than i ever expected. today i feel like i am in a cocoon with people who want our world to be better all of the bad things can melt away thank you very much i guess we can sign some books.

>> i know you are using grade grenergy this looks like a very exciting and high energy group. good evening. i am the program director at the commonwealth club thank you so much for coming down to tonight's terrific program with charles schwab and add omniscient ski. how many of you are members? thank you very much if you are not this is a great time to join there are terrific programs coming up and there is a gentle man at the back of the room who will be happy to answer any questions you may have see him on the way out. please take a moment to turn off your cell phones and let me tell you about upcoming

programs. november 12th rich lowry will be our guest and legendaryng 40 niner jerry wright and novembe november 15 actress mary lou tahenner will talk about why she has a unique condition that allows her to remember everything in her life. we encourage you and our staff about those to take an expeditionbr there are question cards on your seats brought to

the distinguished moderator adam mission ski make them as legible as you can and is member - - as much as you can signed copies of the book e right after the program welcome to charles schwab and adam mission ski. welcome to charles schwab and adam mission ski. >> what a crowd. >> i will hit the gavel but i want to reiterate that i do discriminate in favor of legible questions.qu [laughter] so you have been warned. this is one of my favorite

parts. welcome to tonight's meeting of the commonwealth club and your moderator for tonight's program is part of the commonwealth club ethics and accountability series with the family foundation of additional support from the bernard foundation for the program. i am very pleased to introduce tonight's guest charles schwab former ceo and chairman of the charles schwab corporation and author of the new book invested changing the way americans invest. charles schwab is one of the most influential financial executives as in 2019 nearly three.$6 trillion worth of assets managed by charles

schwab and company. founded 1971 with a 100,000-dollar loan and has since grown into a financial services juggernaut. his memoirme invested lays out his passion to change the way we invest in the hard work and ingenuity and entrepreneurship that propels his vision into one of the leading financial service firms in the world. to guiding company through decades of transformation - - transformations he recounts the defining moments of his life while providing unique insight into the dynamics of entrepreneurial companies and we are pleased to have a conversation today with mister schwab about the how to of financial management and his advice to obtain to career and life please join me to welcome charles schwab. [cheers and applause]

>> a lot of my fans are out here. thank you. they will think i stacked the deck. >> quick one - - quit while you are ahead. [laughter] >> start at the beginning not of your life by your life's work. 1975. you had an entrepreneurial off hot moment. tell everybody about it. >> may 1st 1975 and congress made a decision to make sure commissions were all negotiable. before they were fixed for over 200 years fixed rates prior and on that day they liberated the whole thing and democratized the ability to invest any way you wanted and

pay the price we lowered the prices substantially and that created a huge gap for us to enter into the business with low prices and great service. we knew this change is going to occur so today we have 20000 customers. th>> one of the common themes of entrepreneurialism is to identify as one, that the things that you see and act on is what separates you from everyone else so for example what congress did was not a secret. it was the opposite. everybody knew about it. so can you reflect on why what we have looked back on, what

enabled you to create your business and why you could act on it and others didn't? be make we weren't the only firm that enter that area. most of which were in new york. and then to go into the business that customers wanted a better deal with high commission products along the way that some are true and with that broker and i wanted

to have a place for people to invest. i was at stanford business school 1961. and for the next ten years or so. and a portfolio manager. so i was with a little teeny company. and then to say this is bad business and based upon customer service or values. so we decided ten years later in, 1973 to start the company with this view in mind. so the first thing i said is i didn't want any salesman in our company. and then be compensated by

salary plus bonus of the total company. if we were successful everybody got a nicees bonus or if we weren't, so everybody was focused on customer service. and then to grow and prosper. and we have cap the same model for the last 40 years. >> so this is a profound to make in the book that you come back to repeated the. so you decided your company was not going to sell, but you were going to market africa because you also identify yourself as a marketer. your book has a lot of nice detail about you and your early life. you are a californian through and through so tell everybody where you grew up and how it was.

