Monday, August 30, 1999

A Fool's Flashback


Today is my 85th birthday. Next week I will be rolling over my Foolish Four portfolio for the 68th time. You see, it was a little more than 69 years ago that I first stumbled into Fooldom. I had wandered into this website with cartoons dressed as jesters and a few interestingly titled articles on the front page. I prodded and poked until I found the page for this thing you called "Foolish Four." A quick scan told me that this idea made incredible sense. Operate under the assumption that Dow stocks were fortresses not seriously in danger of toppling -- ever -- and buy the ones that were most out of favor at the time.

Several days after my 16th birthday, a Treasury bill earmarked for my college education rolled over. I pitched my parents and convinced them to gift me a fraction of that bill, $1000, to use in my Foolish endeavors. I invested in my Foolish Two, Sears and General Motors, that year. I fully intended to let this grow to a modest $2,500 or so before I cashed in my positions midway through college to help make a dent in my expenses. Well, as it turned out, I never did use that for college. I didn't see the wisdom in trying to make a 5% dent in one year of college, which at the time was running very close to $40,000 a year.

I managed to escape college with only $60,000 of debt, thanks in no small part to two full time jobs held for the duration. I entered medical school, eager to enter one of the few professions that could afford me and my baggage. I finished my training 11 years after that and became a pediatric surgeon.

Somehow, through it all I had managed to save $1000 a year during college and the years after it. That initial thousand from my parents had been added to and blossomed to a sizable $160,000 -- right in line with my expectations of 22% a year. My money weathered several losing years in a row around 2007, only to bounce back as I was finishing my residency. I cashed out my portfolio and paid down all but $70,000 of my debt.

I never did grow accustomed to living at a surgeon's salary. I paid down that remaining debt in one year, and then managed to average $30,000 a year in savings. I retired at 62, my eyesight had begun to fail me. I began to draw my own pension -- a modest $100,000 a year -- from the bank of Me. I had nearly $36 million back then.

Today, nearly 69 years after I began this attempt to lessen the cost of college, I have nearly $2.8 billion. I couldn't possibly spend it all before my roll-over date, even if I tried. My 23 great-grandchildren each have $10,000,000 in a trust -- to pay the rising cost of education. It will be enough, I think. I hope.

I owe my financial success entirely to two Fools named Gardner, who refused to let me be fooled. But most importantly, I owe my family's financial security to those Fools and their troupe.

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