By Scott Holleran
Chicago’s foremost personal finance journalist, author and lecturer, Terry Savage, recently spoke with me about her career in Chicago business, finance and broadcasting. Savage, who appears on WGN Radio and TV, wrote bestselling books, including The Savage Truth on Money and The Savage Number: How Much Money Do You Really Need to Retire? The investment advisor began her career as a stockbroker and became a trader on the Chicago Board Options Exchange as well as the Chicago Mercantile Exchange’s International Monetary Market. Terry Savage, whose website www.terrysavage.com offers resources, commentary and answers, has worked with Pennzoil, Allstate and McDonald’s.
Scott Holleran: Do you have early Chicago memories?
Terry Savage: My parents and grandparents were from Chicago’s North Side, I went to Nettlehorst Public School, right at Broadway and Melrose. Lincoln Park Zoo and the Chicago Public Library were my two favorite places as a little girl—and Riverview, which will date me. We lived right near Lincoln Park Zoo. That is my favorite memory. Just going to the zoo with my family. A while back, I was on the Zoo’s board [of directors].
Scott Holleran: Did your education at University of Michigan shape your philosophy of money?
Terry Savage: This is interesting. When I went to college, I was very much a protester, I went to Michigan and fell in love with the campus. I [had] wanted to go to Radcliffe, but my parents couldn’t afford that. So they drove me to Ann Arbor one beautiful September Saturday and I applied and was admitted to [University of] Michigan. This was at a time of protest against the Vietnam War and [America’s semi-] capitalist system. My parents were shocked.
I won a Woodrow Wilson fellowship when I graduated, which paid tuition, room and board, to graduate school to get my master’s degree in American studies, history and economics. I was accepted at Yale, Stanford and [University of California at] Berkeley. I chose Berkeley because I wanted to protest [the Vietnam War]. I came back and lived at home to earn some spending money because [the fellowship] paid room and board and a couple thousand dollars. I answered an ad that said—I remember this clearly—“Secretary: light typing, no shorthand” at a prestigious LaSalle Street brokerage firm.
I was hired for $100 a week. I quickly was immersed in the world of the stock market. It was where everything I had learned about American history and economics came together. Pretty soon, instead of being a secretary for four [men]—they were all guys and the number one man in the office was named John Buckingham Elliott—Mr. Elliott quickly tapped me, with my Phi Beta Kappa key and college degree and everything, to be his assistant. Fall came and I contacted the Woodrow Wilson [fellowship] and said, ‘I’d like to postpone it a year. I’m getting some practical knowledge.’ I worked as Mr. Elliott’s assistant, and, by the way, John Buckingham Elliott—as in the Buckingham Fountain—was a wonderful gentleman. He was so smart. On top of that, one of his big clients was a man named Carl Vaicek, who ran a mutual fund—and it was like the top performing fund in the country that year—in the same building, at 135 South La Salle.
Whenever Carl would buy a stock for the fund, we would then buy it for all our clients. So John made people a lot of money. Pretty soon I was getting on the phone and saying, ‘well, John’s busy but here’s what he’s buying and here’s why he likes it and here’s what the earnings are gonna be’ and so forth. Now, they used to have groups of young men they trained to be brokers. I watched this and said, ‘excuse me, I’d like to train to be a stockbroker’. And they said, ‘well, I’m sorry, we don’t train girls.’ I mean, really, exactly what they said: ‘I’m sorry, we don’t train girls.’ [But they also said]: ‘We’ll let you take the correspondence course. If you pass the test, you could be a registered secretary, and we will give you a raise to $105 a week.’
So I studied and probably got a better education because I went to every department—I went to the bond department and asked them to explain municipal bonds. I went to the trading department and learned about bid and offer and I went to all the different departments—the research department—and, lo and behold, I passed the test. I said: ‘I really want to be a broker.’ John supported me. So, I started out as a broker. The next thing that happened was a bear market, so I learned a lot about stocks and how they can go up and how they can go down.
Scott Holleran: What year was that bear market?