>> that is part of my story my grandfather was born in san francisco 18 eighties and my father born 19 fifties. i was born in sacramento. so basically grow up here and spend my life here. and went to school here et cetera. but that was serendipitous it ended up for me that i could do things i could never do in new york city. so to clearly have silicon valley so i adopted a lot of

those great things to make us much more efficient all through those years even before the internet and then to apply all the best technologies that was really beneficial and the third thing is market closed at 1:00 o'clock new york time so we had all afternoon to clean up at the time which was technology. so to sit down make sure the back office is clean all the way through and for the most part so we had a clean back office. >> so you describe human touch on three things and one is that when you got out of college you did a bunch of things. one of them was selling buinsurance and i don't know if

it's right to say you are not any good at it? >> i had a number of jobs and it was really critical to encourage young people to geto jobs but to switch on the railroad but i was between the first and second year. so after you learn about the insurance industry. so looking at bank the year before.. i was a complete failure. so this was so overpriced in terms of sales commissions and family and friends.. and i never sold a single policy. [laughter] so i said this is not for me and after about six weeks they encourage me to quit.

[laughter] >> you said you were skeptical about most insurance products. >> they are all built upon a sales content that is extraordinarily expensive whene you analyze how they are constructed and i learned that very quickly and i decided it's a bad thing there were so many endowment and a 20 year endowment? oh my gosh. to anybody that is the stupidest thing to ever do. so i said putting your money in gold is faster than the insurance product which sucks the returns out through the insurance company. anyway. >> another early in current passion was golf you played for the high school team in santa barbara.

>> other than enjoying it why is it such a big deal? >> i love basketball. i really love it. it turns out i wasn't tall enough and there's nothing i could do about that but i played junior basketball in college or in high school now there is a sophomore or as a junior case or 6-foot 2 inches and i am looking up to them. so i decided maybe golf was an area tos focus on because even then 5-foot 6 inches or 5-foot seven, my men that's my way to copy them. >> he is one - - you are dyslexic and want to push you want something but for three years youou wrote you thought you were stupid or slow.

>> i could not read as fast as my friends in school. it really upset me a lot. and my comprehension was not as good as theirs. so i had to read things a couple times to really understand what was going on. so to me it was a handicap i never talked about it how i might be in reading because it was a stigma attached. >> so i discovered when my young son had the same exact issues that i had in school at seven or eight, took him down to be reviewed to see what the issue is about reading and

said your son has dyslexic issues. so it was a great revelation to me to figure out his problems were identical to mine and explained everything put one - . but the word dyslexia is undeveloped from when i was young and to be analyzed how the brain functions slightly different in that area when you deal with words and conversions. so it turns out with a lot of issues that i had earlier a big aha moment for me. >> so for that point forward so to develop a charity service for the parents who had kids with learning issues. and then we have manyad families, moms and dads and

their cat one - - their kid cannot read very fast. and that you have to identify. looked on tape is a great way to read books. [laughter] >> it's very accessible to the average reader but you go deep into the major businesses. >> it is really a story. then grew to 20000 and about four years time. and all the ups and downs as we were bought by bank of america and their shareholders and then we finally bought ourselves back after a

struggle. so the story about that and going on the bank of america board is interesting also. [laughter] reyou will love reading about that. and in 1987 and then to go back and review and review you mentioned a few minutes ago about . . . . system i thought

would solve the beginning software problem is we were getting more and more volume and paperwork and all that stuff otherwise they were going tod o deep into the sink or thrive. we worked hard during that whole time. co and it was a system that worked well so we adopted an online system that wasn't the internet it wasn't until 95 or 96 so we had all those years of using the very efficient system that i talk about a little bit but the software cost me $500,000 a and it was worth th00,000. [laughter] me that was a big decision would tell you. >> you mentioned a moment ago a

young company why did you sell banc of america in the first place? >> they sort of suggest that and we thought this is a pretty good business. and there was zero money myself and it was a whole lot of money for the whole country, 40% of the company was a lot of what they tell you that. we needed more and more money to grow. it was turned down by many along the way.

customers were joining ask why ends and so they didn't want to finance any further so it was a very attractive economy but soon it became clear that we were under the wrong umbrella. >> not only that, but they ran into huge problems. >> they lend money to those that went down the tubes and in argentina they had loans south of america and it went on and on so they had to sell the big tall building in downtown san francisco and they sold it to a couple other subsidiaries.

