5 Hard Truths About Investing From 26 Years at Motley Fool | Chris Hill

0:01Investing is as simple or as complicated as you would like to make it. There are plenty of very successful investors who just put money away every two weeks into broad market index funds. But there are people who are interested in finding great companies and looking for market beating returns. It really just comes down to what is your risk tolerance? What is your appetite for this? How much time do you want to spend on this? Hello, friends. This is Tyler Gardner welcoming you to another episode of your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing.

0:49So let's get started and get you one step closer to where you need to be.

0:56Before we get into today's episode, quick personal announcement. I wrote a book, three years of your questions finally in one place. It's called Real Wealth, published by Norton, out December 1st. And if you pre-order this month, you're automatically invited to a free live event on May 6th, where I'll answer your most asked investing questions exclusively for pre-order buyers. So go to tylergardner.com, pre-order, click the button that says you did, Two minutes, you're in. Now, let's get into today's episode. Today's guest is someone who I've been looking forward to connecting with for a long time.

1:33Because before I ever had a podcast, before I ever had a newsletter, before I ever created one video on Instagram or TikTok about personal finance, before any of this, I was listening to this guy in my car every single day. Chris Hill spent nearly 26 years at The Motley Fool, where he created and hosted Motley Fool Money from its very first episode back in 2009, building it into one of the most listened to financial podcasts in the country, airing on over 75 radio stations nationwide, and hosting over 3 ,500 episodes along the way. He co-created five shows about money and investing, interviewed everyone from Malcolm Gladwell to Mark Cuban, and became the narrator of Morgan Housel's The Psychology of Money, as you all know, one of my all-time favorites, which hit number one on Audible's nonfiction list.

2:28He is now the creator and host of his own show, Money Unplugged, and he is without question one of the most important voices in financial media over the last two decades. So I'm thrilled to offer you one of my favorite conversations to date with Chris Hill. First of all, thanks so much for spending the time today because I have mentioned this to you before, but I grew up listening to Motley Fool. And I actually say, you know, grew up in a relatively literal way. And you joined Motley Fool in 1997 with no background in finance that I could find, communications degree, theater work in college. And then when the company was genuinely struggling during the 2008 financial crisis, you pitched starting a podcast as a type of lifeline.

3:22So did you believe in that moment that this would work, or were you just throwing ideas at the wall during a scary time for the company? I'm glad you mentioned that it was a scary time because I think it's easy as the great financial crisis gets further and further in the rear view mirror, it's easy to forget how genuinely scary it was for the U.S. economy and in particular for financial companies. And The Motley Fool is a financial company. And when you're in the business of providing investment research for people and not just a bear market hits, but a genuine crisis like this, you start to lose customers.

4:02People get scared. we had produced a radio show between 1998 and 2006. And so at the end of 2008, as the market continues its slide and our business continues to suffer, it really was a time of just throwing ideas against the wall. And so my boss at the time said, should we, you know, be doing a radio show again. And I said, give me a day to think about it. And I wrote up what ended up being a five-page memo, longer than I meant it to be. But I figured I'm going to write this and he's going to share it with the other executives at the company. And it basically boiled down to, we should try a podcast before we try a radio show again.

4:48We had experience in radio. Podcasting was a relatively new medium. It really was a sense of, we're going to try this for a month and just see. we'll do a weekly podcast for a month. And we launched it in February of 2009. And after about a month, we were encouraged enough to say, all right, let's give it one more month. And after two months, the numbers were going up. And so at that point, we thought, all right, this is something that we feel like we're doing a good job of. And we're differentiating ourselves because there were other financial podcasts at the time. The Wall investing in a different way than we would talk about it around the office at The Motley Fool.

5:32And this is one of those things that comes under the umbrella of desperate times call for desperate measures. Well, and you mentioned a couple times in that response that you were intrigued by doing a good job and you were going to see if you could do a good job. And also that you wanted to talk about investing in a different way. What was the way that you wanted to differentiate The Motley Fool from some of the more traditional financial outlets at the time? I was the communications director at the time, and I sat near our investment analysts. And I had no formal training in finance. I did not take a single class in college around investing or economics or anything like that.

6:17I learned about investing working at The Motley Fool and spending time talking with our analysts and learning how to evaluate a business. And so when the analysts would talk amongst themselves or I would talk with them, we talked about investing and businesses and CEOs. It was much more like the way people talk about sports. And the people who were doing podcasts for Bloomberg and the Wall Street Journal and others, they were just talking in a much more clinical way. I think they were producing their show for a different audience, probably a more professional audience on Wall Street, whereas we were just talking about stocks and businesses for everyday individual investors.

