframe your perspective so so that you too can put the odds of long-term success on your side. Today I'm joined by Rick Hill. Rick is my business partner and in many ways one of the best people I know on planet Earth. He is wise, kind, funny, and oozes integrity. He's had silver hair since he was 10. Just kidding, since I think he was maybe 40. And Rick Hales, originally from Wilmington, Delaware, came to St. Louis to be in the beer business as a finance executive at the once great Anheuser-Busch. He took an early retirement package in the late '90s and joined an investment firm about a year before I arrived. And then I swept him off his feet and we became lifelong friends and eventually business partners. We're gonna learn a lot about Rick's experiences and his wisdom, and I'm so grateful he's here with me to share some of his journey Gems. Rick, how's it feel to be on a podcast?

Well, it's a little bit different for me. I— you're a pro, you know. I've listened to a few podcasts, but this is my first one being a participant.

Classic Rick Hill humility. I build you up and you bring it back down. That's one of the things I love about you. You know, your claim to fame is— well, with a lot of people who know you— is setting expectations. You have a great story that you always share with people who are getting married, and maybe you could share some of that wisdom with with our audience?

Well, yeah, I think personally people are happier if they set expectations a little bit lower than they really expect. And then the reality is better than what you expect. Whether you go to a movie or anything else, if I go to a fancy movie, for example, and I like it a lot, I'll tell my friends, they ask me, "How did you like it?" I said, "Well, it was pretty good." I won't say it was great because if I said it was great, then they have high expectations. They may like the movie, but they don't have it quite as much, liked as much as I did. So in the case of new couples getting married, my story is this, is that, for example, you always want, when your wife is home with the young kids, for example, after you got married and had a few kids, and you're, you know, you want to get home to see the wife and the kids, and generally you're home by, let's say, 5:30 after work. But occasionally somebody will say, hey, let's go have a drink afterwards. Someone's having a birthday, let's go celebrate it. And you tell your wife, I'm gonna be out a little bit later on Thursday. You know, I'm gonna go out with the guys and have a drink and I'll be home a little bit later. And you expect, okay, I'll go off, I'll leave the office about 5, I'll have a drink about an hour, I can get home in a half hour. And you say, okay, I'll be home at 6:30. And she's saying, okay, that's okay. You're usually home at 5:30, it's only an hour later. I tell people, no, don't ever tell 'em 6:30, add an extra hour, hour and a half. Say you'd be home at 7:30 or 8. And that way, if by chance you drink a little bit longer, they'd have traffic coming home and you get home, let's say at 7:15, And she's so happy you're home before 7:30 or 8:00. And otherwise she'd be very upset if you start at 6:30 and get home at 7:30, 7:15. So always extend the time a little bit, at least an hour, 'cause my experience is things always take longer.

Exactly, I love that advice. Sounds so simple too, but it pains people to add that extra hour because you know the initial reaction is gonna be, "Ooh, that late?" But then you're always golden.

Yeah.

You're almost always gonna be on time. Speaking of on time, let's talk about that for a second. The old Anheuser-Busch story about time and what being on time means. You wanna tell one of those stories?

Yeah, sure. That's one thing you learned at Anheuser-Busch was, you had a lot of meetings, so you never wanted to be on time. You usually were late. The saying to Anheuser-Busch was, "If you're 15 minutes early, you're on time. If you're on time, you're actually late." And a good example of this was one time we were flying the company plane here in St. Louis, and we had like a 7:15 departure from the terminal. It's a small terminal, no activity there other than our plane. And so everybody got there about quarter of 7 to make sure you're on, and you got in the plane around 7 o'clock. And August Bush comes on around 7 o'clock and we say, we got one more person that hadn't quite made it, August. I see him pull up in the parking lot right now. Here he comes, August. August says, he's late, let's go. So the guy starts running toward the airplane, waving his hands. And the pilot says, should I go? August says, keep going. So the guy, I felt sorry, we all kind of just, we all kept very quiet. That guy kind of put his head down and walked back to his car. Wow.

Wow. If you're early, if you're early, you're on time.

That's right. So every, every, I feel that way even now, you know, meeting friends for dinner or something like that. And they say, meet me at 7 o'clock. I'm always there by quarter of 7. And I'm always just the first one at any kind of meeting or any kind of social event.

I love those stories. Okay, well, let's go back in time a little bit. Before we met, you're originally from Delaware. What do you remember from life in Delaware as a kid?

Well, it's a small city. It's a lot like St. Louis as far as it's dominated by big companies. DuPont was the main company in Wilmington, kind of like Anheuser-Busch was when I came to St. Louis. But it's near the Philadelphia and the East Coast, obviously. So it's a lot— my background was going to the beach in New Jersey and the shore and But I left Wilmington, Delaware, you know, after I went to college. And so I didn't really go back there after I turned like 20. But a lot of my friends still live there, but I like going back to visit them. But generally, when I moved to St. Louis with Anheuser-Busch, we pretty much left the East Coast.

But you went to Wake Forest for undergrad. Did you have a good experience there?

