The Voice Of Fear


I am at the top of my field.

Wow, you must feel great.

I am at the top of my field.


My father gave me a great piece of advice when I was about to graduate high school and go off to college: “When you look for a career, picture the end. Envision that you are the very best at that career and see if you still like it.”


At first, I was confused and he could tell. So he elaborated.


“You might start a career and become completely focused on success, only to find out that you don't actually like what you are doing.”


The more I thought about it, the more it made sense. It was a kind of a "you can't see the forest for the trees" idea. I have had two careers – one by necessity and one by choice.  Here is the story of the first:



Waiter in Tahoe



During my sophomore year in college, I came to the conclusion that I didn’t belong there for several reasons. The most important reason was that I was haunted by my own fear of not being able to hack it in the real world. I came from an upper-middle class family and had no idea how I would do if thrown out in the world with no support. Like my family, college was also comfortable and safe, which only caused me more anxiety. The voice of my fear felt my day of reckoning was coming and I might find I couldn't make it.

I was a lot like a soldier in boot camp, afraid that he will not have the courage to stand by his buddies when the shooting starts. I had always had a fear of fear. I was afraid that fear would make me fail to honor my responsibilities to those I loved if I became scared enough. Little did I know, this was not true  but it would be years until I really understood that.


So, I decided I needed to leave the comforts of college and throw myself into the scariest situation I could come up with. I had a great passion for skiing, and I chose to drop out of college and move to Lake Tahoe, California. My parents thought I was crazy not to stay and graduate, but I knew that I would not truly enjoy college or even be able to learn anything until I addressed this fear of surviving on my own.


I got on a bus and headed to Tahoe. I arrived with $200 in my pocket from my college job, a suitcase and no idea where I was going to sleep that night. Yep, this was scary alright. It was especially strange being in Tahoe this way because, while growing up in Sacramento, I had visited many times with my parents for vacation and felt very safe. Now, all alone, the place had a completely different feel.


I went over to the employment office of Harrah’s Casino and filled out an application for any job available. I was hired on the spot and allowed to stay at one of its smaller hotels for employees, located off the main drag. They told me they would take the hotel charge and my food purchases at the employee cafeteria out of my paycheck. Apparently, they had people like me showing up all the time and had a good system set up to get them on their feet. My first job was as busboy in the coffee shop, which meant that I could eat for free during my shift. So, except for my two days off every week, I had it made.


There is no greater motivator than fear. It creates focus, numbs pain and allows you to channel your energy in a way few other emotions can. I was scared on so many levels. I was about to face the truth of who I was. Could I make it on my own?


I was totally alone.


After I started working, I quickly realized the casino experienced a great deal of turnover in the food service area and people were always late or not showing up. The woman who ran the restaurant was constantly frustrated and stressed about having enough employees for a shift. Even if she did have enough, everyone wanted to leave early. I recognized the value that I would have to her if I proved to be an on-time, reliable, hard-working employee. If you want to quickly bond to someone, offer to make him or her feel safe. In this case, giving her someone she could depend on bonded us very quickly.


I became a waiter within a few months because she wanted me at her side. For the year and a half I worked at the restaurant, a waitress was brought to tears because of the pressure of the job every single day. From the moment the shift started, the line into the restaurant never dwindled and people were always in a hurry to get back to the casino. The overall system was also very poorly designed. We had to hang tickets on three separate wheels and try to figure out how we could time the food to come up at the same time. As a result, food would get cold in one window as we waited for the other food to cook. The cooks were underpaid and constantly abused by the servers, and often would go out of their way to screw up a waiter's timing if the servers gave them grief.


It was a kitchen full of fear, anger, anxiety and stress. The cooks and the customers were the predators and the food servers were the prey. Once a server melted down from the constant running, or the games the cooks would play, the boss's stress would rise as she had to figure out how to get the server’s tables covered. I knew that if I could become the answer to her problem I would get the open station, endear myself to her and make more money.


From the moment I woke up until I went to bed, I thought of nothing but making money. It was the only thing that could calm my fears. Working in a casino, I noticed that different types of people have very different relationships with money. Some don’t want to leave a dollar tip because they see it as another bet they could make, and others leave a $100 tip because it is just one of many chips in their hand. I became very good at making people feel special and knowing who would appreciate it the most.