7:04Well, and then it became so popular, as you know, so clearly something clicked with that way of communication and people and listeners clearly grabbed onto that. And then in January 2010, Motley Fool Money became the first podcast that I know of to make the leap to broadcast radio. And at one time, I believe it aired on 75 radio stations. And so we hear constantly in investing about a first mover advantage. Did you have any sense in 2009 that the financial podcasting was going to become what it became? No, is the short answer. We definitely benefited from being one of the first financial podcasts that had a somewhat well-known brand behind it, as opposed to just individual people just popping up their own shows.

7:59podcasting was more expensive to do back then it was more complicated but you benefited from less competition there were fewer shows but no there was no sense that it was going to become as big as it was what were some of the shows that you listened to intentionally at this time and either to kind of use as models for what you kind of wanted to do or antithetical shows of something maybe you said, I've listened to this show and we want to differentiate from this one. There was definitely some of that. And in a way that was when, when we were starting to do the research around what type of show did we want to do?

8:40And I was putting that memo together. I started listening to other financial podcasts just to see, well, what is the landscape like? And again, there are some of the bigger names in finance were doing intelligent shows. They just weren't talking the way that we were talking. So there was, that was part of it in terms of how we were programming. We're big sports fans at the Motley Fool, certainly myself and a lot of the other investment analysts. And so the long running ESPN show, Pardon the Interruption, the way that that show was hitting headline topics because Motley Fool money. And when we started a daily show called Market Foolery, which was shorter, more like 12 to 15 minute episodes.

9:23And it was very news driven. It was sort of like, well, these are the two or three big headlines of the day. And so we wanted to sort of take that approach of let's talk about them intelligently, but let's not ramble on and take too much of people's times. As the host of the shows, the other podcasts that I would listen to, and this is still the case, are interview podcasts. I started to listen to, you know, someone like Elvis Mitchell, who is a film critic in California, who hosts a weekly show called The Treatment, and is still, as far as I'm concerned, one of the best interviewers of the last 20 years.

10:04And so aspirationally, as I was trying to get better as a host, I would listen to these other shows and start to pick up on the prep that the hosts were clearly doing, the ways that they were asking questions, giving space for an answer, and pushing back when necessary. This episode is brought to you by Element. My sister's a marathoner who treats Element like a food group. When I told her I was partnering with them, she called me for 17 minutes. The first 10 were enthusiasm and catching up. The last seven were logistics about how many boxes I could get to her and how quickly I could do it. I've also mysteriously been reconnecting with a lot of old cycling friends.

10:50Years of radio silence and now my phone seems to be buzzing. It's wonderful, genuinely touching, but each call seems to end the same way, with some variation of, so what's the element sponsorship situation exactly, followed by their giving me an unprompted shipping address. Anyway, actual news and for salt monsters like me, my sister, and my cycling crew, it's outstanding news. Element just launched Pink Lemonade, a limited time of flavor available exclusively to Element insiders. 500 milligrams of raspberry powder, sweet, slightly tart, naturally pink. I love it. I'm also still completely obsessed with mango chili, which I will be drinking until they pry it from my cold, adequately hydrated hands.

11:38Now, to become an insider, all you need to do is order the Insider Bundle, four boxes for the price of three. Best value they offer, and you get early access to flavors like this one, plus surprise gifts along the way. So, instead of calling me, congratulating me, and then giving me your mailing address, go to drinkelement.com slash Tyler. Become an insider, get the pink lemonade, and if my sister calls, just know she's been working on her pitch for weeks. That's drinklmnt.com slash Tyler.

12:15This week's episode is brought to you by Fabric. Studies show the average American spends more time researching a refrigerator purchase than their life insurance coverage. This is not a criticism. Refrigerators are genuinely complicated, but a refrigerator does not keep your family financially solvent if you die. Priorities perhaps worth revisiting. Term life insurance is the financial task that lives permanently on everyone's to-do list right next to clean out the garage. Important, not urgent, and therefore never done. Until something happens, and then it's the only thing that matters. So if anyone relies on your income, this is not optional.

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13:38That's not a plan. Fabric has nearly 2 ,000 five-star reviews on Trustpilot. It takes 10 minutes to sign up. So go to meetfabric.com slash Tyler and cross this off the list so you can feel confident knowing your dependents are covered in the event of a true emergency. That's meetfabric.com slash Tyler, M-E-E-T-F-A-B-R-I-C.com slash Tyler. Policies issued by Western Southern Life Assurance Company, not available in certain states, prices subject to underwriting and health questions. In some of the interviews, I mean, clearly, again, something worked very well with how you learned or the mentors from whom you were learning.

