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Written early the Sunday morning of the weekend in which the United States of America, for the first time in its history, had its credit rating downgraded.
I dreamed last night that a church group asked me to give a talk on financial stewardship. I hadn't really prepared anything to say, so I was composing notes during supper at the church so my words would at least have a little structure. What I said was for another time and is not pertinent to what's below.
As dreams are wont to do, over the course of my small church talk, the setting transformed. With no rhyme or reason, it got larger. I had no microphone, but after a few minutes I desperately needed one because what had once been a modest church sanctuary had now become the equivalent of a large cathedral. Recalling my own summer travels to Barcelona last year, this cathedral may have been designed by Antonio Gaudi; in the whimsical setting of my dream, I was having practically to kneel down to take questions at the end of my talk, kneeling down in order to see rows of pews located down a set of stairs that led to a basement level that I hadn't even known I was addressing, and that went as far back as the eye (and craning neck) could see.
It's not lost on me that there's a parallel to this in my own life, to The Motley Fool community we have built. What began as two brothers answering questions for free on a small AOL discussion board has today, 18 years later, transformed into a setting where every day the space equivalent of 3,000 cathedrals of Fools gather to think and talk further about ways to improve our own financial lots in life and that of those connected to us.
Before I get to the point of this essay, I just want you to know that I realize the above may sound self-aggrandizing, or that the cynical may suggest I'm here to promote something. Once you see what I have to "sell," I hope any such comments are put to rest. That said, I am committed with fidelity to being true to "what I saw" (in my dream), so unabashedly I present the below.
On the eve of the stock market reacting to the unprecedented downgrading of U.S. debt, I have four points.
The first comes indirectly by way of Warren Buffett -- one of my favorite lines of his, paraphrased: Before you buy a stock, ask yourself if you would be willing to put every last dollar you have into that company and leave it there for 10 years. Never intended as straight advice (since every investment advisor would tell you it's horrible advice to follow directly), the line is instead intended to provide us a great "gut check" prior to buying any stock, to see if we really have long-term confidence in it.
I believe we should now be asking, as we elect public officials, something very similar. Of any candidate, before you cast your vote, ask: Would you be willing to put every last dollar you have into the hands of this particular public official to manage on behalf of our future? I have to admit that heretofore I haven't used this lens to view politics; I largely haven't concerned myself much with politics at all, frankly (and won't much in future). But however much of a political creature any of us is, we stand a far greater chance of improving, rather than further undermining, our creditworthiness as a nation if we as its citizens begin to ask this Buffett question of ourselves prior to casting votes.
Second, a quick question for you. Which message do you hear from your state government more often? Is it (a) financial literacy is a critical study -- a gift even -- for our youth, and we are every day testing and graduating kids who know what they're doing with money, or (b) "You could be next. Gotta play to win" ... your state lottery. If you're in my home city of (ironic?) Washington D.C., you know you get pelted by the D.C. Lottery message (with its horrible payout) 100 times more frequently than any similar message about the importance of financial literacy (with its outstanding payout). I bet your city, your state, is the same way. A nation of financially illiterate citizens who are democratically electing their government seems to me to be hoping for lottery odds that things will "all work out." Ignorance isn't bliss. We now have the domestic financial condition to prove it. Good news, fellow Fools: It doesn't take a great deal of time or effort to teach ourselves and our children the basics of money -- whether you're reading the 13 Steps at our site, visiting the SEC's Beginner Investor guide, or reading the basics at Investopedia, these resources are both freely available and absolutely critical, I believe, to our future independence and prosperity.
Third, did you know you have a label on your ear? Me, too -- can't help it. Whoever you are and wherever you live, whether it's your county or information you have freely given up about your own political convictions, the political world has labeled you and divided us all up like livestock: Democrat, Republican, independent. These labels pinned to our ears are used by handlers to group us together and manage us more effectively. This includes proper "messaging" to us, which involves finding out what we want to hear, playing on our biases, and wherever possible encouraging us to feel both superior to and alienated from those other creatures with the different ear labels over in that other pen over there. We have all let this happen to us.
In our own Motley Fool community, we have grown and strengthened in part because of the extremely apolitical nature of our founders and community leaders. What characterizes our own "Fool Nation" is a love of the principles of investing, which clearly rise above partisanship and enrich us all in so doing. We celebrate the motley -- what others often call "diversity" -- because we have seen how the encouragement and appreciation of diverse viewpoints make us STRONGER, not weaker. Dear Fools -- and in this case, dear fellow Americans -- I urge you to encourage this very same spirit in your community and civic efforts. Your handlers won't like it at all, but: Lose the ear labels. Gain the strength that says we're all in this together and have something new to learn from each other and that even when we disagree -- which inevitably occurs -- we are far stronger together than we are divided, in pens, by rival handlers.
Fourth and final, I believe a new wind must and will blow through this nation's alleys and cornfields. It is nothing more or less than the simple and strong conviction that we as citizens and that our governments at every level must spend less than we earn. Every year. All the time. I will say it again, full stop: We must spend less than we earn. This is the only dependable strategy for you and me to find financial independence and greater happiness in our own lives. And as we're now reminded with shocking force, the same is just as true of our government and our nation.
At the end of my dream, as I began to come out of sleep (in the way that we all remember our dreams when we wake up prematurely), I took a question from a woman down on that cathedral's basement level. She asked, simply, "What are you selling?" It's a question I love because I encourage all consumers to have the guts to ask that directly to the face of anyone talking about financial services to them (since we almost always are selling something), especially because we always should want to know what and how we're paying. But in this essay, I truly have nothing to sell. No stocks to mention, no ticker symbols to include, ma'am. No intended plugs for anything.
I wrote this motivated by shame personally and corporately because, on our watch, we have allowed what I believe is the greatest nation in the history of the world to stumble badly. This is a small effort by one Fool, without a microphone, to help.
David Gardner is co-founder of The Motley Fool. David holds shares of AOL.