TD Ameritrade Founder Joe Ricketts: “They told me it was impossible and I did it anyway”

It might sound strange, but the more people say I am not on the right track, the higher my comfort level goes. So not heeding naysayers feels kind of normal for me. It’s not that I don’t give a lot of thought to naysayers — I’m just not easily discouraged or put off an idea I think could be a winner.

I had the pleasure of interviewing Joe Ricketts. Having spent more than 35 years helping to establish and run the world’s largest online brokerage, Joe Ricketts today has returned to his roots, focusing on a wide range of entrepreneurial and philanthropic ventures.

A pioneer in the use of technology to revolutionize the financial services sector, Mr. Ricketts founded the company now known as TD Ameritrade, a securities industry leader that empowers self-directed investors with powerful and innovative investment tools and training.

After graduating Creighton University in 1968 with an economics degree, Mr. Ricketts began his professional career first as a branch manager at Dun & Bradstreet, then as a registered representative with Dean Witter. In 1975, he co-founded First Omaha Securities, a retail securities brokerage firm in Omaha, Nebraska. Mr. Ricketts recognized that featuring negotiated commissions would allow the firm to take advantage of the newly deregulated discount securities market. Under Mr. Ricketts’ leadership, First Omaha Securities grew quickly and, through the use of innovative technology and marketing, evolved into TD Ameritrade. Today TD Ameritrade manages hundreds of billions of dollars in client assets and leads its competitors with hundreds of thousands of trades per day.

Since 2008, Mr. Ricketts has devoted himself to a variety of entrepreneurial ventures. He has also actively engaged in philanthropy through Opportunity Education Foundation, The Cloisters on the Platte Foundation, The Ricketts Conservation Foundation, and The Ricketts Art Foundation.

Thank you so much for joining us Joe! Our readers would love to ‘get to know you’ a bit better. Can you tell us your ‘backstory’?

I grew up in the small working-class town of Nebraska City and have lived in Omaha for most of my life. My father owned his own construction company in the days before power tools on the job site, and I saw his incredible work ethic throughout my childhood. Many of the values I learned in those early years anchored the decisions I made later in life.

I’m a lifelong entrepreneur and workaholic. I was in the third grade when I got my first job, which was as a janitor’s assistant. I quickly learned to love the thrill of watching my hard work turn into cash savings. When I was a kid who wanted a new bike, I asked my father if I could have one. He said I could as long as I made my own money to pay for it. I held jobs as a carryout boy, clerk at a grocery store, and much more. These jobs were a sort of parallel schooling for me.

After I graduated from Creighton University in 1968 with an economics degree, I started as a branch manager at Dun & Bradstreet and then went on to become a registered representative with Dean Witter. I took my first real chance on myself when I co-founded First Omaha Securities, a retail securities brokerage firm in Omaha. With a lot of hard work and determination, teams of dedicated employees, innovative marketing, and, above all else, grit, the company evolved into TD Ameritrade.

I’ve long thought that starting a business is like exploring a new frontier. There will be risks, failures, and setbacks, but also incredible opportunities.

I have been blessed to be married to my wonderful wife Marlene for over 50 years. Each of my children has gone off in their own direction professionally: Pete into politics, Tom into business, Laura advocating for equal rights for gay people, and Todd working for conservative causes. But watching my children work together to operate and manage the Chicago Cubs has been a source of real pride for me.

Are you working on any new or exciting projects now? How do you think that will help people?

On the philanthropy side, I’m excited about the work we’re doing at Opportunity Education, the foundation I established to help young people around the world have access to better educational opportunities. Quest Forward Learning is Opportunity Education’s comprehensive high school program that teaches young people rigorous academics along with the skills they need to succeed in a rapidly changing world. We recently expanded our Quest Forward Learning Tanzanian network by 18 schools. Opportunity Education reaches over 1 million students throughout the world, and so far I’ve invested more than $70 million and a lot of my time in the program.

I’ve continued to welcome visitors to The Cloisters on the Platte, an Ignatian retreat center I founded near the Platte River in 2017. The Cloisters brings the power of quiet reflection to people seeking spiritual renewal. I am proud of the diverse visitors we have received since we opened, and I love hearing their feedback about how meaningful it is to attend a weekend of silent contemplation.

And then there’s the Ricketts Conservation Foundation, which I established to promote conservation of our wildlife and wilderness areas for future generations. Among our current projects is one we’re doing with Yellowstone National Park and the University of Colorado to study the Clark’s Nutcracker — a very important little bird that is an essential part of a healthy Whitebark Pine ecosystem. Given the importance of this project, the Ricketts Conservation Foundation is working with Cornell University’s School of Ornithology to document the work.

On the business side, I have several exciting things underway, including businesses I operate myself like The Village Pie Maker, Best Bison restaurant, High Plains Bison, The Splendid Sauce Company, and Hugo Specialty Foods, and investments I am making in other entrepreneurs who I feel have the potential to build important companies.

In your opinion, what do you think makes your company or organization stand out from the crowd?