Yeah, I did. I liked it. Small college, but it played, you know, big-time sports. And I've always loved sports personally, playing them or watching them. It gave me that interest in watching them play. I liked the school, I liked the people. I definitely was in the South. I didn't realize when I went there how much I was in the South, 'cause everybody kept saying, "Where you from?" And I said, "I'm from Delaware." And they said, "Are you a Yankee?" And I said, "I don't know, am I a Yankee? I guess I am." So I never realized they're still fighting the Civil War down there, and they know whether you're a Yankee or a Southerner. But I learned that quickly. So yeah, but I did enjoy the school though.

And then after Wake Forest, eventually you find your way to Wharton for business school.

Yeah, yeah. I was planning on actually going into the Army, but I was declared 4-F in ROTC after my junior year doing that at summer camp. I had a detached retina in my eyes and that didn't qualify me for service. So I then had to rearrange my plans and I decided to go to graduate school, went to Wharton. Which I enjoyed. It was, I must admit that was a place where I really felt like I had to study hard and really work. And it was a time when I put a lot of effort into getting through that in 2 years.

So you come outta Wharton, you got a fancy MBA from a great school and then what?

Well, when I was getting ready to graduate, the one class I had at Wharton, which I really liked a lot, was an investment class. And it was the one, and back then, of course, this is now back in the mid-'60s. This is where you didn't have iPhones or any technology. And one of the classes we had was try to analyze a company and said, okay, look at the annual report, go to the library, get all the information you can on a company and tell me whether you would buy that stock or sell that stock. And so since my dad worked for DuPont, I said, I think I'll pick DuPont. And I picked DuPont and I did all this analysis and I came back and I said, I wrote a paper about, I think the stock's too high priced. I would sell it. And I went back to my father and I said, Dad, I think you ought to get rid of all your DuPont stock. And he said, are you crazy? It's a company that's done a lot of research, new products coming out. It's done well over the last 25 years. I'm not selling my stock. It always goes up. Well, over the next 6 months, the stock dropped about 30%. And my dad didn't sell. And he said to me at one point, he said, I should have followed your advice. Well, the problem with that was I thought I was very smart. I was probably more lucky than smart, but because I just, you know, I made the decision to sell, I would have sold. But looking back on that decision, I realize now it was just lucky that it did go down over the next 6 months. Anyway, but I did like the class. I kind of liked just staying on top of things, you know, reading the paper about the economics and just hearing the news going on in the world, you know. So when I left Wharton, I went to, become a stockbroker. And I thought, my idea then was, okay, you've got all this education, you can now begin to advise people on how to put together, you know, a plan to invest their money. And I went to work for Dean Witter in Philadelphia, and I had like a 6-week training program in New York City. And I figured I'll go up there and I'm gonna learn a lot about how to, you know, how to put stocks together in a portfolio and how to analyze stocks. Well, what happened those 6 weeks was all about how to sell, how to respond to questions, how to make cold calls. Not one thing did they bring out any finance, anything to do with finance. It was all marketing. And when I got started to do my job in Philadelphia, went back to Philadelphia, I enjoyed, you know, doing some of it, but it was all just, you had to be constantly selling. And you had to talk to your friends. Most of my clients were my parents' friends, really. And so I did it for like 3 years. I did the— I came back, I used to do cold calling at night, making phone calls to like 50 people I didn't even know at all. Back then it was not as bad as it is today. People didn't get that many cold calls, you know, so people would talk to you, but it was just a— it wasn't my strength as far as what I like doing.

Yeah, knowing you, I feel like that was probably torture.

It was. It was. I had to— I think what happens is you used to get out what they call reverse directory of the phone book. So you looked at what streets in Philadelphia were kind of, you know, had nice areas to live. And I would start calling and the first call was always the hardest. And then as you got going, then it got easier after the second or third call. But it was, yeah, it was very stressful. But you kind of get it. You have a little, you know, like a marketing or sales strategy. And what happens occasionally, someone would say, "Yes, I would like to hear from you. You know, call me back and have a good stock tip," or something like that. It was just all we recommended was individual stocks. It was nothing else other than here's a stock that we think is a good buy today. But it was not a way that I could see my future, I could not do it very long. And what happened to me then was I enjoyed the first couple years, but what happened was in 1969 is when the Dow Jones almost hit 1,000. It's hard to believe it was that low. It's, you know, it was 25,000 today, but back then it got to be like 995. And we think, oh, hey kid, it's gonna hit 1,000. It's gonna be a big day in the market, you know? Well, over the next, you know, 6 or 7 months, it dropped 35% back to 600 and something. And I remember every one of my clients— I've been a— I started in '60, '67. Every one of my clients had a lot— was in— is in a negative territory, all had lost money. And most of my clients, as I mentioned, were my parents' friends, of my parents'. So I always felt bad going back to Wilmington, Delaware, and seeing them, a lot of my neighbors, And they always come, "Hey Rick, what's going on with my stocks?" And I said, what I did was I used to tell my parents, "I'm coming home this weekend, open up the garage door, I'm gonna pull the car in. I don't want anybody to know I'm home 'cause I don't want them to come bug me 'cause I can't give them any kind of advice. I just say, 'Sorry, it's down, you know, too bad.'" So I didn't wanna say that. So I pretty much stayed pretty much in the dark from my parents. My parents' friends.

