Today I’m joined by Dave Goetsch, the executive producer and writer for “The Big Bang Theory.”
Dave has battled with anxiety around money and investments for most of his life.
In fact, he sat in cash through 2008/2009 convinced the world was going to end.
Eventually, he latched on to an investing philosophy that shifted his mindset and alleviated his stress and worry.
Dave has also found a unique way of applying investing lessons he has adopted over the years to current events we are up against today.
If you’re nervous about the financial markets and the global economy, you are going to love this episode.
How to Listen to Today’s Episode
Episode Links & Resources:
- 👉 Get Your One-Time Retirement Plan
- Dave Goetsch
- Dimensional Funds
- Learn More [Dimensional Website]
- A Transformed Investor’s View of Market Volatility [By Dave Goetsch]
- The Investment Answer by Gordon Murray [Book]
How to Manage Stress & Anxiety During Volatile Markets With Dave Goetsch
Taylor Schulte: Hey everyone. Really quick before we start the show. In today's episode, we mention one of my favorite books, The Investment Answer, and I'm giving away 25 free copies to our listeners given recent events. These will be Kindle versions of the book.
Here's all you need to do. Grab an iPhone or an iPad and leave an honest written review in the Apple Podcast app. Not just a quick star rating, but a written review of this podcast. Take a screenshot of it and email it to me at email@example.com. Thanks so much, onto the show.
Dave Goetsch: This biggest idea of uncertainty is crippling. As humans, we're not good with dealing with uncertainty, and I don't know if we've ever had more uncertainty than right now, so it's a legitimate anxiety everyone has.
Taylor Schulte: Welcome to the Stay Wealthy Podcast. I'm your host, Taylor Schulte, and today I'm joined by Dave Goetsch, the producer and writer of The Big Bang Theory, a show that was nominated for 46 primetime Emmy Awards.
He was also the executive producer for Third Rock from The Sun, and you might be wondering why a successful Hollywood sitcom writer is on a retirement and investing podcast, but I promise you, you are in for a treat today.
Dave has had quite the journey in the finance world and he's learned the hard way what not to do with his investments. He battled through severe anxiety through 2008 and 2009 and eventually latched on to an academic philosophy to managing money that really shifted his mindset and helped alleviate a lot of his stress and worry about investing in the markets.
Dave also has a unique way of applying investing lessons that he's learned over the years to current events that we’re up against today. If you're nervous and anxious like everyone else in the world right now, you're really going to enjoy this episode.
For all the links and resources, head over to youstaywealthy.com/67.
So my first question, my dad is a raving Big Bang Theory fan. We buy him the t-shirts at Christmas time. He loves this stuff. So I reached out to my dad before this interview. I said, what do you want me to ask Dave here? I don't know what this means, but I'm going to ask you. So ask him if he can tell you how rock paper, scissors, lizard spock goes.
Dave Goetsch: So for people who might not know what that is, rock paper scissors is the old game we grew up doing and somebody on the internet, I don’t know, 15 years ago or so, came up with rock paper scissors lizard spock.
And so in maybe the first season of Big Bang when we were writing it, Steve Ro, who was one of the original writers and became the of Big Bang and now is the of Sheldon, wanted to into the show.
And there were some incredible challenges for Jim Parsons as an actor with these monologues that we gave him and the Rules of Rock Lizard Spock is one of the most elaborate, and if you ask him, he will say he can't remember them either because they are so elaborate and I'd have to look them up, but they're on the t-shirt and it's always not just paper covers rock, but it's like Spock mind melt.
The details of it go on and on and on, and it's a delight. And in fact, the first time it was on the air as writers, we wanted to make sure it didn't seem like we made it up because there was somebody from the internet who had created this.
So in a later episode, we cited the creator of that because we all thought it was so cool and so funny and we didn't want it to seem like we stole it from somebody as opposed to we were using it the way Sheldon would've read it on the internet and used it himself
Taylor Schulte: Too funny. Well, Dad, I hope that satisfies you. While we're on it, we're going to talk about some great stuff in the finance world and investing, but just while we're on it, I would just love to hear from you personally, how did you find your way into becoming a writer for the Big Bang Theory?