the fuel cell to the highest bidder. the company right across the street it wasn't a real threat because i was going to do it. i was a bit upset with them because going back when we needeneedto dealma with them tha stock transaction that was like $24 a share and i think the next four years it went from 24 down to something like nine so i was unhappy forma many reason. that was my total net worth. my wife is over here in the corner kind of shy. [laughter] >> it is a nontrivial part they couldn't do so charles schwab

personally. >> i had a likeness and his writ of prohibition and so it's sort of serendipitous my name and face by that time in advertising so i was getting people who identified the company with me. i don't know who they are going to sell to. it goes down the street about a block and opens up with other competing companies. so we came to terms and they ended up with five, six times what they paid me for invites years time.en the company was identified with you your name was on the door and correctly that wasn't 100%

your idea. can you talk about that? >> it was an interesting moment in time. it seemed a wonderful guy, 1977 we had a great article about the company and examiner, big picture of me and pictures in the book. i am leaning over this thing and they had a nice article about how we were doing and growing etc. and so he said to me why don't we use that picture of you in the act because before they would save 75% of the transaction cost like a 1 inch and then we could barely afford advertising atit that time but e

grew and grew an a at about the size of. are you kidding me and what is my wife going to say, are you kidding me you put your name and face out there. that's where they have their names. [laughter] so, anyway, i said how about this and the results were up about ten times what they normally were in terms of the advertising. so, we convince everyone it wasn't that much and it was pretty bashful at the time. we did it and it worked and wcided that was the way we were going to operateer here after. so that's what happened. >> questions are starting to come in from the floor so i will abandon my script and go to their questions. i'm going to read three that are

similar to each other. what advice would you give to a 16 year old starting an investment figuring out this future path? second, what pieces of advice can i take back to my high school students and last, my son is graduating from college this year what advice would youis gie him i guess you get questions like this from time to time. >> i have 15 grandchildren and they ask how do you do in the stock market, it's all about education, even at 16 it's about how the world for the functions and the stocks along with it. it. its ownership in a company and we have thousands of companies in america we call it the capitalist system. but i have to tell you

capitalism comes from the word creation invasion. that's why we love capitalism because it isis the creation to whatever it might be that it comes from the creation. learning about economics and how that functions is an important way to start. schools today don't have much in terms of economic education and it's a problem. natural literacy is a low-level frankly and people get in a lot of trouble with the ideas of credit cards and borrowing and office. they have no clue and need to learn about that in school. if you want to be successful in the system, read more about it, get passionate about it, understand why you are there and you will have a great investment life for many years to come.

>> let me drill down into play devil's advocate on your answer and say my advice would be to buy index funds and whatever you do, don't buy individual stocks because you will do it poorly because the academic research proves that most people do. >> i am a great believer in index funds v. schwab 1,000 has don1,000 buthas done incrediblyr 27, 28 years compounded of 9.9%. long-time believer and supporter and i've recommended it to many people it isis a great way to start. however it is a little bit boring. [laughter] in fact it is very boring and i think for a young person to step into an index fund doesn't get

the fabric of what it does. what about microsoft, netflix, all the things you see and so we are going to solve that issue. a thousand dollars from the grandparents or something and divided into 25 different stocks ended that will be an easy way for them to get engaged and involved and that is what you want to suck them into what they are about so they get the annual reports and they are curious about what's happening in that company. so i loved index funds and it's a great way to invest in all these kind of things but they are good to make more mistakes early on and do it

inexpensively. >> wonderful next question from the room is the most painful lesson you have learned about forming and growing a business? >> lack of capital. >> there is equity capital available for ideas to see what happened with facebook. back when i started, it wasn't really a flourishing area to speak of so that is a beneficial thing to have. you can do in advertising on looking for capital. is that possible to even put an ad in the paper and say i'm looking for capital?

>> do you have a favorite mistake that you made that was just a plain failure? >> there are too many. >> there is a whole series and we never knew for sure where we were going to end up. very early on i couldn't hire the best people i knew i was lacking different capabilities but i couldn't afford the competing salaries so i would have to convince the person we have a great company how about some stock options. i appreciate and respect that o u don't want to give away

every detail in the box over the younbook so forthe young peoplee know about the fire festival there is a story about his investment and that is all i will say about it. >> that is before the company gets started. >> two more questions from the room. how can this help address the growing problem of income inequality in the country and that is signed by can we lower income inequality globally through economic empowerment? >> that is a big issue for all of us that we are facing now that have occurred. now it is 85 or higher with