Terry Savage: 1968 or 1969. So I was a stockbroker for a few years. Then the Chicago Board Options Exchange was launched. I was surrounded by good people and good stock ideas and the options exchange opened up. By then, I was married. Then, I was pregnant and decided I wanted to buy a seat [on the board]—with $10,000 that I had saved up—so I went for the interview, which was done in the Board of Trade. They started the options exchange in a dark, smoky boardroom—I was five months pregnant—so I sat at the end of the table kind of with my arms crossed in front of me. They were smoking, of course, and one of the men said, you know, the rule is you have to be on the floor. And I spread my arms out and I said—this is a quote: “This is a temporary condition. I’ll be there.”
Three months after my baby was born, they let me buy a seat. I went down on the trading floor and it was another lesson in markets and money. I realized that, as much as I knew and as smart as I thought I was, trading involves taking different kinds of risks. While I was down on the trading floor, Channel 26, the stock market television show, was broadcasting from the top of the Board of Trade building in a one-room studio. I was invited up there a couple of times. Then an opening came up. There was always a midday show and they asked me to come up every day and do a show. That’s where I found my calling because they allowed me to pick my own guests on any financial topic and ask questions. That’s how I asked all of the experts about markets, stocks, futures, commodities.
There was a guy who said you could predict the market—this is a whole subculture of people—and I asked how do you learn about this? He said, ‘I could teach you’. I said, ‘I have a better idea—why don’t we teach the course on whatever day of the week, every Monday—you come in and give a lesson.’ He said, OK, but I’d have to buy his book. So we announced it—then, Kroch’s and Brentano’s [bookstores] called and said, ‘how many people are taking this course?’ And we were inundated with orders—we had to postpone the start—and they ordered this book called Point and Figure Charting. I had a big easel with paper and he would draw lines and point when things were double tops and breakouts and flags and all the terms. We’re talking about 1975. That was my television start. Some years later, I sent a videotape of some of my interviews to Channel 5 and said, ‘you’re not explaining things correctly.’ That’s it. So began my television career.
Scott Holleran: You started broadcasting about money and finance at WMAQ?
Terry Savage: I started in January of 1979 at Channel 5 on the 4:30 news. I did an audition tape for them. The audition tape was about the fact that, in those days, everybody was buying big houses and women were going to work. I had to write something and I said, well, ‘if it takes two incomes to pay the mortgage, how are these houses gonna be filled with children if most parents have to keep working?’ I remember the script. They hired me. I was still trading over at the Mercantile Exchange—I was trading Treasury bills during the day and coming over in the afternoon, talking about things related to money and markets.
Scott Holleran: You had to have chutzpah or charisma to have those thoughts. What do you credit that to?
Terry Savage: My parents spent an entire life trying to figure out where I came from—I [am] first born, the first granddaughter, and I was [born] that way. I’m the same today as I was when I was five years old—as far back as I can remember.
Scott Holleran: Were you just curious about the financial world?
Terry Savage: I think my main attribute is that I could never take No for an answer. I’ll tell you a seminal moment in my conversion to spokesman for free enterprise capitalism. I was the secretary of the brokerage firm. Going back to my days as an anti-war protester, Dow Chemical was a huge target because they made Napalm. When I saw the symbol for Dow, I said I wouldn’t even buy Saran Wrap because Dow makes it—and someone asked, ‘you don’t use plastic wrap?’ I said, ‘oh yeah, I use Handi-Wrap.’ I remember where I was standing when the guy said to me, ‘Do you know that Dow makes both both Saran Wrap and Handi-Wrap?’ That was one of the world’s great revelations [to me]. I remember it all these years later. Somewhere between my protesting the war, which I understand why I did, frankly, and becoming a stockbroker, because I was a student of American history and realized that no system—I believe this today—no economic system has created as much opportunity and wealth as the free enterprise system. It’s not perfect. But compared to the [Communist] Soviet Union where people stood in line for bread or [Communist] Cuba, where they still don’t have power half the time—it came to me as an absolute fact that the free enterprise system has created more wealth, jobs and opportunity. I still firmly believe that.
Scott Holleran: Did you have a piggy bank as a kid?
Terry Savage: I’m sure I did. I grew up [in a neighborhood with] wealthy families and always felt a somewhat little bit deprived. Let me just put it this way: other girls had more outfits, more clothes, and, when spring came, they got spring cotton skirts. My parents said to me, ‘we’re sending you to camp and you need camp clothes, so you have to wear your wool skirts to school at the end of May,’ so I always felt, and I put this in quotes, somewhat deprived. It was very motivating to see people who had things that my family couldn’t afford. I had two younger brothers and my parents were relatively young. I didn’t come from the inner city or have to scrounge for food. By then, we lived in the suburbs. But I noticed that there were people who had and could afford more. I do think that affected me.