And then maybe a second question on top of that, I'd also be curious what's changed with sitcoms back then to today? Has there been a big shift? Has there been a big change? What's the difference that we're seeing today?
Dave Goetsch: So I've been a sitcom writer for about 26 years. I started as a staff writer with a partner on The Rock from The Sun, the John Let's Go sitcom in the nineties. And my partner Jason Van and I worked there for five years and we started as staff writers and by the end we were one of the executive producers and showrunners. And that was a period in the late nineties when there were tons and tons of sitcoms.
NBC had Thursday Nights was the most watched shows, and it was a time of great opportunity for sitcom writers. And for me, the reason I became a sitcom writer, I knew one guy who'd, who was older than me and had gone to college, to my college and he had become a writer on Cheers, and he described what it was like to be a sitcom writer writer.
He said, imagine that you sit around in a group of 10 people in a room and they bring you lunch and they're all funnier than all of your friends, and you try to make each other laugh and you write these little plays that get recorded and your grandparents get to watch it at home and you get two months of vacation a year and they pay you really well.
So I was sold on that idea. I just didn't realize how hard it was going to be to get that job. It's a pretty sought after job. So I've been super lucky in that I was able to do that for five years on Third Rock in the Sun.
And then once you are working on the show, you're always trying to create your own show. And so I did that for a few years and it's really hard to do and had some little successes but nothing longstanding.
And so when I read the pilot for the Big Bank Theory, I loved it and I got to see a cut of it, and I just felt like there was such magic between all these actors. And I remember even telling Bill Pretty in that first meeting, this show that he and Chuck Laurie had created was the kind of show I had always wanted to make, but never had been able to.
And so I was dedicated to trying to be a part of it. And then luckily I was and worked on it for all 12 seasons, which was just a really magical, magical time. There is a chemistry and a lightning in the bottle quality to when these shows work and no one's quite sure how to do it again. And when it happens, it's just so special.
And I think looking back, one of the things that I'm so grateful for was how that show is able to grow and how we were able to add new characters like Amy and Bernadette and really build out that world and tell the love story between Sheldon and Amy slowly.
And so we always said on the Rock Sun that we'd never have an opportunity like that again, and I can't believe that I've been lucky enough to have two chances to have these long running shows and tell these engaging stories over more than a hundred episodes. It's just the most fun.
Taylor Schulte: Is there, and this might be a hard question to answer, but is there a single episode that's your absolute favorite or just a moment of working on the show that just sticks with you?
Dave Goetsch: To this day, there are literally hundreds and hundreds in terms of working on the show. So a Multicam sitcom like that shows like Friends, Everybody Loves Raymond. We have a five-day production schedule and we have a table read on the first day where the actors say the words for the first time around a table and all the writers mark up and say, let's fix that joke and let's cut that part.
So we put out a new script that day and then the actors rehearse on that second day and we go to a run-through where we see it on its feet and we get a chance to rewrite it again. And then on the third day it's called the Network Run Through.
Typically that's when the network comes and they might give their input. And so we were lucky enough to have Stephen Hawking on a couple episodes and he was a big fan. And so I think it was the episode where we were actually, we shot him at his office at Caltech because we weren't going to ask him to come to Warner Brothers and Burbank, he wanted to see a run-through.
So he asked if he could come and we were thrilled and absolutely, so those would normally be Fridays at one o'clock. So it was a Friday at one o'clock and he came and he brought his best friend Thorn, who a couple years later won the no prize in physics and they watched the run-through.
But that particular episode, episode had Simon Helberg who plays the Walowitz character imitating Stephen Hawking. And he had a really good impersonation of it, but Simon didn't want to offend Hawking. And they had asked him and he was like, oh no, no, great, go for it. Go for it.
So there was this just incredibly surreal moment of standing all the writers standing a few feet from Simon Halberg doing this hilarious impersonation of Stephen Hawking while we looked over at Stephen Hawking watching this, and he just had lost so much control of his body, but you could see the laughter in his eye.