about 30 years after we retire from a company or whomever we might work for. that is education that is critically important so they use in all the things the government has set up to incentivize people to save more and invest more. people at the very low end to increase a little bit this last time although my understanding

is most people pay no taxes so how does that help? >> to be clear it is implied in the two questions that i just read that income inequality is not only a problem but a worsening problem and do you agree with that? >> they have these enormous god awful numbers but what happens to it is not enough attributed to the competition contributions that they make it looks like a blog but they give back tons of

money to different things a alog the way and then it o goes away for the most part. i don't think you want to take away incentives. we have a system that really incentivizes people to work hard because we don't benefit by all the innovations some of these wealthy people have done but it's not a forever thing. we don't want to wear the same clothes. the life is about our intellectual capacities and creativity and all these things. it makes life much for interesting than socialism. >> i'm going to read another question from the room. as the massive accumulation of the index funds leading to over valuations and compromising the price discovery process do you see this as a bubble in the

making? >> all these people out there giving valuations of companies and funding gaps when they arean undervalued the step in by the thousands of hedge funds. the big investments of the funds which i don't see that as a problem. >> you mentioned philanthropy a moment ago. here's a question from the room. iyo understand you have a great passion for philanthropy. can you tell me how you incorporated this and how the opportunities for you client's through the corporation. >> you are talking about the charitable funds which have been successful in the years and we had our 20th anniversary yesterday and i went to a meeting with the directors and so forth and h he gets out givet

3 billion a year to the one for 50,000 different charities and it's an easy way to go about. we do all the paperwork in that kind of stuff, so that's important for meme personally we've always felt we were successful in life until we were 45 years of age we had responsibility back to society where we got benefits whether it's education or helping people, kids with learning issues or whether in our case we help building museum in town. lots of things, charter schools -- we had our own foundation meeting today as a matter of fact talking about different things that we particularly like education, charter schools.

it goes on and on. >> i like the way you describe yourself as a maverick. you made your career sort of poking wall street just a little bit, not intentionally. >> i did it through the lens of what the customer like and i thought wall street was based on how much money can they make off of whatever it might be, a service they are offering and not whether or not the customer really likes itno or not so i reversed the whole thing around and that was a little bit of our secret sauce. >> my read was that you take a greatin pride -- >> we reversed everything and

they didn't like that. we think about the client first. >> do you think it is still the case? >> i have ceos come to see the companies that say i would like a system like yours. for the success and happiness of the clients, they loved the commission and can make a lot of money when they do the business. he would like to come our way but he can't do it. all his employees say we quit and come work for us. [laughter] bi want to come back to this because it's interesting how you grab your business back but before you did, if i have the age correctly, you were 46-years-old and you commented you are the youngest board

member. >> by a long shot in this pressing institution that was probably the most premier book in the company at the time in the mid-80s before there was the sort of interstate competition and such, soti they had some in california, they had a branch on every corner of every town. first day i walk into the board there's a rumo room about the sf this room here. i was pretty impressed and looked around the room we have people that plans trans americaa involve corporations at the time were on the board.

they were all mostly men. i think there was one lady. but anyway, it was 27 of them and they all owned maybe 100 shares of the companies said they didn't have a keen interest in this. i came in and of course my whole net worth and one of the largest shareholders i thought i had a reasonably good position to speak out about the company which i was really quiet like a mouse for the first year or so and then i started to lower a little bit. [laughter] >> so, you had in many ways good lyming with playing your company back and only doing that, but very quickly you took the company public. >> i have to because i have too much borrowed money and i wanted to certainlymu be leveraged ande

call that the tsunami year of 87. a really fast read. it was rough and ready at that time. >> you took them public and then -- >> the crash happened. >> within weeks. >> we went public 14 or $15 a share and i think within a month it was at six. that wasn't a very favorable thing. many of our clients had boughtt the stock. fortunately those that bought it is probably about a thousand times in value so it worked out okay if you hang on. [laughter] >> your belly you would have gone down anyway but you would have had a worse balance sheet. >> absolutely. no question about it. it was a leverage i would talk about all the details and the

stipulations that i had. >> another question from the audience, few founders are able to transition as companies grow in maturity and size. what did you find most challenging about the transition and what qualities does someone need to lead it through that evolution? >> i think there is a part of me that as i looked back i didn't think about it at the time, but i knew i had this thing. i needed to surround myself with really smart people who had shared a common vision of what we were about and i had the confidence thate i could leave them and they would help me in categories i was completely incompetent in. so, as a team we were able to create some really good things.