The secret of financial success is making your money work as hard for you as you work for it. I always say to people, I came from nothing. I mean—my parents gave me nothing. In fact, I helped my parents at the end. They left me nothing. I had a great college education that my parents paid for and no student loan debt. But my first job was $100 a week, shared a studio [apartment] and lived at home, rode my bike to the train station every day, and took a bus to La Salle Street.
And when I finally got an apartment downtown, I shared it with a Pan Am flight attendant and she’d be gone five or six days at a time. I’ve eaten my own cooking and [taken] all the advice in my books and speeches I’ve given. The more I realized it works to put your money to work for you, sensibly understanding risk, the more I was convinced that I could help other people learn that lesson. In hindsight, [factoring] all the statistics, it works—it’ll still work. It’s just that it requires—not denial—but a certain discipline. Spend less than you make and put the money to work for you. It’s probably more difficult today. The cost of necessities is much higher, but there are still plenty of people who figure out a way—maybe a second job, maybe living in your parents’ basement and not paying rent—and opportunity is still there. Nobody said it was gonna be easy. If it was easy, everybody would do it. [Having] the discipline to make your money work for you leverages your own hard work. Over the long run, you come out ahead.
Scott Holleran: Is there an industrial innovation or technology that comes to mind as the best means to protecting, saving and making money?
Terry Savage: The personal computer—and, later, the interconnectivity of it through the Internet—is just transformative, but you don’t need Terry Savage to tell you that. The computer took personal finance to another level. When I started in the brokerage industry, every company used those big loose-leaf notebooks. This was a long time ago and each company had a little writeup, and, every three months, they would send you the A’s and B’s and the next week would be the C’s and D’s and you’d take out the old pages and put them in this big—I mean, huge—loose-leaf notebook. If you wanted to look up a stock, you would go to the book which was on a big table in the front of the room. It was called the [Standard and Poor’s] S&P book and you would go through the pages and you had to make a Xerox copy of the page and put it in the mail to your client so they could get information. Now you can just go online to CNBC.com and learn all there is up to the second, including the news from this morning. That’s pretty transformative.
Scott Holleran: What’s the greatest challenge to your career?
Terry Savage: I don’t know. Most are behind me. I don’t know what’s ahead.
Scott Holleran: What was your experience when you went on the air that first time in January 1975?
Terry Savage: Inflation was just starting. Interest rates were starting to rise. I knew I could help people earn more [money] in their banks. I’ve always been very highly motivated. I was sitting there on the set and it never occurred to me that I wouldn’t be sharing the knowledge I had. Jorie Lueloff was anchoring the news. There was always a kicker story at the end of every news show in those days—an especially cute story about a kid who flew his kite or whatever it was. And I was trading Treasury bills. At the time, the only way you could get higher than four percent or 4.5 percent rate at a bank with a six-month [certificate of deposit] CD. That rate was set by the Treasury auction every Monday and, while 4.5 percent was what you could get in CDs, T-bill rates were up to seven or 7.5 percent. And I used to come to the station after trading Treasuries on the floor of the old Chicago Mercantile Exchange, and it suddenly hit me.
At 12:30 was the Treasury auction. I knew because we saw the markets [and] what the rate was gonna be, but they never announced the auction results until 7 o’clock at night after the banks had closed. So I said to the producer and Jorie, ‘I want to come on at 12:24, 12:25,’ as the last story in the show, and call over to my friends on the trading floor and report that they were trading at 7.35 percent.
So I’d go on the air and say, ‘rates are gonna be higher when they’re announced tonight so if you have a CD maturing today, wait ‘til tomorrow to renew it ‘cause rates will be 0.25 percent higher or 0.5 percent higher.’ On the rare occasion when the weekly auction was lower, I’d say ‘if your CD is renewing today, renew it right now because tomorrow the rates will drop by a little bit’—and it got to the point where they thought I was a genius. I just knew what information was out there. I once got a call from a fire engine company something or other, saying they had been out on a run. ‘What did you say interest rates were doing? We missed your forecast.’ I kept trying to tell them it was based on midday trading of futures.