14:23Because within your career with The Motley Fool, you interviewed Malcolm Gladwell, Michael Lewis, Dan Pink, Becky Quick, and Mark Cuban among, obviously, I could list this for the next five minutes. But out of that group, who surprised you the most? Kind of meaning who walked in as one thing in your mind and walked out as something completely different. Out of the ones that you mentioned, I think that something that people like Dan Pink, Michael Lewis, and Becky Quick all have in common. And what struck me pretty quickly is just how normal they all are. That they are, you know, Michael Lewis is on the short list of the best nonfiction authors in America.

15:10Dan Pink is probably on that list too. I think Becky Quick is probably the most underrated person in financial news when it comes to television over the last 15 years. And all three of them are very comfortable just talking to you about the normal thing that you would talk to anyone at a backyard barbecue about. Dan Pink lives in Washington, D.C. and is a hardcore sports fan. So I'm sure if, you know, if he joined the conversation right now, he would be eager to talk about the upcoming season for the Washington Nationals. That's great. It's funny that you mentioned that because my wife and I just completed a cross-country road trip both to Arizona and back within a span of a couple months.

16:00And so we had plenty of time to listen to an abundance of podcasts. And after listening to about episode three of a Tim Ferriss special on the way back, we turned to each other and regardless of who the guest was, at first we had been kind of excited to hear what their morning routines were. And then ultimately said, I think they're describing what most of us do when we wake up. I don't mean to disparage the interviews, but at some point I got, are we really oohing and awing over the fact that they have coffee and then feel good by 10 a.m. and do a morning workout. I think that's what a lot of us like to do.

16:41Right. Well, I mean, and among others you've gotten to connect with, and this one really fascinates me for very personal reasons, because this is the equivalent of my personal finance Bible, is you got the opportunity to narrate Morgan Housel's The Psychology of Money. The audiobook hits number one on Audible's nonfiction list in 2023. That book is basically required reading for personal finance. What is it like to be the voice that got to narrate that particular text? And I'm also interested in knowing what stood out to you either about that book or about Morgan Housel where you agreed to do this project and were excited to do so.

17:27So I'll get to what stood out in the book in a second. Let me give you a little bit of background because Morgan wrote for The Motley Fool for a bunch of years. And that's how I got to know Morgan. And so I, among others, was encouraging him to write a book, which is easy for me to say. I'm not the one who has to write the book. I'm just the guy off to the side saying, you should write a book. I'm sure he's pretty thankful for that advice now at this point. Yes. But at the time, you know, it was Morgan in the late 2010s was putting together this idea for the book and not getting any traction. He was getting frustrated.

18:07And I remember having coffee with him one day and he was just so frustrated that he was saying, I don't think I'm going to write this book. And he did that thing that we all do where we're looking for excuses to not do something. We just start throwing up all the reasons not to do something. Oh, yeah. I've got a list of those right next to me if you need a couple more. Yeah. And this was 2018. He said, well, you know, and audio books are a thing now and I'm never going to narrate a book. And without thinking, I just said to him, I'll narrate the book. Don't worry about it. Just write the book.

18:40I'll take care of it. I'll do it for you. having never narrated an audio book before. Yeah. In March of 2020, as the world is shutting down due to COVID, Morgan calls me on the phone and says, I just got the first copies. Yeah. And Tyler, in that moment, I had that horrible feeling in the pit of my stomach. And keep in mind, I knew intellectually that the book was greenlit. I knew he was writing the book, but it wasn't until he said, I'm dropping this off so you can start reading it, so you can prepare to narrate it, that it truly sunk in that I had volunteered for this job. And then I started to read the book.

19:23And this gets to part of your question about what was my reaction to the book. Five chapters in, I thought, oh my God, this book is so good. And I'm going to ruin it because I volunteered to do something that I've never done before. And I put the book down and I went to my laptop and I literally went to Google and typed in, how do you narrate an audio book? You know, it turns out there were a few different ways to narrate or a few different strategies people take. Yeah, you don't, you hire someone else. Yeah, exactly. Well, and at that point, I mean, and this is where it gets back to just the fascinating, even for me of kind of hearing this from you and your shared humanity in this experience because the other joke obviously was going to make is you just hire Chris Hill to narrate your book.

20:05Because at this point, there's nobody who I know who has listened to any semblance of either podcast or financial news who wouldn't think your voice was just dialed for this. And you had gotten to the point where you had hosted over 3 ,500 episodes of Motley Fool Money covering daily markets through a long-term lens. And I want to shift gears just a little bit, you know, kind of thinking that with that many episodes under your belt professionally, after all of that, what was the thing, kind of speaking of what brings us together, what was the thing that investors tended to obsess over the most that in your mind matters the least?