Once I saw a man, well-dressed with several thousand dollars worth of chips on his table. I got a phone, plugged it in and brought it to him. He looked at me and I said, “You look important and I thought you could use a phone.” He smiled and handed me a $100  chip. Keep in mind that the average tip amount a server took home in those restaurants was $25 a day. Another time, I walked up to a man with lots of chips on his table who looked as if he had been playing all night and asked him if he was hungry. He said he was.


“What if I could have a cheeseburger sitting in front of you in 30 seconds?” I asked.


He looked at me and said that if I got him a burger in 30 seconds, he would match the time with dollars. I told him look at his watch and say go. When he gave the signal, I ran into the kitchen, put two packs of cigarettes in the window and told the cook I was taking another server’s burger and ran back out. I got back to the man in 27 seconds. He laughed and handed me two $25 chips. The waitress whose burger I took never knew the difference and the cooks were happy to cook another one.


I prided myself on the fact that I would not take home less than $100 no matter how slow the restaurant got. One day I had about two hours left of my shift and no waitresses had melted down yet. I knew I'd only have $70 in my pocket after I tipped out the busboys and cook, so I grabbed a wheeled chair and rolled it into the casino. I stopped a man and a pregnant woman headed in the general direction of the restaurant and asked if they were headed to the restaurant. They said yes.


“Have a seat and I'll roll you the rest of the way,” I said.


The pregnant woman was thrilled  her feet were killing her and the husband looked pretty pleased as well. They asked if I usually do this for customers.I responded, “When it’s slow and I can find someone who really wants to sit.”


They laughed and I rolled her right up to a table. It turns out they were comps of the casino and the husband was a big player, so my boss was pleased when they commented to her boss. They left me a $100 chip and my day was made.


One evening, I drew a map of the kitchen and tried to figure out how a person could successfully cover two or three stations simultaneously in this restaurant from hell. I wanted to be the guy that the shift manager trusted to pick up a shift every time a waitress melted down, and in doing so, calm her stress and fear all of which would make me irreplaceable in her mind. After staring at my map for a while, I figured the only way it could be done was for the cook to coordinate the food for me while the busboys cleared and served my tables first, and I didn’t have to get drinks.

I then started considering my co-workers' fears and stresses. First, the cooks didn’t get the appreciation they deserved for standing all day long over a hot grill for minimum wage. They were under a lot of pressure to get the food out as fast as possible and saw the servers as the enemy. The busboys were also treated poorly by the servers and were difficult to motivate they were supposed to receive 15 percent of each servers’ tips at the end of the day, but most servers took advantage of the situation and shorted them. I figured it would come down to acknowledgment and more money to get the cooks and busboys on board with my plan. I decided that I would devote 20 percent of my tips to the cooks and boost the busboys to 20 percent. Because I had been a busboy before, and I tipped them fairly as a waiter already, I was in pretty good standing with the busboys. I also made sure to keep several cartons of cigarettes in the restaurant to supplement my tips for the cooks.

Initially, I realized I was going to take a big pay cut until I was up to speed with my new system, but I was taught that you have to spend money to make money. I also made sure to do all of this as discreetly as possible so none of the other servers caught on and turned on me for setting a different standard.


It took about two months to get the whole system running smoothly. By the time I had it all in place, the busboys were fighting over my stations and the cooks couldn’t wait for me to place an order. I worked almost every day because all I had was loneliness to face in my downtime. After the occasional day off, the shift manger would see me, take my arm and say, “I am so glad you are here today. I don’t get along well without you.”


My record was handling four stations at once. By the time I was ready to leave Tahoe and get on with my life, I was tipping out twice what that average waitress made in a day. Even the cooks would comment that they didn’t like it when I wasn’t there. I thought someone else might have tried what I was doing, but they were all too interested in taking off early or getting their next shift covered. 


After a year and a half, I had saved a great deal of money and moved to the other side of the lake. My fear of not being able to survive on my own was put to rest and I decided I wanted a lifestyle a little more in line with being a ski bum. Then, in 1978, my parents sold their business, and both my brother and I received $20,000 from shares that had been put in our names as children. With that windfall and my fear of surviving gone, I went to the opposite extreme and quit my job. I didn't work again until 1982.


After seven great years in Tahoe and as the money began to run out, I was ready to go back to college, get a degree and search for my adult career. The education I received during those seven years was priceless, and armed with the knowledge that I could survive in the world. Three years later, I received a degree in history from Sacramento State University. 