Scott Holleran: What was the viewer reaction in those early months?
Terry Savage: People started to recognize me. I remember being shocked by that, just shocked. I hadn’t counted on that. In those days, people would write letters, there were no text messages, no emails—there was no website to post reaction.
After I [had] worked at Channel 5 for about three years came a bidding war. I wasn’t paid very much—it was OK but I didn’t know better—and my agent, Jeffrey Jacobs, who created Oprah Winfrey’s empire—he was [Winfrey’s] agent—and I give him credit to this day because he incorporated me and did a did a whole bunch of things set me up with my own. Jeffrey was negotiating between Channel 2 and Channel 7. Both wanted my services. So for the first time I got paid some real money and I went to Channel 2 to be with Bill [Kurtis] and Walter [Jacobson] and, after a year or so, the producer changed.
There was this wonderful but mean news director [at WBBM Channel 2], and you can quote me on this—I had dinner with her a couple of months ago—and she said for sweeps—that’s the ratings period which was a big deal then—‘We want you to do a story every day and we’re gonna call it Terry’s Tips and we want you to give [the viewer] money tips.’
So [the segment] was five days a week, every day. I knew it was gonna be a lot of work so I said, ‘suppose I wanted to write something up about it’ [and] she said to me ‘We’re not in the publishing business. We’re in the TV business.’ I had met the new publisher of the Sun-Times and I called him up. I was pretty well known on television by then I could talk to anybody and moved in those business circles. And I said I think I could write a column every day [and the Sun-Times] could print it in the paper. He said I’ll get it set up right away and then he said to me, but I want you to write an overall introduction to what you’re going to be doing and we’ll run that in the Sunday paper. I did the research for all these stories, then I wrote that introduction. I typed it out. I went over to the Sun-Times with it. The editors said thank you very much, and it was maybe Thursday or Friday, and I spent the weekend in fear of what they would change—and what it would look like—and what I would see in print because I was an avid reader of books and a collector of the idea of seeing it in print.
I remember going to the door and opening up the back door of my apartment and seeing the paper on the mat at the door, reaching down, getting it and seeing this whole full page spread with my picture. I remember being astounded. They didn’t change a word. They didn’t do anything. I [wrote] all those columns for that month, then I started doing it once a week and a woman named Kathy Welton of Dearborn Publishing came in to bring one of her authors, a guest. By then, I was doing a morning show I think at that time in addition to doing the evening show I did the morning cut in at 6:35 for the day. I taped those the night before. So I was doing literally two shows a day, every single day. And she said ‘I’ve been reading your columns. I said I thought if I put them all together, they’d be a book. She said, I was just gonna ask you if you’d like to write a book. And that became Terry Savage Talks Money, my first book. We had breakfast at The Pump Room and she had my first printed copy of the book brought in on a silver tray with a balloon—a helium balloon—and it’s one of those moments that reminds me of when my son was born, a moment of absolute wonder. I remember that moment my son was born—and when [my] book came in on that silver tray.
Scott Holleran: Do people come up to you on the street and either scorn or thank you for money advice? Did that—and does that still—happen, how do you deal with it and what’s the most common comment?
Terry Savage: I’m on WGN television just about every week. And of course on WGN radio for an hour at noon on Wednesdays with John Williams and in the afternoons with Lisa Dent. Not that many people recognize me, but I’m not walking around. Nobody’s walking around anymore. But people connect through my website, where they post questions and I answer them. One of the most rewarding things is that I’ve been doing this for such a long time that people write to me and say ‘forty years ago I listened to you and I did this or that and now I’m retiring.’ I got a lovely note from a gal who was a producer at CNN. And she said, ‘you came on years ago and told me I absolutely had to sign up for the 401(k) plan and I wasn’t gonna do that. I didn’t know what that was, so I’m retiring and I want you to know if it hadn’t been for you…’ and so forth. That’s great. The rewarding thing is knowing that over the long run [my work] made a difference.