and i think they might have been that sort of handicap thing that always worked in my mind that i needed help from other smart people. and i think all the way through, it's sort of as a central thing that depend think about it at the time, but i think it's certainly true. >> double word famously fired one of the ceos or i guess the only ceo. >> i had to fire him. >> that was 2004, we had appointed a gentleman to be the ceo at the time and he lasted about nine months, came l to me and said it's just not working out. we don't have the confidence and some oinsome of the positions e, etc.. and they asked me what you come back. mei was chairman. would you become ceo again. c i was probably 66 thing like

that. and thinking okay. [laughter] it took me about four seconds to say that i would do it. [laughter] because i knew the company needed is some different leadership and a new they were right there is no question about it. so in 2004, we just came out of the declineof of the boom and we were suffering. it has been great in 1999 and 2000 and then in the ensuing couple of years, so we needed a newui direction and the fellow that was running it wasn't providing that and so i came sback in 2004 and the ceo thenn 2004 has done a fantastic job. >> one of the things you call out about that period is that it

had gotten out of whack called nuisance fees. explain that but also you were tistill chairman. can you understand how that happened? it must have been a source of i don't want to put words in your mouth but you couldn't have been happy about it. >> i wasn't happy about a lot of things but you have to let the reins go as you appoint someone to do something to keep your i r mouth shut as such. my mouth is not alway always shd me tell you. [laughter] so, you can probably say i went along with it. but anyway, you all know them, the bank used to charge every little monthly statement he would pay $3 for the service and so forth and those were the kind of things that were a nuisance. the one thing i really even to this moment people paid $3 pay r

$35 for a balanced check -- bounced check. we took that out we don't have any bounced checks were nuisance fees. banks still do some of that stuff but everyone is pretty familiar with the gotcha he is. >> in the auto industry it's the nuisance of buying a car. you just eliminated probably the most famous fee which is the brokerage commission. >> we were on that dissent is my hope is we would eventually get there where we had enough other businesses. many respects are analogous to google in some ways, the search is free but then you use other services along the way and by some of the products. we are not going to do what they do come advertising to use your.

information to set you up for different purposes and so forth. but we have mutual funds and a bank and people borrow from us. so the commission we took to zero. it makes it very convenient and i think people, we have already seen the influx of business coming in and people seeking out the commissions in the old traditional firms coming to us and we are very happy about that. >> when you did that start up called robin hood took out a full-page ad in the newspaper congratulating you for following them on having no fee brokerag brokerages. and i wonder what you thought about that and if they reminded you a little bit of you. >> certainly there's competition. the wonderful thing about american business so we have to keep on our toes all the time and so they were doing

successful growth of themselves most of which are visa account and i have to say the transactions are somewhat impaired because they don't provide things like that so that before the transactions it is probably the preferred way to do it with zero commissions even though you don't get a superior transaction withab this toprovement going to benefit you. so anyway, we have the firms that something's that are providing to become hundred thousand dollars in and they give free trades, so in the marketplace we thought let's do that now. so we went to zero. >> it's a good value. [laughter] do you think of a company treats its employees has a direct impact on revenue, for example, the better the company treats its employees, the bigger the return on investment.

>> absolutely. that's probably the number one resource you have, and i think we do really well at that. we have a value system everyone hangs on to. if you come in and have other values outside of that, you don't last very long. it's all about the service and not about the sales so it's been invaluable and we've gone and our employees have really benefited by what we do. >> given the last question on employees, can you talk about as an entrepreneur and a leader how you process when you have to tell employees to go when you have layoffs which you have had throughout the company. >> one exampl example i talk abn the book was very painful for us

after the 2000 crash as i mentioned in the boom and all that stuff and we had to lay off a large number of people, and it was very painful for myself and my wife at the time so we decided to put up a big fund to help people that we had to go to go backde and recharge themselvs if they wanted to become a nurse or wall school or medical school were forever, to help them so we felt pretty good about that and sure enough the 10 million went away in a hurry. how do you decide on your make it or break it choices in other words, how do you think about risks? >> i think about all the time. but? also, without taking risks isn't going to make any progress, so we have many products along the way that we