20:50and then in turn, what's the thing they almost completely ignore that you think matters enormously? I think the thing that individual investors and with the encouragement of the professional community, and it's one of those things that I think is just sort of the system that we're in as investors. I think the mythical idea of the hot stock or the stock that nobody knows about sort of the excitement. It all comes under the umbrella of excitement. I think there are too many investors who obsess over the excitement of investing and it's made more complicated and some would argue worse by apps on our phone that just make it really easy to trade stocks.

21:38Yeah. And sort of the gamification, that's the thing that I think is unfortunate that so many people still are excited about the gamification of investing and or they feel like a great stock is one that no one else has heard about when in fact the opposite is true that the great stocks to own over the last 30 years are almost to an individual company are almost all businesses that we've all heard of, we all know about. They all stand the test of time. And did you ever, when you were on Motley Fool, did you ever try to combat that excitement? Because just fully transparently, my listening to the Motley Fool, Motley Fool money, overlapped with my time as a portfolio manager.

22:32And I'd be lying if I didn't tell you I listened to the show on a regular basis to try to get some ideas every now and again. And I would leave the show going, this was great. They were really excited about company A or company B. And I got a very good understanding of the earnings report, et cetera. This was great. So how did you both play into, potentially if you did, that excitement and knowing that an audience would like that and also trying to potentially be a responsible podcaster in the financial field and help people understand that the excitement isn't necessarily the emotion that they want to foster when thinking through long-term financial moves.

23:14We tried to do it in a few different ways. And again, with both MarketFoolery and Motley Fool Money, these are news-driven shows. And so the headlines, to a large extent, dictate what we're going to talk about on the show that day. And so I would sometimes walk up to an analyst who was going to be on the show that day and say, hey, just so you know, Apple reported earnings. We have to talk about it. And usually the analyst would be fine with that. Every once in a while, the news of the day would be a company that they didn't really follow and talk about, well, okay, do I need to get someone else to be on the show?

23:52Because we got to talk about this. So part of it was just sort of the news drives the show. But we also tried to build in segments to enable the analyst the opportunity to talk about businesses that don't really get as much sunlight, that are as dominant. There's a segment that I think they still do today on Motley Fool Money called Stocks on Our Radar, which was a way for analysts to just say, here's the stock I'm looking at and here's why. We would also do episodes that were specifically geared towards boring companies, stocks that maybe your parents owned that you should think about owning too.

24:29Yeah. Because it really was part of the ethos of just trying to push back on the hot stock or, you know, sort of the meme stock of the day, that kind of thing. We're just saying like, well, no, let's actually talk about the fundamentals underneath and what's actually driving this business. There was an educational component that we were trying to bring to the table. This episode is brought to you by Copilot Money. I have a group chat with four of my closest friends from my finance days. Between the five of us, we have decades of experience managing other people's money, multiple licenses, and, I say this with love, a genuinely embarrassing amount of opinions about expense ratios.

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26:31It's a lot of regular people who downloaded it and never deleted it. That is genuinely the hardest thing to accomplish in this category. Go to try.copilot.money slash Tyler and use code Tyler2 to get two free months of Copilot money. That's try.copilot.money slash Tyler using code Tyler2. That's T-Y-L-E-R and the number two. your new show shifts a little bit away from kind of more of the i would call it the cfa type curriculum of analysis and earnings reports and is more focused on the financial anxiety that is universal with a lot of us and a path to financial independence that you claim is simpler than it's presented.

27:25And so I'm really curious, especially because you've spent so much of your professional career talking about this, writing about this, thinking about this, sharing this with others. After about 26 years inside the most prominent investing brand in the country, is simpler than it looks genuinely your conclusion about money? Or is that just something you kind of wanted to be catchy with in the podcast trailer? It's both. It really, you know, my friend, Jason Moser, who's an investment analyst at the Motley Fool. And I interviewed him for money unplugged last year. He has my favorite line on this topic, which is, he always says, investing is as simple or as complicated as you would like to make it.

28:11Oh, I love that. There are plenty of very successful investors who just put money away every two weeks into broad market index funds, and that's it. They don't want to pick stocks, and they don't need to pick stocks because they're investing in the S &P 500 or the QQQ. They're taking the broad index approach, and that works. And the longer you do it, the more successful you're going to be doing it. But there are people who are interested in finding great companies and looking for market beating returns, not just market returns, but market beating returns. And so it really just comes down to what is your risk tolerance?