Time leverages money. The most powerful tool for you in the world is compound interest or compound earnings. It comes upon you so slowly. Despite the ups and downs in the market, the long-term trend of the market is up, and people who just started putting that little bit away on a regular basis have benefited from the growth of America. My timing came just as a couple of things happened. Markets were deregulated. You weren’t stuck getting four percent [interest] in the bank. You could make moves. You could earn more and the interest went up and offset inflation. Second, in those years was when 401(k)s came to replace pensions and it was voluntary. People didn’t really understand that, so there I was saying you must sign up. You have to do this. And so the timing was perfect for someone to start offering advice because people were suddenly faced with decisions. It was always a 30-year mortgage, but then they became 15-year and adjustable mortgages. People were suddenly forced to make decisions: ‘Am I gonna save for retirement? How will I pay my bills now?’ People were suddenly given credit cards. That was the beginning. I mean, women didn’t get credit cards [in their own name] until the Seventies. All of a sudden people were faced with opportunities. Decision-making demands that they had not been raised to do and technology tools to enable them that intimidated them, too. So there you go.
Scott Holleran: What differentiates you from broadcast consumer advocate David Horowitz and others, such as ABC News consumer reporter John Stossel, is that you express enthusiasm for the viewer to make money. This goes back to your motivational technique—you aren’t anti-business; your premise is wanting the viewer to make money by opting into a voluntary fund contribution. Is this right?
Terry Savage: You’re saying that and I’m smiling to hear you say it. Yes, I think you’re right. I never thought about it. I have been—as you can tell—enthusiastic.
Scott Holleran: Were you offered opportunities to work for national broadcasts?
Terry Savage: Yes. I turned down CNN when they were forming. They wanted me to move to New York. When I first started they wanted to pair me with Myron Kandel and they said ‘but you have to move to New York’ and I said ‘No—I’m in Chicago and my child is in Chicago. I’m staying in Chicago.’ I was at the height of my career. I didn’t know what CNN was gonna turn into. I’ve never—I loved Myron—but I’ve never regretted it. I’m a Chicagoan.
Scott Holleran: Was it a practical matter of not wanting to pull your kid out of school, be disruptive as a parent and move—and were you married at that point?
Terry Savage: No, I was divorced. I could have done it. It says something about me. New York just didn’t appeal to me. I’m a Chicagoan.
Scott Holleran: Who’s your most influential broadcast journalist?
Terry Savage: Carol Marin. She once said to me that ‘if you’ve got something interesting to say, make sure you get pictures—and if you have great pictures, use them and say something about it. I didn’t understand television. I once did a another series for sweeps—places you could put your money—and I remember a very wealthy couple in Chicago who collected Oriental rugs. Those stories—stories that include people in their homes—were remembered. Television is a very visual medium. We take that for granted now, but in those days I had to learn. I also admired her code of ethics. I remember going to a luncheon once—probably the Economics Club—and I was sitting there eating lunch and she was covering it. She asked: ‘Are you gonna talk about this [on TV]?’ I said, ‘yeah, probably.’ She said: ‘You can’t eat lunch [as a guest] and be a journalist [without disclosure]. You have to stand in the back of the room.’
Scott Holleran: Phil Donahue recently died. Do you have any thoughts on Donahue’s legacy in Chicago broadcasting and the free press?
Terry Savage: One of the great thrills of my life was being on Donahue’s show. I was [a guest] a couple of times—once I was on about the Cabbage Patch dolls and once I [appeared] with [Chrysler boss] Lee Iacocca about the auto industry. Phil Donahue was so nice. The Donahue show taped in the same building at the time.
Scott Holleran: In her PBS series, bestselling author Suze Orman refers to one’s early money memories as fundamental to one’s approach to personal finance. What do you think of Orman’s approach?
Terry Savage: —My earliest money memory is my parents. They’re both dead now, so I can say—and I’ve never said this out loud before—that my earliest money memories were my parents fighting over money. I could hear the fight through my bedroom wall. In hindsight, I think that instilled in me a desire to have what I put in quotes as “enough money.” I realized that money was important. Somewhere deep inside of me was the sense that you needed to have enough money [to live]. I wanted to know how to do that.
Scott Holleran: That differentiates your broadcasting—it feeds the idea of motivation—
Terry Savage: —We still have people going bankrupt. We still have people buried in debt. We still have people struggling and not taking advantage of opportunities, but I think [personal finance broadcasters] have all been highly motivated the same way. We got it—we figured it out and wanted to share [the knowledge]. Helping people is not a commodity that diminishes you—it’s a commodity that enhances everyone’s well-being.