And yet the whole industry at that time really didn't know anything about what we'll talk a little bit more about in a minute about efficient market theory. And mutual funds were either just getting going or not really a part of the popular strategy for investors. Most people did pick stocks, had no underlying philosophy. And so you weren't doing anything that was any different from what the norm was in the country. But knowing you, my guess is what was hurtful or shameful in some way was you couldn't outthink what was happening in the market. You couldn't, there was no strategy that could defend you from what was happening.

Yeah, it's hard to imagine, but back in the late '60s, finance was pretty much in the dark ages, really. A lot of the studies have come out like, like Bill Sharpe won the Nobel Prize in 1990. You know, Fama-French, they came out with all these papers later on. So nobody had any idea how to really do anything other than buy stocks. I mean, there's very few articles written about, you know, using even index funds didn't exist. They didn't start until the '70s. So it was, yeah, it was definitely the dark ages and everybody just bought stocks and US stocks. Nobody bought bonds.

And the training you received, as you said, was training on sales. —yeah, not on a way to think or invest properly. And like, you're— I know, like, you are, as I said in the introduction, you ooze trust and integrity. And so your aim is so true with respect to helping others. You know, before we were doing this podcast, I asked some of the people we work with about what they feel after they're around you, what they're left with, what the residue is. And they just said, you have such a selflessness and a generosity of care for others that they, I mean, everybody that works with you loves you. And I think as I reflect back on you in this position, it's like how, I can't imagine how hard that must have been to not have a strategy to be able to help people you knew you really were aimed at serving. You weren't really a salesperson.

Yeah, I still can think back, this has been 50 years now, 1969, I remember going to my branch manager in Dean Witter in Philadelphia and saying to him, "What should I do? All these stocks I'm recommending are going down. What's a good strategy?" He looked at me like, "What do you mean a strategy? Just keep trading." Yeah. "Keep selling what you, if you own the stock, sell. If you wanna buy, buy something else." Yeah. He said, "If you can't stand this kind of, you know, do that." you're in the wrong business. And I think that was right. I was definitely in the wrong business.

At that time. At that time. Yeah. Okay, so let's jump forward. Let's get outta that business back in the '60s and let's go to the beer business and let's move to St. Louis.

How'd that come about? Well, I told my wife, I said, I think I'm gonna quit my job. But back, you know, in those days, the husband kind of made the decision. I mean, a lot of my friends, I always said, you know, they kind of joined this. Back then it was kind of, I saw my wife, I think I need to quit this job, move somewhere else. And she said, "Okay." We had 2 young kids at that time. "Where do you wanna live?" I said, "Well, anywhere but New York City and like in Alaska, something like that." So I sent out like 300 letters to companies, you know, and most of 'em said, "Thanks, we have nothing available. Keep your resume on file for a year." But actually Wharton had an alumni, you know, placement service and they had a job at Anheuser-Busch and I applied for it and I got an interview and I got the job. Knowing nothing about St. Louis and all our friends kept saying, "It's too bad you're leaving New Jersey, you're going to Philadelphia, you're going to St. Louis." People in St. Louis said, "Aren't you happy you're here versus living in Philadelphia?" So it depends on where you live. But I feel very fortunate in picking Anheuser-Busch, being hired by Anheuser-Busch because it was, when I joined Anheuser-Busch, which was, it had 18% market share. And when I left 25 years later, had a 48% market share. So it was a very growing, it was a growth environment, adding new breweries, new beer products, new divisions. So it was a very good time to be at Anheuser-Busch.

And there was a real, I mean, I would imagine when you moved to St. Louis and you said, I work for the brewery, that had a certain amount of prestige to it. That would be a good story to tell when you were walking around or making new friends. I mean, there was certainly a good amount of civic pride and just good feeling around the brewery. Did you sense that when you came to St. Louis?

Yeah, that was a big surprise to me 'cause I just thought Anheuser-Busch is just another company. 'Cause I looked at other companies that I could have worked for at that time. So we moved into St. Louis in November And we were unpacking our car, you know, and our neighbors came by and they all welcomed us in the neighborhood and they said, "What brings you to St. Louis?" I said, "Well, I'm gonna start working for Anheuser-Busch." And all the men said, "Anheuser-Busch? How'd you get that job?" I said, "What do you mean?" He says, "I applied and I got it." They said, "Oh my God, that's a great company. If you hear any openings, let me know. I wanna work there." Well, I had no idea. I mean, I just, it's a company that sells beer. What's the big deal? But yeah, it was a great, company for St. Louis. You said it supports the charities in St. Louis, owns the baseball team, and they did a lot for St. Louis. I look back on it, I left before it was acquired by InBev, but it's a shame that it's no longer the company it was back when I was there.

But you made a lot of great friends, had amazing experiences, and 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. And I was the assistant treasurer of Anheuser-Busch and In the Treasury Group, we did an analysis. The pension committee of Ann Hazzard Bush said, you know, we want somebody to look at 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? And '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, you know, 3 and 5 years. Years and we give money and the next couple years they don't do that well and they gotta replace the, consultant says, we wanna replace this one manager that done that well, we got somebody better now. And so they kept moving money around but never did that well. So 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 401 options for the employees. Every one of the, they got rid of all the active funds in their 401 plan and went to all pure index funds except for the Anheuser-Busch 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 you 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 major— 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 going to spend all my time doing all this extra work I was doing trying to pick the stocks.