thought were pretty interesting and clients plus eventually when we came out that they were no good or they don't function properly, we trashed them and so we listened all the time to our clients. we were always probably annoying to them, surveying them on this particular thing in that particular service and so we want to listen to what tnd theyy and try to do the things that they suggest. >> but to use a sports analogy, some people the data tells them what to do and other people their gut tells them what to do. over your career can you identify with one or the other as a leader? >> there were many things we have done along the way that people said they have such ae great service, why didn't you started last year. i mean, they didn't know, people don't come necessarily up with these great ideas you have to go onto the marketplace and be creative enough to put the ideat out there and hopefully most oft

them stick. if they don't, then you obviously trashed them. but i think that you've got to be like some of the great innovations you see, they are obvious innovations that have come up along the way like netflix, so easy to get a nice movie on a sunday evening or something right and the convenience you don't have to go to all that stuff. it's fantastic or whether it is to pull out your iphone into that kind of thing. all these great creations in fact one of the greatest things to happen in many years as the internet in its beginning what is happening and what you are able to do because the capability is unbelievable really and it will get faster and as we know ig comes along and hopefully another thing will come along and we will give you more privacy than you probably have today because a lot of the firms use your private information for their advertising and such, so we are

talking about the backstage about a block chain and things like that. someday you will be controlled if your privacy, not david someday. >> and someone, you are not a technologist and were not trained as one. how do you make these decisions because on the one hand, with the internet, you were clear that this was a big technological change and charles schwab corp. was going to address it aggressively. right now in your field everyone wants to talk about the crypto currencies, and schwab isn't jumping on that bandwagon. >> it did on the internet. >> crypto currencies sort of a not something that we are in favor of right now because it is a state of security, but they don't have anything backing up the current itself. you want to have full faith and credit of somebody behind it like the u.s. government would

be pretty important to have or the bank or something. so, this is sort of something you can dream about and intact i own one claim i got it about three years ago, i guess i got about a half of one for my youngest son and half from my son-in-law making one coin. [laughter] it wasaw worth $16,000 at christmas and i think that within six months it was 4,000 so i lost 75% of my so-called gift. [laughter] not a good place to be and i kept telling him. i think my son sold everything he had in terms of these crypto currencies.it so anyway, here's a short investor. [laughter] you will be okay. [laughter]

i can't remember if it is the ninth or tenth year of the economic expansion in the united states and the market. logic or history even common sense would suggest that's not a great place to be as an investor what are your thoughts on that? >> well, i happen to be -- you have to be an optimist when you are something like myself, so i think that the undercurrent of the economy is really strong and i happened to be a believer that theli tax bill that went through to help our corporations in america become internationally competitive is a fantastic thing. the cash flows of the company even right now reporting the most firms are reporting improved earnings. so the underpinning o the consur seems to be in a great position to accomplish and it can go on

but nonetheless the economy, the markets always go up and down. that is a fundamental brothers currency into stocks, bonds, interest rates, youta name it, e markets always go up and down so if you are a smart investor, understand it andar make sure yu hang on for the long-term and look at any chart over the long-term you can find yourself three years, five years, ten years it always ends up here and then eventually ends upen over here. i'm talking about things that grow, stocks, not necessarily talking about gold and silver and commodities like that that don't grow necessarily they go up and down by the shortness of supply or demand over demand, those kind of things, but stocks and things like that are the things that can really grow and

look at any of these companies and i talk about making my point, every company that has ever been on the boardrd of, the s. and p. 500 companies had no management has ever come into the board room and said we can't grow next year. they always have a plan. some do not achieve it, but all have a plan to grow, and that is what we do. >> can you talk about the role of membership and is there someone that played that role in your life and what important lessons did you learn? >> i didn't have just a single person that was my coach and such. my father wass a lawyer and he had not much background in what i was up to in economics and finance stuff. so, that was i think the biggest motivation i had as a kid our

family came up through the depression years and how important it was so that was a fundamental learning that i got for my family make sure you do well enough, pack something away for tomorrow and so i read a lot of biography is when i was a kid about who are the people that did really well and i drifted towards those who did finance, j.p. morgan or something like that. i said i want to be wealthy. i don't want to sit around and say i can't buy that. that's what you do when you are 12 years of age. [laughter] you want to buy a bike, well in my case we went out and find a used bike and i had a used bike i was happy with. it worked well. i didn't have a new schwinn i had a used bike but i greased it up every day and it really

functioned. [laughter] can you share some words of wisdom about navigating external changes and making them work in your favor? >> i think for sure, education and understanding what you are talking about, making sure you have every avenue sort of figured out and then take the risk to make the decision to go one way and if it doesn't work, change her mind and come out with a different way. be flexible. flexibility and understanding how to be flexible or really critical. >> i promise to end everyone that at some point this evening we would talk about marketing. you write a lot about why he marketing was important to you and not just marketing but also public relations and public speaking. can you talk about that later?