Scott Holleran: Would you consider doing a PBS series or a WTTW show?
Terry Savage: I did the obligatory show when when they raise funds and everything. My only desire now is to be helpful and useful. That’s what motivates me now. I have my ambitions. I don’t have ambitions for [TV]. Ever since I was a girl, I loved horses. I’ve always had horses. I have a bunch of horses. It’s the world’s worst financial investment, so I never tell people that—you sleep and they eat—but in recent years I’ve owned a big farm in Wisconsin. I sold that to the gal who was running it and she’s doing a great job. I have turned to rescuing horses. I have four horses I’ve rescued from the slaughter trucks, one of [which] I ride often. I’m proud of what I have contributed. My ambitions are to keep doing that as long as I possibly can.
Scott Holleran: Do you have a favorite producer?
Terry Savage: No. I’ve always pretty much produced my own segments. I’ve worked with some terrific people. There were always wonderful people at every TV station I worked for. I drove them crazy; I always wanted more time.
Scott Holleran: Do you have a favorite editor in newspaper or book publishing?
Terry Savage: This is a terrible thing to say but I would rarely let anybody edit me. I was insistent that my words come out just the way I had written them. I will take advice. I love my editors along the way. But pretty much what you see in print is what I meant to write.
Scott Holleran: What sources for daily news, financial or otherwise do you use?
Terry Savage: I’m attuned to many websites—many sources—
Scott Holleran: —But if you’re going to a desert island and can only take three—
Terry Savage: —if I’m going to a desert island, I’m not listening to the news at all. I heard Roger Ebert say something on the air once—that, when he was writing notes, not speaking out loud, the writing flows. It’s not a conscious act. I immediately identified with him. My best columns come out my hands on the keyboard. They write themselves. For the ones where I’m thinking or trying to make a point, sometimes I’m trying to explain how a certain form of annuity works, I have to get my research together. But the ones where I talk about what’s going on in the world, those come through me. When it happens, it happens. It could be late on Sunday night. It could be early on a Tuesday morning. I’ll think, wait a minute, I’ve got to write this down.
When I was in the seventh grade, my father made me take typing class seriously in case I didn’t get married and had to be a secretary. I was typing really fast—and on my old non-electric typewriter. So one of the great skills I achieved was being able to type. Now, when I’m writing something and it’s happening, it just happens. I look down and I go, oh well, there was 750 words. I mean, I’ll go back and change a phrase or two, but that’s it.
For financial news, I start with the markets. The market’s always the truth—where money agrees to disagree. And you see what’s happening in the bond market 24 hours a day. You see what’s happening in the gold market. You see what’s happening in the futures markets. So the markets are [my] central focus—and what’s moving them on a particular day. I start with the markets. Sometimes, I get up in the middle of the night to see what’s going on and what went on in Asia and what’s going on in Europe and I go back to sleep. I wanna know what’s going on around the world in the markets. I have CNBC on all day long.
It’s the kind of the wallpaper of my background, but primarily so I can glance up and see what’s happening with the 10-year Treasury, what’s happening with the S&P 500, what’s happening with the Dow [Jones Industrial Index], what’s happening with gold—like when a patient’s in the hospital and they have all those monitors on them and the doctors walk by and can glance and, as long as no bells are going off, they just look at all that and say, OK, the patient’s alive. That to me [means that] checking the markets throughout the day is critical. I was on radio today and I have a setup at home when I’mnn not in the studio where I have a connection right into the board at WGN. And so I’m talking with headphones on and I’ve got my iPad up and my computer up and I take a look. So the markets are my central focus. I’ll watch. I don’t watch much news. I find it depressing, to tell you the truth—from all viewpoints. I have the Wall Street Journal delivered but primarily for the editorial pages because if I don’t already know almost everything on the front page I’m out of touch.
Scott Holleran: In your experience as an author, what makes a bestseller?
Terry Savage: Hard work and a lot of promotion. I’ve had good sales for my books, but my books are meant for a purpose, like the recent book [on Social Security] that I [wrote] with Larry Kotlikoff.
Scott Holleran: What’s your next book or project?