What an amazing decision that the brewery made at a time when it wasn't quite as popular as it is now. I think now people say, oh yeah, I've seen some of the evidence, or I know that most active managers can't beat their benchmarks, or individual stock pickers can't keep pace with a simple average. But getting that lesson a long, long time ago was probably hugely valuable. I think at one point you, you may have said to me, well, you say it, have you made more money as a worker or as an investor?

Well, definitely as an investor. I think that's one of the things that, you know, a lot of people who start their own business, that they think they make their money from the business. But in my case, I made most of my money as an investor. That's one thing I learned at Wharton also was the benefit of compounding, compound interest. I mean, you don't realize if you just have, take the long view and put money in over time, let it grow. It will— it's amazing how much you can accumulate money just by being patient and taking advantage of the compound interest.

Yeah, it's boring, but it works.

It's Bill Sharpe, who won the Nobel Prize. It's a boring way to get rich. You can't brag to your friends about, I bought this stock at 15, it's now 75. But it's the best way to invest. But you have to have humility, humility that you can't You can't beat the market.

But that's one of the cool things about, I think about your experience though, is that Dean Witter experience before you came to Anheuser-Busch helped create some of that humility. Or as our friend Larry Swedroe has said, it's tuition. Some of the money that you lose in buying individual stocks, which is eventually you're likely to lose money because it's difficult to outperform the benchmark. Lost money is really tuition. You learn a very valuable lesson. And that humility may have really set you up for openness at Anheuser-Busch as you saw the data and evidence that told a story that was different from what you learned and what was conventional wisdom at the time.

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 in what I consider kind of wasteful, had no value, wasteful time, which is roughly 6 weeks of my life 40 hours a week, which 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, saving time, trying to do other things. Once you believe this philosophy, of getting access to the market in a low-cost way, it saves a lot. And once you believe it, honestly believe it, it saves you time.

Yeah, I think that's so cool because that's really where the strategy intersects with life. And that's one of the most, I think, rewarding pieces of this puzzle. Okay, so let's keep going. So now you're at Anheuser-Busch, you're super successful, you're a big muckety-muck and you got all these stock options and you're investing in a sort of indexy passive way. Life's good. You live in a perfect little house in a nice neighborhood in St. Louis. You're married to an awesome woman. By the way, this is a cool thing Rick told me once. I think this is such a nice thing for any husband or partner to say. Early on when we met, Rick said, "If you like me, wait till you meet my wife. She's my secret weapon." And I think that's true. Lynn Hill, Rick's wife, is an awesome partner. I think also, 'cause I think in many ways you're my second marriage. In both relationships, one of the cool things is when you have shared values and complementary skills, and you and Lynn certainly have that. And I think in some ways we have that. Yeah.

Well, thanks for saying that. I think, yeah, I think it's, when I first met you, that's what it was. I think we liked each other on a personal basis. We liked it. Do things together, had the same interest as far as, you know, talking, and we played golf together and tennis, and— but we were different people as far as our skill sets. Yeah, totally different. But we all had the same values as far as, you know, doing what's right for the client, being honest and truthful, you know, and doing all those things. But it was— but as far as activity-wise, I, you know, I got— I enjoyed more the financial aspects of it. I really enjoyed trying to, like, solve problems, you might say, when I used to Anheuser-Busch. I just used to like to get in a situation and just figure something out, you know, do a project. Well, you're so good at the, you know, the marketing and, you know, sales side and just the communication side, which I don't mind. I'm better at it than I was, you know, maybe 25 years ago after meeting you, probably. But I just— Yeah, we—

I think we've rubbed off on each other in really good ways. Yeah. Okay. But let's— before we jump to when we get going, let's go back to— you're at Anheuser-Busch and how do you decide to get out of there? You got You got this dream gig, you're in this cool business, you're in the beer business and it's successful. It's a dominant player in the world. What are you gonna do? Yeah.