After I graduated college, I was unclear about my future. I continued to use my father's advice to evaluate my options  he was right, most jobs didn't seem too bad at the start but would have ended up at a place I didn't want to be.


During my job search, a friend who was a broker at a large investment firm asked if I had considered being a broker. I hadn't, so he offered to take me to lunch and talk about it. There were three qualities I wanted from a career. First, I wanted to eventually be my own boss; second, to have no limit on income; and third, to have a long-term relationship with my clients.


As we finished lunch, I asked if he thought I would make a good broker. He said no. This came as quite a shock. I couldn't remember the last time someone had told me I wouldn't be good at something. I asked him why and I could tell I was getting the edited version, and I stopped him.


“Please, give it to me right between the eyes.”


“I don't think you have the discipline or focus,” he said simply.


I realized then that what he saw was a person who took 11 years to finish college and had come to the conclusion that I was more ski bum than college graduate. I decided then – right then - that I was going to be a broker, partly because it had all the qualities I was looking for and partly because I wanted to rise to the challenge and change my friend's opinion of me.


It was just the kick in the pants I needed. Fear is a great motivator. 


I told him that if I could use his name as a referral on my application, I would not let him down. He agreed, but my original application was still turned down witha very sterile rejection letter, which I thought was strange considering my friend was their No. 1 broker.


Rejection is also a great motivator.


I called the secretary of the manager who had rejected me, and asked if I could come down and make my case for further consideration. I guess I sounded so desperate that she went and asked him. He said if I could be there in the next 10 minutes, I could come down. I lived five minutes away, so I threw on my suit and blasted out the door.


I knew immediately that this man did not want to hire me. He looked at my resume and I could tell he was used to interviewing men from the military or IBM-type candidates.


“You went to three colleges over 11 years with seven years off in the middle,” he said. “Why would I hire a person who took 11 years to graduate college?”


“That was the education I needed,” I replied.


Still he could not wrap his mind around my resume. But I was very good in interviews. I countered everything he threw at me. Finally he picked up my resume in frustration and threw it, then looked me in the eye and said: “Give me one reason to hire you.”


“Because I have never failed at anything I've set out to do and I have no intention of starting now.”


He wasn't convinced. So I asked if I could ask him a question. He said yes.

“Does it matter that my friend referred me?”


“What?” he asked in a slightly startled manner.


“Your No. 1 broker referred me.”


He looked down and in a little box was my friend's name. Everything changed. A big smile came over him, he put out his hand and said, “You're hired.” And here is my story.



Broker but Wiser



That fateful day was 24 years ago, and I have been a financial advisor ever since. During that time I’ve learned the market is driven by one thing: fear.


What a surprise. 


I never stop studying the market. I've learned how to rise above the fear and the emotions it creates. But I have made plenty of mistakes along the way  the first being trusting the company that originally hired me. I was a neophyte, starstruck by the industry, and I had joined one of the largest firms on Wall Street. I was excited and felt honored to have the opportunity to work for the company, and I truly believed it was a client-driven business that adhered to the highest ethical standards.


The financial world seemed like the perfect place for me. I was a natural caretaker, so I wanted to be in a relationship-type business, and the market was the most primal environment on earth as far as I was concerned. A place where I could grow my understanding of fear and the behavior it creates in order to help other people. But, in order to do some good, I first had to survive. The attrition rate of new brokers was appallingly high. At the time, I didn't know why, but I learned. You work like a dog to build up your business and, ultimately, are likely to get fired for “underperforming.” There is an ingenious system in place to create an environment that pits you against your fellow brokers no matter how successful you are, there is always more pressure to work harder lest you get fired. 


This lovely arrangement is know as the quintal system. It begins with the original class of new brokers hired in the country at the time I was hired. In my case, approximately 500 brokers were divided into five groups of 100 (quintals one through five, with number one being the best). Each broker is then judged in three basic areas: new account openings, size of assets and commissions generated. After the first year, there might be only 300 brokers left from my class at the firm, and those 300 are again ranked into five quintals. After I  was with the firm for five years, there were less than 100 brokers left from my class, and that 100 was again divided by five. 


At this point I had outperformed the majority of those from my original class by being first quintal in opening new accounts and gathering assets. However, I was fifth quintal in production, so this put me in the third quintal overall. The system is designed to keep you in constant fear for your job, since dropping into the fourth or fifth quintal means you might be fired.