Terry Savage: Social Security is gonna keep me busy for a while because we do need to fix the economic basis of Social Security. Smart people on both sides of the aisle could get together. There are solutions that have to be put in place for the next generation. People are living longer. The wage caps for Social Security payments haven’t kept up with inflation. There are sensible fixes just like they made in the early 1980s. They should focus on coming up with solutions.
Scott Holleran: Which literature is formative to your career?
Terry Savage: Atlas Shrugged [by Ayn Rand]. Atlas Shrugged was very formative for me. I read it a long, long time ago. I’ve read it several times. I’ll tell you what else—a book by [Chicagoland insurance businessman] W. Clement Stone—my dad was a salesman and had success through [adopting Stone’s] positive mental attitude—and I must have read [Stone’s] book four or five times over my lifetime. It’s about success through positive mental attitude. I admired him greatly. I interviewed him a couple of times. I danced with him on his 90th birthday. There’s a video of that somewhere.
Scott Holleran: Who is the greatest Chicago businessman in history?
Terry Savage: You gotta include [McDonald’s founder] Ray Kroc. You’ve got to include W. Clement Stone. You have to include John Johnson—
Scott Holleran: —to be clear, John Johnson of Ebony Jet, not George Johnson of the hair care—
Terry Savage: —George Johnson [of the Johnson Products Company, which owned Afro Sheen and sponsored Soul Train] was a great businessman, too. I think you would have to include Leo Melamed. You’d have to put Leo Melamed in what basically ought to be looked at as the Junior Achievement Business Hall of Fame.
Scott Holleran: You were involved in Junior Achievement, too—
Terry Savage: —and for a long time. I’m a big fan.
Scott Holleran: Who is the greatest unknown moneymaker in America?
Terry Savage: It’s hard to be unknown today. You know the headlines—Jeff Bezos and the tech entrepreneurs. But here’s a really interesting thing. I was down in Fort Lauderdale recently. There are yachts and yachts and yachts. There are mega mansions. There are people in America who made a fortune off the most mundane things. If you think that the wealth in America is concentrated among the billionaires that are making headlines today—America has created a lot of wealth for a lot of people. There’s wealth created in real estate. There’s wealth created in banking and financial markets and in the most prosaic inventions—in little things we don’t even notice and they churn out millions of them—and all those people [buy] yachts.
Scott Holleran: Are you a pragmatist or do you see your advice as a practical application of rational theories in money?
Terry Savage: Money per se is pragmatic. There’s no fooling around with money. The market is where money puts its mouth. You never have to guess if you are right or wrong. The market will tell you instantaneously. And then you have to say, OK, but what’s my time frame? I bought it and it went down, but is my time frame today when I [made] this decision—or is my time frame over the next 10 years?
Scott Holleran: What is your money philosophy?
Terry Savage: I believe that, while capitalism isn’t perfect, no system ever invented has done more to lift people—more people—out of poverty and give more people opportunity. I was taught a long time ago that capitalism is the unequal distribution of of wealth. But socialism is the equal distribution of poverty. I didn’t make that up. I heard that years ago and I believe it. Yep.
Scott Holleran: What are the top historic moments in Chicago financial history?
Terry Savage: Chicago is built on resilience, from its beginning through the Chicago fire through the market crashes. Chicago is home of the skyscraper. Chicago is a building city and always has been and our exchanges are the visible demonstration of not only our resilience but our creativity. That’s what’s so alive about Chicago. Chicago is always offered opportunity. Look at the chairman of the Mercantile Exchange, Terry Duffy. He started as a kid in the pits. Chicago has created more opportunities—we’ve been at the center of the free market—at the creation of free market. That’s what has always been attractive about Chicago.
Scott Holleran: It was a financial news reporter on CNBC—Rick Santelli—who founded the Tea Party movement in 2009 on a Chicago trading floor when he held up a copy of Atlas Shrugged during the 2008 government bailouts and said we need another Boston Tea Party. Do you agree?
Terry Savage: I know Rick. I’ve known Rick for a long time. I admire and like his style. I’m not about leading movements. As an individual, you deal with reality no matter what your political persuasion. You can argue politics all you want, but you can’t argue what the market is pricing—and you cannot argue the history that brought us to this point.