Well, what, at age 55, at that point I had been there almost 25 years. So I kind of was eligible at that point to leave. We'd still keep most of my pension. I kept my health benefits at that time. So I told my wife, Lynn, I said, what do you wanna do? I said, she was teaching school then. And I said, you know, I could, we could leave Anheuser-Busch, we could, you know, our kids, we had 2 kids, both of them are out of state. I said, we can move to live by one of them, we could, you know, travel, we could do something else, you could quit your job, we could both do anything we want to do. And it's a little bit frightening sometimes to have a complete freedom to do anything. And we both agree, we like St. Louis. She said, I'll quit my job so then we can travel a bit more on day, because we were kind of limited when she was teaching school. So I said, well, I still like to do something. I just don't wanna, I wanna get away from the hassle of Anheuser-Busch, you know, the long hours there. So I said, I think I might wanna get back in the investment side, which, you know, as you said, I didn't wanna get back in the sales side of investing. But I said, maybe I think there's other opportunities investing, maybe being more like an advisor and getting away from the marketing side of it. I started taking these tests for the CFP and I did that. Then I started looking around for just opportunities to work. And I started going to brokerage firms and banks and CPA firms that had investment office in there with their practice. And they all said to me, "Yeah, you'd be great here. You got the experience, you got the Anheuser-Busch connections, you got the education. This would be great. Yeah, I'd love to have you come work for us." I said, "Well, that's great. I'd like to try that also." I said, "But one thing I wanna make clear, I want to recommend, you know, index funds for my clients. They looked at me and said, index funds? You don't make any money doing that. They said, come on, you gotta sell our products, our proprietary products. You gotta sell active funds. That's your decision, fella. You won't make any money doing index funds. And I said, well, I just don't feel right other than selling those products. And they said, okay, well, that's your call, but good luck. But luckily I found this one firm, Buckingham, which did have the same philosophy. It's not quite index funds, but it's actually even better than index funds, I felt, once I got there. It's a little bit more of an enhancement, taking the best sides of index funds as far as being low cost, low tax impact, you know, hold for the long term. So I went to work for Buckingham and my idea was maybe I'd work, you know, I don't know, 5 years, let's say, just to do something, just to keep active. And, and that's where, that's where I got back in the investment business. Mm-hmm. But in a whole different way. Yeah, it was more, it was definitely more to my strengths as far as, you know, helping clients with, you know, their investment plans, you know, getting a little bit closer connection to clients, knowing what their goals were. Developing a plan for them to achieve what they wanted to do with their money.

And how, for you, was this chapter of your life different from your corporate experience?

Well, the big difference then was when I worked for Anheuser-Busch, I felt like I was working for like one boss. I had to, you know, please him and, you know, satisfy his desires. And, you know, and when I started working for in a brokerage, back with Buckingham or back in the investment, it felt like I had to work for the public. That's why I made a comment like, this is a little bit tougher, this is a little bit different. I wasn't expecting I need to have, rather than one boss, maybe had 50 or 60 bosses. I had to please that many people. So I must admit initially I had, it was a little bit, I had to be a little bit of a transition to do that. But once I accepted that, Then I got a lot of satisfaction because you're making a difference in those lives. That's the thing. At Anheuser-Busch, you felt like, okay, I'm a small fish in a big pond. But here, now what I feel like is, you know, you're an important part of this company's future, really. And advice you give them is gonna make a big difference in their lives. And so it's a great satisfaction I didn't expect to quite get, but I do. It took me a little bit of time to adjust, but now I do like it a lot now. Yeah.

And did you really, at the time you were kind of coming into this, understand how emotional and behavioral this world is? You know, I think there obviously you have great technical strengths, but as we were kind of working together at Buckingham back in those days, was it ever puzzling to you, especially, you know, some of the data that would come out and say that investors' returns were so lousy in large part, not because they would have bad judging necessarily because they had bad behavior. Was that sort of something you understood or was that new to you?

I think it was probably not new to me really. I think the one thing is people, everybody has different risk profiles and different ways they react to things. And it's the big value that we provide really is to get people to best they can to ignore the emotions ignore the fear when things go bad. It's not easy. I think what I've learned, it's almost impossible. When you get a bad situation like the market's going down, there's been studies showing that really it's almost like a snake is going across your foot when you see a bad market. And even people who are PhDs and teaching professors at these big business schools, they have the same feelings. That they tend to get, like I read an article about during the tech increase back in the early 2000 period when they were going, tech stocks were doing very well. Even these people who knew that this was high risk would buy the stocks 'cause all their neighbors kept saying they bought a stock at 30 and it's now 50. They couldn't avoid it. It just, they had to, the greed or just they had to be part of the people buying those stocks So I think emotion is something you just can't control. And so you have to, best you can, ignore it. As long as you have a good plan, you can ignore it. If you don't have a good plan, then obviously you're in trouble. But if you have a good plan, the best advice is just to stay the course. Yeah, switching gears for one second.

You have a funny part of your habits, I guess, that is connected to controlling emotion. You wanna tell people about your obsession with taping sports?

Yeah, well, one of the things that actually I just took for stress and just, you know, I just actually took a, I was on a, took, got an annual physical and I had to fill out an app, you know, like an 8-page, you know, input form to show all the medications you're on and what drug and what drugs you take, you know, and your health, you know, as far as exercise and like that. One of the questions was, what about your stress level? How much stress do you have in your life? In your job, your daily life? And a scale of 1 to 10, I put down like a 2. And then it says, when does your stress occur? And I said, when I play golf. And I think one way I got rid of stress also, the other time I have stress also is when I watch sporting events, when I watch my favorite teams play a sport, I noticed I did get very excited. And so what I've done over, this happened maybe 25 years ago, I said, I'm not gonna watch any live event that my teams play. I'm like, I'm gonna tape the game. And so I tape it. At the end of the game, I'll then very carefully get on my TV or my iPhone and say, and I try to say who won the game, not knowing what the score was. And so I see who won the game. If my team won the game, I turn off my iPhone, let's say, and then I can put the game back on and very relaxed, watch the game, very enjoyable, you know, take a break, you know, I don't care who's ahead at the halftime, you know, and it's just so relaxing. Now, if they lost the game, I just, I won't watch it. So my only stress is like 10 seconds when I put my iPhone on and look at who won. But I think personally, it's a great way to watch games. It saves a lot of time if your team loses and you just, the games themselves, you miss a little bit of the excitement, but it really is so much, enjoyable to know that your team's gonna win eventually. Yeah.

