The Only Investment Guide You Will Ever Need | Andrew Tobias

Andrew Tobias (0:00)

There are just a few basic, simple things that everybody should know about money. Once you know that, you don't really need to know a whole lot of this stuff. In fact, if you do know a whole lot of other stuff, you can get kind of sucked into it. And before you know it, you're speculating in commodities and losing all your money, or you're doing this and doing that. It's not like chess or gardening or cooking where the more you read, the better you get.

Tyler Gardner (0:25)

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. So let's get started and get you one step closer to where you need to be. My guest today is a personal finance legend, someone whose work has shaped the way I first started thinking about money and investing. In fact, one of his books, The Only Investment Guide You'll Ever Need, was quite literally the only investment guide I ever used for about 20 years. And to this day, it sits on my bookshelf, and I keep going back to it for its timeless principles, its wit, and most of all, its compassion. Andrew Tobias has that rare ability to make money feel human, less intimidating, more accessible, and somehow even fun.

Andrew's career has been anything but conventional. He majored in Slavic languages at Harvard, but spent most of his time running a student business empire and helping publish Let's Go, The Student Guide to Europe. He went on to Harvard Business School, wrote for New York Magazine, Time, and Esquire, and eventually became and continues to be one of the most trusted voices in personal finance. He's written 12 books, including The Invisible Bankers, Fire and Ice, and the ground breaking memoir, The Best Little Boy in the World. He also developed one of the first personal finance software programs, Managing Your Money, you know, back when floppy disks were still a thing. And beyond money, he spent decades advocating for causes that matter to him, from anti-smoking campaigns to insurance reform, to his long tenure as treasurer of the Democratic National Committee. But today, we're not just talking about his resume, we're talking about life, writing, money, and why good advice, when delivered with humor and heart, tends to stick. So with that, I give you a conversation with one of my personal literary heroes, Andrew Tobias. When I was in college, I majored in English and economics, and anybody connecting the dots would see that I love writing, I love talking about finance, I love connecting with people like you and learning more about this whole world. But you majored in Slavic languages and literatures at Harvard, and at 23 years old, you wrote your first book, The Funny Money Game, that was obviously reviewed heavily, exerted in the Times of London. But could you connect the dots for us and for me, from your interest in Slavic languages to being a globally recognized writer in finance of all spaces, by 23 years old and writing for the incredible powerhouses that you did?

Andrew Tobias (3:12)

Well, that makes me into way more than I was at 23, but I'll try to connect the dots. When I was 16, I went off and spent three months behind the Iron Curtain with a bunch of other 16 to 17-year-olds with a life-changing kind of trip. I had never been that far from home. And I came back a little communist, more or less. And then I started college a year later, thinking I wanted to major in Russian to Soviet stuff, the Soviet Union. It was just so interesting. Their whole system was fascinating. But you weren't allowed to major in anything practical where I went to school. So the closest I could come was called Slavic Languages and Literatures, which wound up meaning reading War and Peace in English in the trot, you know, the clip notes. By coincidence, I ran into a high school classmate who now was a freshman classmate before school even started. He was riding his bike and finally I was allowed to ride my bike on the street. I mean, I was a very sheltered kid. And so I'm riding my bike and, Eric, hey, where are you going? And he said he's going to Harvard Student Agencies to get his student job and start earning some money to help pay for school.

He said, come with me. So I followed him up. We went down the stairs of 993 A Massachusetts Avenue and the old guy there who was like 20, the upperclassman, he said, finally, you guys are here. Here's what you got to do. There's six piles here, 5,000 pages, 5,000 in each pile. When you collate the six pages, you put them in the cover, staple it. And then when you're done with all 5,000 of them, you got to deliver them to every door in the university. And we pay $1.85 an hour. And I said, oh, no, no, no, you don't understand. I'm not on scholarship. This is my friend. I'm just was running the bike. So I started to leave. He said, I don't care. We need to get this done. So Eric and I spent all night doing it. And I made $35 my own money that I could spend anyway I wanted. That was the end of my being a communist. I wound up running the Let's Go The Student Guide to Europe, which was one of the businesses at Harvard Student Agencies. And my last year, I was ostensibly president of Harvard Student Agencies, which meant that when the faculty advisor and I agreed, I was in charge. And when we disagreed, he was in charge. So now I'm a capitalist, and I got a job offer from a company called National Student Marketing Corporation, the president of it. I had been on the phone with trying to get him to help with some project that we were doing with my little business. And he called up and he said, listen, when you graduate, you have to come work for me, because your business does a million dollars with his 1968, so it was a long time ago. A million dollars now, I guess, would be more like four or five million. But your business does a million dollars a year on one campus, and there are 2,000 campuses in the country. I want you to do that here and we'll have $2 billion in sales. And I said, you don't understand, after 12 years, this business has a cumulative loss of $27,000. So multiply that by 2,000 campuses and you would have a loss of $54 million. He said, oh, no, no, no, you won't do it that way. You'll use the lessons you've learned and it'll be great. So I went to work for National Student Marketing, which had gone public in April of 1960 at $6 a share. And by the time I was six months to go before I could exercise my options, age 21, it turned out that the creative accounting the company was practicing with the help of what was then called Pete Marwick and Mitchell, one of the big eight accounting firms, now they're big four, was so creative. And this was at a time when you were supposed to be creative in your accounting. If you weren't, Wall Street would penalize you and Fortune and Business Week and all that would say, what's wrong with you? It was so creative at National Student Marketing that the president wound up going to jail, as did the managing partner at Pete Marwick and Mitchell. Usually the accountants didn't go to jail, but he went to jail. And the law firm, head lawyer, didn't go to jail, but he had to go back to England, and Whiten cases never became quite as big as it would have become without this scandal. And I went off to a business school and wrote a book about it. And the book was excerpted in New York Magazine, and they put my face on the cover and gave me 10 pages. And from then on, I started writing, instead of actually being the business entrepreneur I thought I was going to be.