Chuck Schwab: Journey to His Sweet Spot

Charles “Chuck” Schwab went through some very low moments in his mid-thirties. Recently divorced, he experienced a period of deep uncertainty about what to do professionally. He enrolled in law school at night in an attempt to follow in the footsteps of his father and grandfather. After just three weeks, he realized he lacked the required reading and writing skills and dropped out.

Chuck had struggled with reading all his life, but not until his early forties did he learn he was dyslexic. Although dyslexia caused him difficulty in school, he always knew he was good at math. So he began working part-time for an investment firm and discovered his interest in investments and his knack for investment research.

Like many leaders, Chuck needed time and experience to determine what motivated him. Eventually, he turned his passion for investments into building a company that would democratize the entire brokerage industry. Chuck’s motivations and capabilities finally came together at 37 when he founded Charles Schwab & Company.

Chuck traces his motivations to his upbringing in the post-Depression era. Times were tough in the small farming community of Woodland, CA, where he grew up during the 1940s. During World War II, his family used ration stamps to buy food. Chuck’s parents struggled their entire lives to be financially independent. “We were still suffering from the hangover of the Depression years,” he recalls. “My father taught me the importance of being independent. I was motivated to be financially successful because I didn’t want to have my life limited by resources.”

When the Securities and Exchange Commission deregulated brokerage services in the early 1970s, Chuck saw his opportunity to start a company. Before that time, stock market transactions went through large brokerage firms that charged fixed fees. Without competitive rates, many Americans could not afford to participate in the stock market. In 1974, Charles Schwab & Company entered the market, reducing brokerage commissions by 75%. Before long, individual accounts such as 401(k)s and IRAs were commonplace. “If you knew what you wanted to buy or sell, we could do it very efficiently. We’d complete the trade for a small commission without the interference of some hotshot broker.”

The unfairness of brokerage industry practices that existed before deregulation touched a nerve deep inside him. In his interview, Chuck’s face reddened and his hands gestured forcefully when he began talking about how Wall Street brokers took advantage of average American investors. “I always put the customer on top of a stool whose four corners are value, customer service, technology, and best price,” he explained. “Wall Street flips the stool over, sitting on top of the stool with the client underneath.” Leaning forward in his chair, he exclaimed, “Let me tell you, it was a den of thieves. Whatever the dealers wanted, they got.”

In a capitalist society, financial independence is fundamental. We are blessed in America with economic freedom and freedom of choice. I wanted to make Schwab a fully democratic place where people could come to us, disclose what they wanted, and get the best package available at the lowest cost, without the conflicts of interest so prevalent in the brokerage industry. Wall Street should be like your doctor, focusing on your interest, not its interests.

Chuck’s strengths, talents, and motivations came together when he founded Charles Schwab. He combined his investment research skills with the persistence and resilience learned from years of suffering with dyslexia. Building a company with a cause in which he passionately believed, he has helped millions become more independent while achieving financial independence himself. His company is an American icon, with more than 21,000 employees and a market capitalization of $158 billion.

Chuck Schwab’s passion for helping Americans achieve financial independence is an intrinsic motivation that in the end made him wealthy. His life exemplifies the importance of discovering your sweet spot. You need to know what motivates you and have a realistic understanding of your strengths and weaknesses so that you can put your strongest capabilities to work. When you do so, you will discover the sweet spot of your motivated capabilities.