The Motley Fool: The Fribble, Another Road to Fooldom, by Tom Guy

Thursday, September 24, 1998

Another Road to Fooldom
by Tom Guy ([email protected])

I was inspired by the Fribble by Anne Duncan (The Road to Fooldom) and also, I felt inspired to pay back some for the wonderful experiences I have had since finding my way to Fooldom. There is more than one road to Fooldom, and while I don't feel I am there yet, I have at least started down that road.

Back in the summer of 1997, I sort of stumbled on the Motley Fool. I can't remember how, specifically, but these guys at least used words that I understood and made learning enjoyable. I spent about an hour every couple of weeks exploring the site with no real purpose other than finding out what these guys were about.

In November 1997, I was caught in a downsizing that was not totally unexpected, but I was also no way prepared for it, although at the time I thought I was. Being unemployed for the first time in 38 years was scary. The first thing to do was get the financial house in order and to find out where I really was.

Until that time my investing background was just pumping money, through payroll deductions each week, mainly into company stock, sort of blindly. (There was always a very limited number of choices on how this money could be allocated.) I made sure I got the maximum company contributions, too (but that's just because it was intuitively the right thing to do, not because I KNEW that was the smart thing to do).

In the meantime, I consulted my brother, who works among the Wise, to make sure I was on track. Could he help? Sure he could. He could get me an account with the brokerage he worked for real quick. So I read, read, read. And then I consulted with him.

Me: "Gee, I don't understand some of the ways that these investments work and why are you recommending that, etc., etc."

Wise brother: "Well, of course you don't understand. We in the business do it this way because that's the way we do it" (implied: "you dummy").

Me: "But these portfolio allocation (diversification?) software packages don't include dividends..."

Wise: "You can't include dividends because they are not guaranteed."

Me: "Hmmmm, doesn't that create a bias in favor of bonds/cd's?"

Wise: "Look, if your planning software recommends it, you must be wrong."

At this time I discovered that blood and finances don't mix (at least not in this case). Fortunately, my severance package took me through spring of '98 so I had time, and I got a home loan refinanced (reducing monthly expenses intuitively seemed real important). I had my hands full for a while.

It was time to find the Fool page bookmark. Hmmmmm, a Fool's School. Well, the price is sure right and, at the worst, it's the beginning of a quest for knowledge. Wow, I have to be responsible for my investments, they say. Wow, that is scary. It was not supposed to be like that; someone else was supposed to take care of this for me.

But it all made sense, and I could understand it, and chuckle some along the way, too. And I had been lucky in at least one other way: a long time ago, I found that paying off credit cards at the end of each month for the full balance made them convenient and free (well almost).

So, I bought a book, whoops make it two:
The Motley Fool Investment Workbook
The Motley Fool Investment Guide

I read more, learned more, and some knowledge did start to sink in. The most important advice/guidance was not to rush into any investment. For the first two or three months of my retirement, I was on the edge of panic, feeling that I should be doing something quickly, to secure my future income but not having a clue what that something should be.

This one piece of advice was worth its weight in gold and caused me to just sit and take stock of where I was and where I wanted/needed to get to.

Around April/May of this year, as I was trying to get a handle on what was going on with my investments using online quotes, I finally decided to move my investments out of the ex company sponsored brokerage (401k funds). So I had them transfer (rollover that is, with no tax liability) the funds by completely turning all the assets back to bucks.

Now I feel that I can take my time, get back into stocks with a plan and work on my diversification (with bonds/cds also). I don't mean to imply that I have any real good idea of what I am doing yet, but thanks to the Fools I recognize that I don't need to panic.

And as of last week, the first piece was put into place as I started my own Foolish 4 portfolio (and made a mistake, too, but I'll will fix that in twelve months -- oh, well, live and learn).

I guess the point is that I found this site just when I really needed it. And no matter what else, I feel this site has no vested interest (read brokerage fee's) except to do its best to help me learn and become responsible for my own finances. It's hell to be 60 years old and feel like you started back in kindergarten, but I am thankful that I at least found a classroom.

[Hey Fools, why not pen a Fribble, yourself? We welcome submissions from readers. Just click here and read the "What's a Fribble?" item, pen a short masterpiece, and send it off to TMF [email protected].]