I always give you a hard time about that, but I love that that's been a part of your routine for a long, long time. You were one of those guys, you had more VCRs than anybody I knew before the DVR came into reality. You had more VCRs going than anyone I know.

Well, yeah, before they had, you know, the DVRs and that kind of stuff, I bought two of those taping machines and I'd have one going and watching the other one, have the other one going, switching it back and forth. Yeah, it's kind of obnoxious. I'm kind of obnoxious about it. I always tell my wife, when the game's going on, please do not tell me. I have to turn off all my electronic equipment. I'm in silent mode for about 4 hours.

Okay, so shameless plug, I talk a little bit about this next part in "Odds On: The Making of an Evidence-Based Investor," the book I wrote a few years ago. So if people want more detail on this, you check that out. But we became friends in 1999. That's when we met. You want to talk a little bit about that phase and a little bit about what you think maybe sort of connected us?

Yeah, I think we met at Buckingham. I'd been there, let's say, a year maybe before you joined. And What I recall is that I would, and like during lunchtime, I would be sitting in my cubicle, let's say my office, probably a cubicle more than anything, and I'd be reading the Wall Street Journal, kind of getting caught up, relaxing, just taking a little bit of break. You'd come by and say, hey, let's get some lunch. I said, okay, let's go to lunch. I wasn't that excited about it. I said, I'd love to read the Wall Street Journal. So I would go to lunch with you. With you.

And then— Yeah, just to be clear, what you're saying is you liked being by yourself and reading your paper, and I interrupted that experience for you and said, "I think you'd have more fun if we did something together." Right.

Yeah. And if I went to lunch, generally I'd go to lunch for maybe like 20 minutes or half hour. I'd go to, you know, get a quick sandwich and get back to the office. With you, it took it like an hour, hour and a half, it seemed like. But I must admit, Matt, you did, you know, loosen me up a little bit. And so we kind of met that way. At lunch, we talked about our lives and our backgrounds and your story about how you got there. And of course, in the book about how life was like on the active side. And I could relate to that because that was the way my life was like when I was back there 30 years prior, probably. But then Then, you know, I said, what I remember is that we used to go to lunch together. Generally, we tried to do lunch together, but what happened was other people, "Hey, you're going to lunch? I'll go with you." So we always had about 5 or 6 people going to lunch with us. So we never really talked that much about ourselves as much as we did initially, but we had a good time. We had people going to lunch with us. And then over the years, I guess it had been about, I guess, a couple years, 2 or 3 years together doing that. We said, you know, I think you were the one that might have brought it up initially. We were together and he said, "What do you think about starting our own firm?" And it had not entered my mind at all. I was thinking, I was, I guess, around 60 at that time. I was thinking, "Well, I'll just keep working for a few more years and go off in the sunset." But as we talked, it made a little sense, you know? And then eventually we said, "Let's get more serious." So we started meeting for breakfast every Saturday morning. And this went on for like a year, and it probably seemed like 5 years to you. But one thing I learned from Anheuser-Busch was how to plan. Big on planning. They used to do 5-year plans, constantly updating the 5-year plan. So I said, "I think it sounds like this could make sense, but let's plan this thing out." So we would meet every Saturday, and I'd bring along all my notes and my questions for you. We would meet for breakfast, you know, and then we kept doing it all, you know, for, and I guess our wives thought we were crazy. I don't know, but we kept doing that and it started coming together. 'Cause the big thing about why it made sense was, you know, we built, I had the financial background, I had the clients, you had all the experience knowing how you worked with all these other RIAs all over the country and how they operate. And you saw, and you had all the operations experience. So it made, it didn't make a great fit for us to get going as far as from a business point of view. I think my concern only was we were friends already and I didn't want, you know, you hate to have ruin a friendship by starting a business if we don't get along for whatever reason. But we said, let's, we like each other, let's just go ahead and do it. So I remember that it was just, it was a constant. It took, I don't know when you felt let's do it. I kind of, it had, it kind of grew on me, you might say. But once I saw that we could do it financially and we we could stay friends, I thought, let's go ahead and make it, make the decision and approach our prior firm, Buckingham, that we're leaving. Yeah, I don't know.

I mean, I think one of the things you said to me was you'd been a W-2 employee your whole life. And if you were ever gonna do something different, now was a good time. And I really felt like if I was ever gonna do something entrepreneurial, you were the best person to do it with. And I think again, our aim was really true. You know, your experience and my past experience, we both wanted to really serve and educate people on this approach that we thought could make a real positive difference in their lives. And I think together we thought we were, we were on a mission. And almost, you know, in a strange way, I never, I never had that much doubt actually that we would be good together. It was just a matter of would it catch on or would we be able to build the business, but we knew we had fun together. We knew we were both bonded by the same sort of mission and purpose. And we knew we loved, you know, applying what we knew to real life situations. So I knew it was gonna be fun. The question was, would it be successful as a business? But we were, and we were having a good time at the place where we worked. We left 'cause we saw a better opportunity, not 'cause we had a problem. But June of 2005, that's when we decided to leave. And we always referred to the day we were leaving as, as D-Day, and yet I don't think we realized what?