Vision. It sounds like a “full of yourself” word but if you don’t have it, your company or organization isn’t going to succeed. When it comes to vision, I try to anticipate what customers want before they even know they want it. I learned this lesson in a big way with Ameritrade — I bet that a portion of brokerage customers would prefer to pay less for a no-frills brand of stock trading. I was right. And I bet again later that those same customers would like trading over a touch tone telephone and then over the Internet. Focus groups all told me I was wrong. I ignored those focus groups and it turned out pretty well.

Today, I see some big changes happening in our demographics — through innovations in science and a rising standard of living, our population is living longer. Those people like eating steak but want to feel good in old age so I’m investing heavily in bison — a red meat that’s tender and delicious but has less fat than chicken. I think there will be a big market for bison because people like burgers and steak.

Ok, thank you for that. I’d like to jump to the main focus of this interview. Has there ever been a time that someone told you something was impossible, but you did it anyway? Can you share the story with us? What was your idea? What was the reaction of the naysayers? And how did you overcome that?

Almost everyone told me Ameritrade would fail. People said there was no way to be successful charging customers a fraction of traditional commissions for no-frills stock trades. They said that even if the idea worked, Merrill Lynch, which was the 500-pound gorilla in brokerage, would launch a competing model and crush us. I wasn’t sure, but I suspected there was a deep enough market for no-frills stock trading that we could build a good business. As for Merrill Lynch, I never worried — I knew the full-service brokerages wouldn’t be able to upend themselves and compete on price; they just couldn’t kill the thing that had made them successful.

If you believe in something, never let people talk you out of it. The best ideas will often get a lot of pushback, and you will often have to fight for your ideas and visions.

In the end, how were all the naysayers proven wrong?

In the early years, our entire operation was an experiment in keeping costs low so we could reinvest our earnings back into the company. I personally was still cleaning the bathroom on Saturdays, so we didn’t have to hire a janitor. We trusted our idea, worked hard, and kept innovating.

The naysayers were proven wrong as Ameritrade realized my prediction that one day we would be the largest broker as measured by trades per day. Today the company has more than $1.32 trillion in assets and more than 11.5 million customer accounts. And our announced merger with Schwab will mean that the company has reached a scale to take on all of Wall Street, including the Merrill Lynchs of the world.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

For me, it starts with where I grew up. My family, my school where the teachers pushed me, and Nebraska City where people took an interest in one another. These experiences did more for me than I understood fully at the time.

After that, I could never have built the company without the faith and financial support from family and friends who invested early on. Among these were my friends Jerry and Patty, who volunteered to loan me about four thousand dollars they got by cashing in their life insurance. Years later, when Ameritrade went public, I wrote them a check for a million dollars, and that was only part of the value of their shares.

But I’m most grateful for my incredible wife, Marlene. The unfortunate side of working hard to grow a business is that you have to make sacrifices. I had to sacrifice time with my family. Not only did Marlene primarily take care of our kids, she also worked at Ameritrade, helping to make the company the success it eventually became. She contributed so much on a personal and professional level, and I’ll always be grateful to her for that.

It must not have been easy to ignore all the naysayers. Did you have any experiences growing up that have contributed to building your resiliency? Can you share the story with us?

It might sound strange, but the more people say I am not on the right track, the higher my comfort level goes. So not heeding naysayers feels kind of normal for me. It’s not that I don’t give a lot of thought to naysayers — I’m just not easily discouraged or put off an idea I think could be a winner.

If I am not exposed to business risk, I don’t feel good; I can’t really sleep at night. I don’t want to bet on a football game, but I feel energized when I am able to bet on a business idea I believe in.

Based on your experience, can you share 5 strategies that people can use to harness the sense of tenacity and do what naysayers think is impossible? (Please share a story or an example for each)

• Find an unmet consumer need and meet it better than anyone else could imagine.
• You’re going to fail, make sure you learn from it when you do.
• You need strategic vision — it’s easy to lose sight of the big picture when you’re fighting house-to-house.
• You have to make sacrifices to succeed.
• Find and rely on great people.

What is your favorite quote or personal philosophy that relates to the concept of resilience?

It would have to be the Thomas Jefferson quote, “I’m a great believer in luck, and I find the harder I work the more I have of it.” While there’s some debate about whether Jefferson actually said this, I love the message. I titled my memoir “The Harder You Work, The Luckier You Get,” after this quote because it is true. In business and in life, you will face obstacles that require resilience to overcome. The harder you work to overcome those obstacles, the luckier you will become.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.

Capitalism. No other movement has had a greater positive impact on mankind. Sound crazy? It’s not. Capitalism has raised countless people out of poverty, put food on tables that would have otherwise been bare, led to innovations in medicine that have saved lives, and produced one of my favorite inventions: the cheeseburger.

Capitalism is what creates jobs and makes the economy expand. It’s what allows individuals to grow game-changing businesses from nothing. And I believe it can continue to produce enormous good throughout the world.