He loved it, and what an incredible moment. So grateful to have that. And then I'd say my favorite episode is the last episode where Sheldon Mamie win the Nobel Prize, and I just love it. We were always talking about trying to stick the landing and I'm just so happy with the way that episode turned out.
Taylor Schulte: Very cool. I appreciate you sharing all that. We both know this is a finance and investing podcast and it feels weird to pivot from here, but you do have an incredible experience to share in the investing and finance world, especially given what we're going through today.
And before we get to current events, during another interview, you made the following comment you said the markets haven't changed, they still go up and down. The difference is I don't anymore. And I love that quote, and I'd love for you just to talk to us a little bit about what you mean by this and then maybe go into when and how your investment philosophy shifted.
Dave Goetsch: Yeah, absolutely. So I took economics in college. I took it from, I went to Yale. It was from a guy Nord who went on to win a Nobel Prize, but nobody talked about personal finance. Nobody talked about mutual funds or how to be a long-term investor.
And so my experience of looking at investing was something that seemed like it had to involve market timing. You had to know when to buy and when to sell, and it seemed like you had to know how to predict the future. And that intuitively was magic to me.
I just didn't understand how anybody could do it. And I had a lot of friends who went into finance and I didn't think they were particularly magical in their ability to predict the future. So that coupled with this just anxiety that I have about things in general meant that I rode the ups and downs of the market even when I didn't even have any money in the market.
So I remember the Asian financial crisis of the nineties, I remember the craziness of the tech boom and by the time 08, 09 happened, I was all in cash in my retirement. I thought none of this made sense and it seemed like the world was going to end and it kind of did for a couple days or a few months it seemed like, are we going to come out of this?
And for me, that was almost like confirmation of, yeah, I knew this never worked. I knew these guys were trying to sell snake oil and the market did come back and I started to have a family and realized that I needed a plan.
And so I was lucky enough to finally get introduced to this idea of having a broad basket portfolio, being a long-term investor, learning about the academic research behind investing, which points to how you don't have to know what's going to happen to maximize the chances of having a positive outcome.
And the more and more I got into this, the more and more relief that I felt, I think that passion around it was because I was feeling so much relief and my instinct was I wanted my friends to feel this way. I know how bad that feels and I don't want to feel like that again, and I don't want other people to feel that again.
There is another way to invest, but it does require some things that we don't like to think about where we have a plan, but we don't know the exact outcome where we have to accept a certain amount of uncertainty, where we look at the range of possible outcomes.
And when I finally got a financial advisor and he started talking about that, it was, I mean, some people would be like, yeah, I went and I figured out what to do for my retirement, and that was that, and that's totally about fine.
But for me, it was much more impactful in how I found myself kind of day to day being less stressed and my relationship to the news changed. Because right now with what's going on in the markets, apart from things going on with the virus and everything else, but just in terms of the market ups and downs, I would be thinking, here we go again.
And in some ways this is a big change and there's tons of volatility and it's similar in some ways to past downturns and in some ways it's different. So there is a legitimate way you could say, here we go again. But that's not what it feels like to me. And that has been so powerful.
Taylor Schulte: You really understand the financial markets, like you're sharp, you understand this stuff, you've studied it, you've got a background, an educational background in it. I know you've read The Investment Answer by Gordon Murray, which is one of my favorite books around investing.
To me, it sounds like you could manage a lot of this on your own probably, but you mentioned that you have a financial advisor. Why do you have an advisor? How does he or she help you and is something that he or she is doing right now during this time that maybe someone looked from the outside looking in wouldn't realize an advisor is helping with?
Dave Goetsch: Well, I mean, why wouldn't you have a financial advisor if you have a chunk of money that you want to try to grow as much as possible to meet your goals for retirement, for college, for whatever?
I'll say my financial advisor, what's incredible about having that person is you can always pick up the phone, you can always call thinking about if you're going to buy a house, what makes sense. If you think about a few years ago I got divorced and that was very technical and a financial advisor was incredibly valuable in just being able to be that person who you could talk through those things.
