FRANK CAPPIELLO and Carter Randall were longtime panelists on the television show Wall Street Week with Louis Rukeyser. Panelists typically worked at investment firms, with their affiliations displayed on the screen. At some point, Cappiello and Randall retired. On the screen, each was simply identified as an “independent investor.” At least one regular guest, John Templeton, also achieved this listing after retiring from running the Templeton Funds.
That “independent investor” label intrigued me then and does to this day. Do you need a career on Wall Street or in the financial services industry to achieve this designation? Does society benefit from having independent investors? Can you be an independent investor with $100,000 or do you need a million?
I’m retired and primarily living off my investments. Does that make me an independent investor?
Popular portrayals of wealthy individuals who make money from money are often negative. Think of Charles Dickens’s Ebenezer Scrooge or Mr. Potter from It’s a Wonderful Life. William Shakespeare coined a term with his infamous moneylender Shylock, who seeks a “pound of flesh” from a defaulted borrower. Marxists would say that in the eternal tension between capital and labor, investors are extracting their wealth from the sweat of workers.
The old saw says that money does not grow on trees—it has to be earned here on earth. Savers who put their money into bank accounts and investors who buy stocks are funding the future. Even in Bedford Falls, Jimmy Stewart, playing George Bailey, explains that money deposited in a bank account is invested in a neighbor’s house. The mortgage pays the interest earned by the depositor. Without saving and investing, there would be no capital to expand the economy.
Wall Street Week producers used the moniker “independent investor” to make clear the panelist had no employment affiliation. But I like to think it also spoke to financial independence. Those so labeled had achieved freedom from nine-to-five work through their diligence in saving and investing. Investing was no longer their vocation, but had become their avocation.
Rukeyser would use the term “investor” to mean a long-term stakeholder, not a speculator or manipulator. The show’s premise was to lift the curtain on Wall Street to let the little guy in. But it also served to encourage sensible investing.
Similarly, many HumbleDollar commenters encourage sensible spending—and caution against conspicuous consumption and living beyond our means. The Chinese concept of yin and yang suggests the world is made up of balanced forces. We need both spenders and savers in the economy.
The spenders keep the economy chugging along. The savers help fund their consumption. Those of us who are HumbleDollar-oriented savers should be thankful for the spenders.
When we see media accounts of the student loan crisis or read about bankruptcies from credit card debt, there is sympathy for the borrower and antipathy toward the lender. Certain senators can be counted on to ask for hearings. Yet, if we borrow, shouldn’t there be an expectation of repayment? If you dig deep enough, the money lent ultimately came from individual investors.
Mild-mannered as they were, I don’t want to think of Frank Cappiello or Carter Randall as either Scrooge or Potter. John Templeton, in particular, was noted for his generous philanthropy. Those of us who have achieved financial independence should find ways to give back, whether with their time or money, or both.
At the same time, those who are making money from money should be recognized as funding the economy. Demonizing their efforts doesn’t help anyone.
Regarding your mention of media accounts of the student loan crisis. It is a real crisis, approx $1.5 Trillion worth. The US nominal GDP is around $23 Trillion as of 2021. Average student loan debt by graduating class has increased dramatically over the last few decades. I wonder how many of the readers of Humble Dollar had very little debt after finishing their schooling. After finishing undergraduate and grad school my debt was practically nil. Over the last few decades we have as a nation decided that students should have more responsibility for paying for their higher education. In the future a higher and higher % of people who read this type of column will have a higher and higher student debt loan history. It is hard to save that 10% of income by those individuals who are impacted by high student loan debt.
I agree that it is very real. But if a student borrows money, they should pay it back. The problem is that students get advice that any college degree is better than no college degree. The truth is that students need to consider the return on their investment. If they are going to borrow $200K to major in a subject that has no employment prospects, that’s on them. Worse yet, if they borrow big dollars to start college, but never finish because they were not adequately prepared for college, they get the double whammy of no degree and debt to repay. Unfortunately, students are not trained in financial literacy in high school and they do not receive adequate counselling on their choices. I once had a former college administrator describe college financial aid advisors as the biggest predatory loan purveyors out there. There have been some reforms in recent years, but colleges need to fill spots in the freshman class every year.
By your logic, all Americans who borrow and cannot pay their debts should be required to pay their debts back and should not be able to file for bankruptcy. Oh I forgot, all Americans can file for bankruptcy, but not student loan borrowers.
Thanks Howard. I have fond memories of watching WSW with my father and brother.
We choose to live in a capitalist society/economy. To be a fully participating member of the community, you have to have some capital. Loaning or investing that capital is necessary to keep the wheels turning, but HOW we choose to loan or invest our capital is a primary determinant of how well the economy and the community will function.
And the inimitable Ms Smythe
I had forgotten about Ms. Smythe: Wall Street Week – Wikipedia
Thanks for recalling to mind WSW. My wife and I watched it regularly—the “elves”, the awful puns, the urbane guests talking. We liked the format—LR first, group of panelists second, guest of the week third. No haste, but a full program with a regular and definite format. We did not start seriously saving and investing until 20 years later, and very differently in index funds. But somehow I think we picked up the notions of steadiness of purpose and longer term thinking, for which we’re grateful.
Thanks Howard,
I read your article as well balanced economic commentary from a political and economic center perspective.
When I was a boy I attended many events with my parents where it was common for a speaker to ask those in attendance who had served in the military to stand, if able, to be recognized. Often that was a majority or a large number. Those veterans, mostly serving in WWII, and their families shared common past purposes. Regardless of current personal economic condition common past purposes encouraged us to do the best we can do individually and giving an opportunity to succeed while striving to have adequate safeguards so that few fall through the economic cracks to ruin.
I am grateful for our economic system and those who came before me. I hope we are able to continue our common purposes and willing to do what is needed to pass them forward.
Best, Bill
Enjoyed the article. However, not so sure how helpful the “certain senators” line is. It invites unnecessary political commentary (see comments section below). Capitalism is great…unfettered capitalism, not so much. Yin and yang.
I, for one, am very happy that there are millionaires and billionaires, earning big salaries and paying much higher rates on much larger income than me, and keeping banks funded, so they may provide loans, etc. I really thought I heard wrong, a few years ago, when Bernie Sanders stated that, ” there should be no billionaires, or even people with hundreds of millions, etc.,enough is enough!” Really? so, government thinks they should limit how much we have? Say goodbye to innovation and the like if that ever happens. So, according to Bernie, a nation with 60 % of the world stock market cap, with only 4% of the population , is a bad character?And we are doing something wrong? Sorry Bernie, please check out the word, ” capitalism “, in the dictionary.
Class warfare is still a popular tool…I personally don’t know of any poor people creating jobs.
Class “warfare” is such a horrible cliche.
To equate discussions of what is a moral economy with war where people get limbs blown off, burned alive & other terrors is truly bizarre.
Only a sheltered American would use this weird cliche.
Maybe not “poor” people but there are millions of small business owners who create numerous jobs. The fact that the widely publicized tech layoffs didn’t stop our economy from adding a surprising number of new jobs illustrates the fact that a huge share of the jobs in our economy is not created by the latest innovation.