It was D-Day. Yeah, the actual day we left was really D-Day.

I mean, maybe subconsciously it was there. We just didn't acknowledge it until the day we went to talk to the people we were working with and tell them we were gonna start our own firm. So we get going and we get going where? Where did we start our firm?

Well, yeah, the big thing there was we weren't quite sure how they would react to our decision. And we thought, well, we didn't wanna commit to a lot of long-term lease on an office building, let's say. So we'd said, okay, I was building a new house at the exact same time as being completed June of '05. So we just, let's say, let's work in my basement. So actually as we built the house, we did add a few extra features like some wires and lines.

Oh yeah, you got a basement that is wired for major activity, thanks to us.

So anyway, so that was, yeah, so every, so the first, you know, so anyway, we notified our prior employers we wanted to start our own firm, you know. They were very, you know, very amicable separation. They were very supportive and that which was a relief to both of us. And so we started, but we just in case, we started in our basement and we had, you know, all the electronic equipment, we had computers and printing machines And so that was, you know, the question there was would clients want to leave an established firm and go with two guys working in the basement?

Yeah, that's a legitimate question.

And we always said, well, great businesses either start in the garage or the basement. We started ours in the basement. Fortunately, almost every client of mine said, I'll go with you because we weren't changing any philosophy, just changing, you know, the location really. But luckily all of them felt the same way. Yeah, I like the philosophy. We're not going to change that. Yeah, I like you guys. So that was a relief when our clients kept saying, yes, yes, we'll go with you all. And so, but for the like 6, 7 months we were in the basement and, you know, I would get up in the morning. I was different also. I mean, I used to, so used to getting up, getting dressed, going and driving the car. And I had to get up, get dressed, take a shower and go downstairs and wait for you to come over. And I'd be in the basement working hard, you know, looking at things, and I'd hear you knock. I hear you come through the garage or come through the front door, and Lynn would be there talking to you. And I'd say, okay, Matt's here, good. And it'd be a half hour later and you wouldn't come down. I said, where in the heck is that guy? He's still talking to Lynn. Come on down. And I was thinking, what is he doing up there? And you'd come down, you know, and Then we'd start working, you know, and so, but it was one of those things where I know Lynn, I wasn't sure whether my wife would like us being there, but she loved it. She loved talking to you and loved, you know, us being there. And so the first 6, 7 months really worked out well. We had clients come by and visit our house, you know, and we had client meetings there. And so really it worked out, it was a great way to start a business until we decided, okay, let's make this a bit more official. We rented it, you know, got into an office building, rented the space.

What I think is pretty cool is if you think now you're, you know, 76, still a hugely important piece of the puzzle at Hill Investment Group. And I was thinking about our vision and mission and values and not a lot's changed.

No, if you look, I look back in our original, you know, planning back in '05, And yeah, the mission of our firm always was, you know, to get people and clients to, you know, kind of ignore Wall Street and just go out and do their, you know, enjoy their lives, spend time where it's more valuable, like their families and their kids and their activities and work. It takes some, you know, most people, most of our clients come in with, you know, that investing is all part of their life. And they come in with, you know, all their financial statements, you know, they have both the time and the worry and just, you know, and we try and what I like is clients now come in with, you know, they walk in with their Bermuda shorts, they've been on the golf course, you know, or doing some charity work, you know, and they have nothing in their hands other than maybe a pencil and they just sit down, we talk to them, you know, and they just, it just, you can see that their life is better. So I think that's one nice thing about this philosophy is once you believe it and once you see it, Then you can— the emotion is— you still have— you still feel bad when the market goes down, I think, but a lot less stress and emotional attachment to your investments. You know, you can't control it. People generally think they can control the markets, you know, but you just got to accept that you cannot control what happens in the markets. It will do well if you stay the course.

I remember when we started, I think you said something to me like, I'm gonna— I'll commit to you for 5 years. And here we are many, many years later. Do you have friends who ever ask you why you're still working?

