Investment Guru John Merrill
Sows "Seeds of Wisdom"
December 20, 2011—John Merrill, president of
Tanglewood Wealth Management, Inc.
and author of several books on financial investment, was the speaker for the College of Business commencement ceremonies held on Sunday, December 18.
A pioneer in the fee-only investment advisor community, John began his financial services career in Houston in 1974. In 1979, he founded Tanglewood, a firm providing financial planning and investment management services. Over the years, the firm has expanded geographically, with clients across the U.S. and in six foreign countries. Today, John manages more than $650 million in client assets..
John was named one of Barron's America's top 100 Independent Advisors in 2009. In 2008, Worth Magazine named him one of America's top 250 Wealth Advisors. He is author of several books including "The Sure Road to Investment Success", "A Portfolio for All Seasons", "Beyond Stocks", and "Outperforming the Market." Articles by John have appeared in Barron's, Financial Planning Magazine, Mutual Funds Magazine, and the Houston Chronicle. He has been quoted in numerous financial publications including Money, Investor's Business Daily, and The Wall Street Journal.
The following is the transcript to John Merrill's commencement address.
UT Arlington College of Business
December 18, 2011
All introductions focus on the speaker's accomplishments, the markers of their success.
Let me briefly give you a little back-story behind the success that nice introduction implies. Perhaps this will give you a better context for my message today.
First, I should have been where you are today—41 years ago. I had completed everything I needed to graduate except for a couple of courses to wrap up my degree. I signed up for those courses in the summer of 1970 and then an opportunity interceded. I dropped those courses to start a business. I did not earn a degree until this year! So, I am part of UTA's 2011 graduating class!
Unfortunately, that first business failed miserably within a year. A second business venture—was promising at first but did not last either. I was then drawn into an investment real estate craze that was going on in Houston. Regrettably, my timing was bad. I entered just as the whole frenzy imploded. Yet, I was more determined than ever to find a successful career path that would let me control my own destiny.
I was introduced to the owner of one of the larger financial planning organizations in Houston. While their compensation came from selling insurance and securities, it was delivered through sophisticated income tax strategies, investment analysis and estate planning.
The more I looked at the financial planning and investment process, the more I liked it. I was hooked. I had found my career.
Yet even as I loved the planning and investment process, it increasingly gnawed on me that I was paid primarily by commissions on the insurance and securities sales.
In 1979, I made the decision to start my own financial planning and investment company. The two guiding principles would be: (one) to be "fee only"—not to accept commissions; (two) only recommend investments that were based on solid economics and to steer clear of the dubiously structured tax shelters that were then so popular. Both of these were well outside of the mainstream of that day.
As a result, the early years were a real struggle. Many potential clients did not want to pay fees, and they were also seduced by the outward allure of those tax shelters. After six long years, and sixteen years since college, my path was finally rewarded.. Most of the tax shelters did not stand up under IRS audits and investors became much more interested in sound planning and solid investments after the 1986 Tax Act. This is when others began to recognize my success—yet, that's not quite how I saw it.
With that bit of background, I'll transition to my message for you today.
Giving a commencement speech is a little bit like parenting. You "plant seeds" by giving your best advice and then hope that some of them resonate and bear fruit at some point in the future…perhaps after being reinforced by others over time.
That is why most commencement addresses are filled with well-known "seeds of wisdom." This talk will follow that time honored tradition. My privilege is that I get to choose seven of the ones that bore the most fruit in my life based upon my struggle and experience.
My first "seed" is enjoy the ride. Most of you have heard that "success is a journey, not a destination." This quote is attributed to the great tennis player, Arthur Ashe, before winning Wimbledon in 1975. He pointed out that his major tournament wins were greatly outnumbered by his losses, yet he had enjoyed the entire experience and looked forward to whatever was to come.
Here you are today; you have achieved a very important rung on the ladder of your success. I hope you enjoyed your college career, the learning, the camaraderie, the critical thinking, and it wasn't just about getting the degree. Enjoying the ride to each new rung on your success ladder is such a big part of what it is all about. From my own story, I can easily say that I believed I was on the path to success long before others recognized it.
Enjoying the journey includes discovering the difference between happiness and joy. Happiness is the experience of feeling good. It is wonderful, but temporary. Be happy often. Joy is a state of being that comes from a strong sense of satisfaction with one's place in the world—where you are, who you are with and where you are going…that you are on the right path. Happiness is spontaneous. Joy is carefully built by your own choices and actions. Joy is a fundamental attribute of a successful journey.
The second "seed" is "Find your passion." Most of you have probably heard the famous quote from Ralph Waldo Emerson: "The world makes way for the man who knows where he is going." Do you know where you are going? Before being able to answer this question, you must first answer what turns out for most people to be a very difficult question, "What do I want?" I am reminded of Dustin Hoffman's character, Benjamin Braddock, in the movie "The Graduate." Everyone knew what was best for him—except he had no clue.
Most successful people know where they are going because they are following their passion—what lights them up. As Jack Welch, the former Chairman of General Electric put it, "Passion is a heartfelt, deep and authentic excitement about life and work." Identify your passion, what you want, and your goals will follow naturally.