When a broker was terminated, his assets were distributed to the other brokers in the office, and not necessarily objectively. This is where the manager could affect your career greatly by the type of accounts he chose to give you. The system also made no distinction between where a broker’s assets came from. If you walked in the door with a large family account, it was worth the same as if you opened numerous new accounts by endless hours of cold calling. Unfortunately, nothing about the system took into consideration your understanding of the market or ability to achieve client objectives, and ethics were actually considered a hindrance to success. 


I realized early on that I was nothing more than cannon fodder to assist the company in finding a few brokers who could do its bidding at the expense of the clients. I lasted five years. I worked hard and stayed under my boss's radar until we came up with the worst idea in my firm's history.

It was 1991 and the wall was coming down in Germany. Everything with "Germany" in the name had skyrocketed and my firm had nothing to sell. So they got involved in creating a closed-ended stock fund that would come to the market for $1,000,000,000 and would invest in Germany and surrounding countries. We were all loaded onto a bus and sent to San Francisco for a sales meeting. All kinds of contests were developed to reward those who sold the most. Back at the local office, my boss rallied the troops into the conference room for one more pep talk. Being third quintal, I knew my time was short, so I raised my hand to ask a question.


“I don't see how anything in eastern Europe is going to be an opportunity. Aren't we breaking the first rule of investing  an opportunity can't be obvious? Everything related to Germany has already risen, we needed to do this two years ago when you could give away the stuff.”


The room was silent and my boss gave me a killer look. My boss got his raises and moved up the management chain by beating other managers. If our office produced more than other offices, he got big points with the higher-ups. My telling the room not to sell this product made my boss nuts. He called me into his office and screamed at me. They put me on three months probation, which I knew was his way of getting ready to fire me.


I was working in a predatory atmosphere, but that didn't mean I had to be a predator.  In order to deal with this environment and not be a victim of it, I had to avoid the dynamic the system created. I chose this career, but I was not going to be molded by a system that had no interest in me or my clients as human beings. This survival-of-the-fittest mentality, pitting one broker against another, could only be defeated if one was willing to fail. The important point of this story is that you always have the choice to put honor ahead of outcome.


Part of my original plan was to maintain a lifestyle that required as little money as possible, so I could survive without focusing on production. As my income rose, I lowered expenses. I never wanted to come to work and have to make money that day that is how brokers lose objectivity and begin to rationalize giving bad advice to clients. My goal was to have at least one year’s worth of savings in case I got fired, with a secondary goal of having two years' worth of savings as soon as possible. By doing this, I took the power away from the system.


The firm also used intimidation through the quintal system to push you into doing more or quitting, so your assets could be handed to other brokers who did play ball. I had planned my demise almost from the day I went to work for the company. During the subsequent 90 days, I informed my clients I was leaving and the reasons why,  and told them that if they wanted to follow me, I would be operating as an independent broker focused on their objectives rather than my firm’s agenda. 


During my probation meeting three months later, my boss expected to find a submissive employee whose production had increased. However, I informed him that I had filed a grievance with the human resources department and had no intention of increasing my production unless it came from business that was in my clients’ best interest. The next morning my boss called a meeting of all the brokers and on my way to it he stopped me. told me I was fired and said he wanted me gone before the meeting ended. When I got my official termination notice, it simply said "unsatisfactory attitude."


Well, I guess they were right.


I have been working on my own for the past 19 years and sometimes I think I should send my old boss a thank-you note for sending me in the right direction. My first year on my own I earned $18,000 (down from the $45,000 I had been making) but my overhead to live was just $15,000. I had $30,000 in the bank and life was good. Over the years, I've been able to rebuild my business exactly as I'd always wanted it to be.


I was right, by the way. The product they pushed so hard in 1991 the one that ultimately resulted in my firing  never made a single penny for those who bought it. But it did make the firm somewhere around $80,000,000. 


The financial industry is a sales industry. Those are its roots and nothing ever changes. It makes sense that it would use a quintal system to push sales and promote the best salesmen. Until you step outside the sales agenda, and understand what investing is and how financial security is really created, you have no chance.


Fear keeps investors chained to the mentality of asking themselves how well they are doing. This is how con men work. Show a high enough rate of return and you can bring in millions, even if it is all a lie. For more information and a better understanding of how this is done, visit The Web site is free but the information is priceless.

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