“Invested: Changing Forever the Way Americans Invest” is Charles Schwab’s 2019 memoir where he takes readers through his life and career, from his childhood years to the present. Although not the first low-cost brokerage, his firm was the first major one, which has played a pivotal role in shaping the investing landscape today. By providing lower transaction costs, Schwab’s firm made investing more accessible to “main street.”
Born on July 29, 1937, Schwab lived in Sacramento, California then Santa Barbara. His father, a lawyer, introduced him to investing and sparked his passion for researching stocks, along with the belief in them as crucial for wealth building. The stock market fascinated him like nothing else could. He “tested every part of the fire to see how hot it was, and got all [his] fingers burned… still [he] was not dissuaded” (34). Although Schwab isn’t a career investor, this quote describes what many of the best people in finance say they experienced when they started. The losses incurred in the beginning are the cost of learning; necessary if one aspires to become a master of the craft.
Undiagnosed dyslexia made school very difficult for Schwab, and the resulting self-esteem issues made him overcompensate in various ways. He credits these experiences for building his work ethic and willingness to ask questions—attributes that propelled his academic standing enough to be recruited to play golf at Stanford University. After an abysmal first quarter academically, he quit the team. Through strong performance in relevant courses, demonstrating ambition and connecting with the dean, Schwab later enrolled at the business school. During these years he got his first jobs in financial services.
Early on, Schwab realized he did not want to be a cog in someone else’s wheel. He also knew his learning struggles made him incompatible with most employers. So, in November 1962, he and two acquaintances (who he would eventually buy out) launched what would become “Charles Schwab.” Their company “Morse, Mitchell, and Schwab” started as a bi-weekly investing newsletter. After a brief stint as a subsidiary of his uncle’s company, as “First Commander,” it became “Charles Schwab & Company” in 1973.
The Security and Exchange Commisson’s ruling on May 1, 1975, that deregulated commissions for stock transactions enabled low-cost brokerages to thrive. When industry giants like Merrill Lynch responded by raising prices, Schwab saw a golden opportunity on which he was able to capitalize handsomely. Their most substantial obstacles came in their time as a subsidiary of Bank of America between 1981 and 1987. Since then, they’ve grown to be among the largest, most influential financial services firms in the world. Schwab credits his firm’s investment in advertising, superior risk management and embrace of technology as explanations for their success.
“Invested” emphasizes the importance of determination, passion, relentlessly fighting for what you believe in, being optimistic and believing extraordinary things are possible. I absolutely loved this book and would recommend it especially to aspiring entrepreneurs, finance enthusiasts and those with learning disabilities. As someone who identifies with all three, Charles Schwab is one of my greatest inspirations and I believe his story will inspire others too. He is proof that there’s not just one path to success and how powerful a positive mindset is in achieving one’s goals.