In a truly great commencement speech, the late Steve Jobs addressed the 2005 graduating class of Stanford with this admonition, "Sometimes life's going to hit you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. Your work is going to fill a large part of your life, and the only way to do great work is love what you do."
The third "seed" is to pay your dues—then take action. Outward success, even if led by your passion, will not happen quickly or automatically for most of you. Certainly all great sports figures will talk endlessly of the countless hours they spend practicing their game, honing their skills. They understand the necessity of a solid work ethic.
There is no difference in the business world. Success comes to those who are prepared, those who set realistic goals and then develop a plan or process to achieve them. Then you must be willing to work hard and take actions required to meet them.
Wayne Gretzky, perhaps the greatest hockey player of all time, said "You miss every shot you do not shoot." What a powerful and cogent call for action. You miss every shot you do not take. Set aside fears of failure; without action, failure is assured. Accept the fact that most of your shots won't hit the mark. Fear of failure is debilitating and unproductive. Follow your passion, set your goals…the career, the job, that motivates and fulfills you…then take action…take your shots.
You may not get it right the first time, I certainly didn't. It took me four times to get it right, to find the perfect fit. I am so glad today that I persisted in identifying a career path that brought out the best in me.
Your life will happen—haphazardly or directed by goals, plans and action—that is your choice.
The fourth "seed" is to be principled. Develop strong principles of responsible behavior.
It is an unfortunate consequence of the nature of competition that some will look for shortcuts, others to inappropriate personal gains. The world of sports once again provides famous examples. Players that took steroids, bet against their own teams, and did not honor their commitments.
The business world has certainly had more than its share of unethical—even illegal—behavior in recent years. From the brazen shuffling of assets at Enron, through the overtly promotional ratings of dot.com stocks by analysts, to the self-dealing by Wall Street in knowingly selling its bad subprime assets to clients, to the recent high profile insider trading cases.
In some of these cases, simply bad actors were involved. In other cases, good people became seduced either by the culture where they worked or personal greed. Perhaps if these people had taken the time—early in their careers—to clearly define the principles by which their careers would be guided, they would have not been drawn in.
This is the time to define the principles that will guide your career and build the defenses you need to fend off anyone who would sway you from your chosen path. Just as important, choose to associate with those who hold similar principles. They will be your best source of affirmation and support!
The fifth "seed" is to be a builder! You are all familiar with the ancient Proverb: "You can catch more flies with honey than with vinegar." You win people to your side more easily with gentle persuasion and honest praise than with negative criticism or hostile confrontation. Your successful journey will not happen all on your own. No one's does. Many people will have a hand in whatever success your career achieves. Of course, that starts at home, which I'll get to in a minute, but here I mean all of the people you will work with…in your company, your professional organizations and your community. How you interrelate with the people around you will be instrumental to your ultimate success.
Take every opportunity to build up those around you—your bosses, your colleagues, your staff. In turn, you will find that almost everyone will work harder to help your success. And you will enjoy the ride ever so much more. A business operates much like a sports team in that the more the team succeeds the better each player performs and each player benefits.
The sixth "seed" is "keep learning." We live in an incredibly fast paced world today. Revolutionary inventions like electricity and the automobile took 50 years to reach the level of saturation enjoyed by the internet and personal computer in fifteen years, the smart phone and twitter in just 5 years.
I heard the president of Intel say that 90% of what they sell this December wasn't even available in January. More than any other generation before you, you must keep up with global trends—particularly those that impact your chosen field.
In other words, your formal education may be over—or have reached an important rung—but your learning has just begun. Embrace this simple concept; your value will deteriorate rapidly, even suddenly, if you are not state of the art. Don't allow yourself to become 1G in a 4G world.
I should quickly add that learning without understanding will likely go unrewarded. Regurgitating book knowledge on a test may have been sufficient for acing some of your tests in college, but it will likely prove insufficient for a truly successful career in business. Seek real understanding.
Thomas Friedman, the author of "The World is Flat," in a recent New York Times piece noted that "knowledge workers will be the big profit generators. This will require workers to bring something extra, something creative to whatever job they do."
I personally believe that one of the most important keys to your success will be in your ability to identify that "special value" you personally bring to your employer or to your own business. Look to provide more value than you are paid. Whether you are a CEO or entry level. That is a recipe for an illustrious career.
I'll end on a favorite quote of my mother's…a "seed" she planted for me. "Everything in Balance'—my final "seed." Make sure you have a stable foundation. Family, friends, and faith are the foundations of life. This is easy to see when someone's health fails—where do they turn? Where will you always feel welcome and at home? Where is your only source of unconditional love? Don't just want good friends—Be a good friend. Don't just want a great marriage partner—Be a great marriage partner. Don't just want great children—be a great parent. You reap what you sow.
I hope that some of the seeds I have sown today take root—in your hearts, your minds and your actions.
- Success is a journey—enjoy the ride
- Find your passion
- Pay your dues—and take your shots
- Hold to your principles
- Be a builder
- Keep learning
- Maintain balance
And I hope your journey of success never ends, that you are always reaching for the next rung on your success ladder—in every sphere of your life.
Thank you so very much.