On December 1, 2008, I landed at PDX with my computer, one suitcase and the determination to spend the next year discovering what makes Portland, OR Richard Florida’s favorite city in “The Rise of The Creative Class.”
I took a taxi from the airport to a guesthouse on SE Salmon, found work on Craigslist, bought a Tri-Met pass and began exploring Portland.
The next week, it snowed, and it snowed again and again for three weeks straight, something that hadn’t happened in Portland in 50 years. The city shut down.
I curled up in my bed and watched the global financial crisis unfold on TV. I ran the “tapes” of my 43-year career in accounting and finance again and again in my head. I had a front row seat to watch the drama unfold as each new trend in corporate finance rolled out.
I worked for Harold Geneen at ITT Corporate and John Reed at Citibank. I lived through start-ups, acquisitions, divestitures, corporate bankruptcy, leveraged buy-outs, etc. I watched corporate hierarchies grow taller and fatter. I watched compensation for the men at the top of the hierarchy grow exponentially when stock option plans were introduced.
Stock option plans escalated the earnings per share (EPS) game. The numbers needed “spin” and the accounting rules started to be “interpreted.” The EPS game became more important than sales or customers.
Suddenly it dawned on me – OPM is the culprit. I learned OPM at the Harvard Business School in the summer of 1982. Sam Hayes, Investment Banking Professor (now Emeritus), burst into the Advanced Management Program classroom and wrote OPM on the Board. Translation: Other People’s Money. You always use Other People’s Money – you never use your own money. OPM caused the Global Financial Crisis and brought the world financial markets to their knees, bankrupting countries, cities, towns, corporations and individuals and ruining lives.
Rooted Investing started as my personal journey. I decided I had to use My Own Money to test new investment models. Why would anyone listen to me if I were not willing to risk My Own Money?
Change is hard and emotionally challenging. I played the earnings per share game and ran money for foundations endowments. I was challenging the skills on which I had built a successful career.I hyperventilated for a week after I liquidated my Vanguard Mutual Funds.
Vanguard is an investor owned company, which is why Vanguard fees are the lowest in the industry. Michael, my Flagship representative asked me why I was leaving Vanguard after 25 years. I told him that I was tired of paying Jamie Dimon’s $23 million salary. Michael looked at the funds I was selling and said – JP Morgan is in many of your funds. Vanguard is listening and changing also.
Suddenly my whole life has changed. I am having fun with my money. I feel connected to my communities and my relationships have deepened. All around me, I see opportunities to create the world I want to live in. I have finally discovered why Portland, OR is Richard Florida favorite city in “The Rise of The Creative Class.”