Scott Holleran: Besides you and Santelli, Chicago Fox Business contributor Jonathan Hoenig and other Chicago financial voices speak their minds. Any thoughts on other finance and money professionals in Chicago?
Terry Savage: No. I think we’re all playing in the same sandbox. We’re all trying to share useful financial news. It’s a big sandbox; there’s room for everybody.
Scott Holleran: Who are your heroes in money?
Terry Savage: I don’t think making money is heroic. What you do with money can be heroic. I don’t think of making money as heroic—I don’t think of it that way.
Scott Holleran: What’s the biggest surprise about money during your career?
Terry Savage: That first bear market. I was there when the Dow fell from over 1000 to an intraday low in 1974 of 570.01. Don’t forget, [this is when] when the first stocks we traded at the Options Exchange were called the Fabulous 50. They were the buy them and forget them [stocks]. That’s what the mentality was in those days. Those were the stocks that were first listed for trading. And it wasn’t just like one company had a problem. I was young. I looked around at all the boards all around the room—that was in the old lunchroom of the old Board of Trade—and it was very crowded, very hot. People still smoked on the floor in those days.
I looked around and it was a sea of red ink. All the options, all the prices of all the stocks were down. I looked up and said, ‘where did all the money go?’ And an old trader named Paul was standing near me. He looked down at me—I’ll never forget—and said, ‘well, my dear, it went to money heaven.’ I’ve seen money being made when it’s been a bull market and I’ve seen stocks going up and it was all about how much money did you make and how much profit and everything—and then it all just disappeared. It didn’t go from this guy to that guy. It was an insight. You asked me for what was a moment of insight. That was the moment of insight.
Scott Holleran: What’s the the single most rewarding moment in your career?
Terry Savage: It happens every time someone comes up to me and says ‘you don’t know me but way back you told me to do this—you told me to do that—and I listened and it’s changed my life.’ Those moments, when they come, are the most rewarding.
Scott Holleran: Do you own gold?
Terry Savage: I’ve owned gold since the first day it was made legal to trade gold in 1974 on January First. I have gold coins stashed away in a safety deposit box. I bought gold when gold was $65 an ounce.
Scott Holleran: Who is your bank?
Terry Savage: This sounds like a commercial, but, when I was a secretary and I had to open a bank savings account, Mr. Elliott said, go to the Northern Trust, all the wealthy people bank at the Northern. I still have an account at the Northern Trust.
Scott Holleran: If all of your wealth was expropriated by the state for the sake of social justice, what would you do?
Terry Savage: I can’t even contemplate that. This is America. That doesn’t happen.
Scott Holleran: If the president named you as head of a commission to broker a non-partisan deal on Social Security—
Terry Savage: —I would bring in terrific technological people to carefully modernize the technology of Social Security and convene a commission of smart people with no political bias to deal with the long-term challenges of funding Social Security. I would show mercy on all the people who need it the most. I know Social Security can be fixed. I have no doubt in the world that it can be fixed, but we have to start now. I would love to be commissioner of Social Security. I would do it for nothing. I would love to be the one to say stop fighting over it, stop messing it up, and let’s start fixing it the right way.
Scott Holleran: What is your proudest achievement?
Terry Savage: I’m proud that I’ve helped people along the way that I don’t even know. I’m proud that I made a difference. I am proud that I found my purpose in life and I’m humbled by that. I’m absolutely delighted to know—and, every once in a while, hear about the fact—that I’ve helped people. I’ve been given a great opportunity and great responsibility, and it’s humbling. I don’t know where the markets are going. I don’t have a crystal ball. I know that I can explain how personal finances work. I know I can help people avoid the traps of credit and debt and bad financial decisions. I know that it’s possible to succeed in America still today. So, I’m very pleased. It’s why I don’t wanna stop. I know that things change daily. Answers change daily. I wanna be alert and change so that I can give people the best possible chance of success. Nobody guarantees you success—they only guarantee you an opportunity. I wanna help with that opportunity.
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Award-winning author, writer and journalist Scott Holleran lived in Chicago for 21 years and writes the non-fictional Industrial Revolutions column as well as short stories. Read and subscribe to his non-fiction newsletter, Autonomia, at scottholleran.substack.com. Listen and subscribe to his fiction podcast at ShortStoriesByScottHolleran.substack.com. Scott Holleran lives in Southern California.