Not as many as I thought I would, because most of my friends, all my friends are retired. And but I think they all, I think they all feel, I think what they feel is they can see I enjoy what I'm doing. They might talk to my wife about that. They don't talk to me directly as much. But yeah, this is well beyond my work life as well beyond anything I anticipated either at Anheuser-Busch when it started with Buckingham or when it started with our firm. And I do recall I said, "I'll give you at least definitely 5 years so we can get this business started, you know, and then we can see how it goes." But of course now it's been 14 years. But it's one of those things where, you know, I enjoy it so much. You know, I get up in the morning And I know I'm gonna, I get up, I'm excited about getting up, getting, going to work. And then I enjoy being with the people at work. I enjoy our coworkers, enjoy our clients. We get, when I get calls from a client, I don't have, it's always generally, even the market's going down, it's never like, it's always a pleasant phone call. So people always, I think, appreciate what we're doing. And when I leave, when I drive home, I always feel, I always used to think back in my day at Anheuser-Busch and even now, was I productive today? Did I add value to somebody? Did I help a client? Did I help a coworker? Did I contribute anything to the firm or to the clients? And I always feel the answer is yes. So as long as I feel that way and I have personal time to do things I like doing, there's nothing better I'd rather do than do this. And I think it's actually, it's helped me health-wise, mentally, keeping mentally sharp. So really, I mean, a lot of my friends now having health issues, unfortunately, with either hip or knees or something else. So I think, and everything I read about retiring is the biggest concern is people do have problems. But I always ask people who I know who are retired, How do you like retirement? And what do you do? That's always a question when I meet anybody new. When I play golf, when Lyn and I play golf together, another couple may join us, you know, to have two couples. When we're in California, we go to Palm Desert, and when I see another couple in the golf cart and I can see that they're retired, they have a fancy golf cart with the headlights and everything else, so I always ask them, you know, where you from? You know, what'd you do? You know? When did you retire? And then if they're friendly enough, I keep asking, do you enjoy retirement? And most of them say yes, they do enjoy retirement. And I say, what do you do? What do you do in a typical week? What's it like? And I remember this one gentleman from Chicago said, well, I play golf, you know, 4 times a day, 4 times a week. My wife and I play bridge the other couple of days a week. I go play bingo 2 or 3 nights a week at the club. And I take a nap about 5 times a week, and as he's talking, I'm thinking, this doesn't sound very exciting to me. I said, it must be better than this. But so I can't find anything better to do. And I just think that, you know, my age, I can still contribute. I mean, if I felt like I wasn't contributing, I wouldn't do it, I think. But I think my age gives me some advantage where you've been through like multiple market declines So I know how it feels to go through a down period in the market. But I also know if you stay the course, you're gonna come out of it. But I know you need someone to kind of walk you off the edge and tell you that. And people appreciate, I think, being told that. And they say, well, at least you've lived through several of these things, so I can kind of believe you. So I think my age is actually an asset to some extent. My technology skills are still below par, a little bit lacking. That's why I need people like yourself, Matt, and other people to help me. But the things that I've delegated, my skills, my job, do things I'm too good at, things I like doing, a lot different from the old brokerage days when I was doing things I didn't like doing. So everything I do now, I really enjoy doing.

Well, let me embarrass you for a minute because I know you love it when I say nice things about you. Thank you. Number one, you know, I got you in with the person who cuts your hair. And one time we were talking and I said, "What do you think about Rick?" And she said, "You know, my fear is that they don't make people like Rick anymore." And I really think that is the case. You are a world-class human. You are a really exceptional person and you have made a huge difference in my life. You've made a huge difference made a huge difference in our team's life. We now have an office in Houston, Texas, and great people there, great people here in St. Louis, have grown tremendously. But I love your story. I love your experience. And I love the generosity that you— the way you share it with others and the way you— it feels to me like your commitment now is really to not necessarily make your own life better, but to make other people's lives better, and not just our clients, but our team. And so we're all grateful to you. We're grateful to be a part of your world.

Well, thank you. I mean, I, you know, I'm gonna reciprocate a little bit 'cause I think your skillset is what I've told you before, but you know, you're the Bob Costas of the financial industry as far as how you communicate, you know, our message. And it's not easy to communicate 'cause it is kind of, it's, you know, it's kind of complicated. I mean, people, it's easier to tell somebody I wanna buy the, recommend this stock or this thing because, it's beating the market or something like that. It's an easier story to tell. To tell somebody, take the long view, it's all based on academic evidence, empirical studies, you know, and you gotta stick with it if it goes down, it's harder to tell, explain that message. But you've helped me and helped our firm do that, so I'd say we are a good team. I think that's one thing. I look back on my life and I think, What has made me successful? And I think I figured it out. Just, it's actually happened to prepare for this podcast, really. I think if you believe the place you work at, you believe in their mission and you really believe that what you're doing for that company is good for humanity, good for the consumer. If you like the people you're working with, you like those people, that's great. And you like the work you actually do at the job. If they all mesh together, you have a great life. Now, I feel very lucky at Anheuser-Busch and with our firm. I have all three of those things mesh. And I think that's fortunate. And I talk to people, I tell 'em, and really, if you get those three combinations, the mission of the firm, the people, and what you do, or you do your actual work, you have an unbeatable combination. You won't think it's work. Which I think, that's what I feel, it's not really work to me. It's really just, and having work and having personal time, the combination is great also. So I feel very fortunate. I mean, I look back on my life and I just think, you know, Guy Raz always says, you know what he said, luck or is it skill? And I gotta say, for me it's both, but I think luck had a lot to do with my success. And I don't really feel I'm that successful, but I do feel I feel very content in my life. And so I feel— but I just keep doing what I'm doing. Well, thank you, Rick.

Thank you for sharing your stories. And thank you for the time you've spent with me throughout our relationship. You know, one of the coolest things is when you feel understood. And we have a shorthand with one another that just— it's rare. It's really unique. And I'm super grateful. So thanks for doing this. Thanks for being on a podcast. Is this your first time being a guest on a podcast?

Oh yeah, first time. First and probably last, but sure. Well, thanks, man.

And thanks to everybody who listened to Take the Long View with Matt Hall and today Rick Hill. And if you like what you have heard here, please subscribe and, uh, consider following us on our Hill Investment Group newsletter. And And until next time, thanks so much. What's the largest check you've ever written? 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.