Something About Harry

WHO'S YOUR FINANCIAL hero? This should be someone whose qualities and character lend themselves to emulation in your own financial life.

Let’s set some ground rules here for picking a financial hero. First, your hero probably shouldn’t be the usual suspect: Warren Buffett. While Buffett is certainly a very successful investor, the investment game that he’s playing is very different from the one most of the rest of us are.

The same goes for folks like Elon Musk, Jeff Bezos and Bill Gates. People can certainly admire these titans. But they’re systems changers, not just people looking to do well in a particular industry. They’re as appropriate for emulation by common investors or business owners as is George Patton for someone wanting a standard military career.

Second, you probably shouldn’t be related to your hero. You would be too close to that person to see clearly. And if your potential heroes are your parents, they probably played the financial game 40 or 50 years ago. The rules have changed.

Your financial hero should be basically a normal person not related to you who exhibited extraordinary qualities. For me, that person is a guy named Harry. He’s about 10 years older than I am. While I’ve never met Harry—and probably never will—we actually have the same hometown, Erie, Pennsylvania.

Indeed, Harry and I went to the same high school: Cathedral Prep. When he and I attended a decade apart, Prep was all male, academically rigorous and full of hazing. Spending four years there was a rough-and-tumble experience in the 1970s and 1980s.

I imagine a 14-year-old Harry having English with the ruler-wielding nuns who taught me. I also think about Harry perhaps playing dodgeball, and giving and receiving wedgies. Harry probably did calculus and trig problems at the same blackboards I stood at.

After graduation, Harry—as most of us from Prep did—went to college. He earned a bachelor’s degree in business administration from Loyola University of Maryland and, eventually, a master’s in finance from Boston College. He got married and had a couple of kids, while working in the financial services industry in Massachusetts.

Harry was enjoying, by almost all measures, a successful professional and personal life. Then he did something truly remarkable. Harry uncovered the biggest financial fraudster in U.S. history: Bernie Madoff.

Madoff’s Ponzi scheme swindled investors—including actors John Malkovich and Kevin Bacon—of about $65 billion. In his work to expose Madoff, Harry Markopolos displayed several qualities that make him worthy of emulation in personal finance.

First, Markopolos did his homework and knew that, if something seems too good to be true, it probably is. Markopolos discovered that Madoff’s hedge fund was returning 1% to 2% each month to investors consistently. If there’s one rule in investing that I’ve learned, it’s that to expect consistent returns is foolish. Volatility is the norm. Using common sense and math, Markopolos realized almost instantly that Madoff’s returns were impossible to achieve in any legal way.

Being proactive in research and being able to recognize when somebody or something is promising too much are excellent qualities to have in personal finance. From television-celebrity whole-life insurance salespeople to sharky advisors, folks can and will promise almost anything to part you from your money. Being possessed of what Ernest Hemingway called a “bullshit detector” can help to make you safe.

Second, once Markopolos realized that he was right about Madoff, he believed in himself and his abilities enough to relentlessly pursue his goal of exposing the fraudster. From 2000 to 2005, Markopolos kept nudging the Securities and Exchange Commission to investigate Madoff. Initially ignored, he pursued his goal. It took Madoff’s sons confessing to the SEC in 2008 to finally bring down the fraudster. If the Feds would have listened to Markopolos, some family fortunes might not have been completely lost.

This kind of persistence is a great quality for an investor to have. It takes a lot of fortitude to invest in the stock market. You have to begin, and you have to keep doing the same thing over and over again for years and decades, to achieve a result. According to an article on the website Liquidity Provider, the market is up only about 54% of trading days each year. Having Markopolos’ tenacity can serve you well over a long investing career.

Third, Markopolos displayed courage. While the late Bernie Madoff spent his last years in disgrace and in prison, earlier in his life, he was quite powerful. Having given donations to the likes of Senator Chuck Schumer, now the Majority Leader, Madoff had friends in high places. Some of those friends included people in positions of power at the SEC. In addition, Madoff was once chairman of the Nasdaq stock exchange. To start accusing somebody like Madoff took a lot of courage.

This ability to control your fear will serve you well in investing. For example, even though I knew in 2020 that the absolutely gut-wrenching declines occasioned by the pandemic would reverse, there were moments in which I struggled to control very strong impulses. No doubt exists that these kinds of disasters will occur again. Having the ability to be brave in the face of overwhelming market losses is key to success.

Markopolos is a hero to me because he was just a regular person who stumbled onto something massive, and he had the internal fortitude to forge ahead with what he knew was right. He was smart, persistent and brave. I endeavor to bring those qualities to my own financial life.

Who is your financial hero or heroine? What qualities does he or she possess that you admire? For me, there will always be something about Harry.

Douglas W. Texter is an associate professor of English at Johnson County Community College in Overland Park, Kansas. Doug teaches a composition I course that focuses on personal finance. His essays and fiction have appeared in venues such as the Chronicle of Higher Education, Utopian Studies, New English Review and The Writers of the Future Anthology. Check out Doug's previous articles.

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