>> those were all learnable things. they really are. and i learned about marketing for instance, i learned about pr, i learned about -- i would never learn how to be a great salesman, but there's one thing i could not do particularly if it was a bad product like insurance. [laughter] so, i always wanted to surround myself with something i could be really enthusiastic about, the great product i was deeply involved in that really have confidence in so we created schwab. i like to talk about the company because what we d do and what we stand for and all those values our company has come and i was not in the pr we would go around and we couldn't more advertisi advertising, very expensive but

we could afford today. i went to radio stations to introduce the benefits of discount brokerage, and it seemed to work. i got appointments with different radio stations and a few articles in newspapers like i talked about early on and talk to groups like this about a better system, talked about the benefits and why it was important to you to make decisions free of emissions so that is what we did. >> in any interview you ever gave you ended by saying something given the 800 number or come see us, something to

that effect. >> that is what a good marketer does. [laughter] were also about communicating with journalists. you have some wisdom in here this is my personalat favorite passage that i'm going to read coming and i'm going to share this with other ceos and in 2004, 2005 or so when you were into just the beginning of the return, the turnaround of the company, my former colleague at fortune but i believe you have worked with on an article about the corporate leaders with dyslexia came to you and said i want to write about the turnaround of charles schwab and ththe executives advised you tht that was a bad idea. it's too soon. they haven't proven anything yet and you write any number of reasons to say no but a good

story requires tension and we have to progress i thought we should take the chance in deretrospect the piece focused more on david's departure and we hope it made a more dramatic story i suppose but the underlining theme was we were fixing schwab. >> there is a picture of me in fortune which i really love. it's me as a 13-year-old, "fortune magazine." she did an article about executives that have dyslexia in their background and so she interviewed me and a bunch of other characters and unbeknownst to me she got a picture of me on

the front page of the magazine, 13-year-old white zero my god, which nobody recognized me, that's good. [laughter] >> we used to have a big staff of photo researchers that could find the thing. [laughter] >> it's okay because it makes it believable and authentic when they tell the whole story. not all ceos are like that. >> ultimately there is one. >> your story about having the photo and working with other parents and children reminds me

it's not just about numbers on a spreadsheet for you if you do want to make money you've said that very clearly that it's aboubut it's aboutmore than that explain to people how you've managed to not only build a business but have a good time doing it and why that matters to you? >> you think about purpose of life and what you try to do to and i'm always in great admiration of those, music and the musicians, great at being a doctor or lawyer or whatever it might be, just pursue your passions. i had a young boy d today applyg to college and i like to help these kids get into the best school they can get into but that is one of the conversations we have is pursuing yourr passin whatever it might be. businesses like myself and being

successful financially there's a huge obligation to give back a large part of what we do in terms of being successful we ae happy to do that for sure. every kid needs to find a direction in life, the passion they have and how to contribute in a significant way to society. i think that is the way that it should work. >> i would be remiss if i didn' ask you how is your golf game today? [laughter] >> it is as good as i can remember. [laughter] [applause] before we close, bear with me for a moment. thanks to charles schwab founder, ceo of the charles schwab corporation whose book is invested, changing forever the way americans invest. this program has been part of

the commonwealth club ethics and accountability series underwritten by the family foundation with additional support from the bernard foundation for the good with programs. we would also like to remind everyone inn the room signed copies of the book will be available outside of the room following the program. this meeting of the commonwealth club is adjourned. [applause]

good evening and thank you everybody for coming. i am a visiting fellow here at the american enterprise institute and commentary editor of the washington examiner and we have a great discussion tonight. we've got here the author of dignity which came out earlier this year. it is an excellent book. i read it and loved it and we will be selling afterwards. you should buy it. it's beautiful. and i say beautiful because it is also a