And then the thing that I'll always be grateful for is I got lucky to be on the show, the big bank theory that ran for a while and I was able to make my own defined benefit plan, and I had no idea what that was.
Who knows what a defined benefit plan is, but the idea that during years when you are making good money, you have some extra leftover and you could create your own retirement and really have a big impact on those later years, I've yet to meet anybody who's set up their own defined benefit plan.
Taylor Schulte: But you kind of have to be an actuary, I think, to get with that to actually do it.
Dave Goetsch: To actually do it. So you literally do need somebody to do that, but every friend of mine who gets an overall deal with Netflix or Fox or whatever, those things where you're like, Hey, for the next three years you're guaranteed this big chunk of money because of the success you've had leading up to this, I literally texted saying, congratulations, you needed to find benefit plan.
Taylor Schulte: What advice would you have for listeners right now who are really struggling with current events, struggling, maybe how you were struggling in oh 8, 0 9? Is there anything that works really well for you? And maybe a better question is how are you feeling right this moment? You mentioned that you're not as anxious as you were. What's helping you really get through that?
Dave Goetsch: Someone described this moment as having three big parts, and it probably is maybe even more than that, but there's a health crisis happening and people are worried about themselves, their parents, their loved ones, America, the world.
So there's that health component. And then because of the shutdown, there's this question about jobs and just all these giant unemployment numbers and what the future of that is. And then there's the third part, which is my long-term investments, my retirement and stuff like that for the markets.
And so I feel like the markets piece I have figured out in my head, that's not the part that's causing me stress because this is money that I don't want years. I'm sympathetic to somebody who is looking at that market go up and down and looking at how much money they have. But this is why you need a financial advisor because the asset allocation part is so crucial.
If you are 65 years old and you want to retire in five years, you shouldn't be 80% in stocks, you should be whatever the advisor says, 80% in bonds. This asset allocation thing is all about the risk that you're willing to take.
But for me, that risk is all about what's your timeline for it? So 20 years from now, I don't know how much that money in my portfolio is going to be, but I dunno what else to do besides what I'm doing to get the best outcome.
So the finance part is the stuff that gives me the least amount of stress in terms of the investing part. The job stuff is legitimate. I live in Hollywood, I work in Hollywood, it's not working now, when do we get back to work? And I'm not sure. And so that is a totally legitimate anxiety, which is unlike anything we've experienced before.
The thing that keeps going through my head is how can I shoot a scene with two actors who are closer than six feet from each other? So what's the process? When do we actually get to do that?
And I think there will be solutions and people are working really hard to try and figure that out, whether it involves testing and vectoring and all those things that we're reading articles about. And then this idea of health is also completely legitimate too.
So it's not to minimize how much, I don't want to minimize how much anxiety I have. I'm scared like everybody else, but at least there's a framework to help with the finance part of it. And then what's interesting for me is that I find that these tenants of investing have these applications to these other problems.
So for example, this health thing, we're reading all these estimates and it's either X or it's Y, and the numbers are giantly different. And I just go back to thinking, well, these are all different models. Models are not reality.
We know from all the quants that have practiced all their models that you can backtest and get kind of whatever data you want and that you're controlling with only so many variables. And this models, what is that line?
It's like models are not meant to predict the future. They're meant to give you an understanding, a deeper understanding of the potential outcomes. And that's what these models are doing. They suggest that if you do nothing, it's going to be really bad. And if you do a lot, then it'll probably mitigate or lower the impact.
So rather than being so frustrated by how come nobody knows what's going to happen because of all this thinking I've had about investing, it makes sense to me why these models wouldn't have the strategy. And so they all kind of reinforce one another.
This biggest idea of uncertainty is crippling. As humans, we're not good with dealing with uncertainty, and I don't know if we've ever had more uncertainty than right now. So it's a legitimate anxiety everyone has.
Taylor Schulte: Yeah, and I want to mention, you touched on a lot of this already. You wrote a great op-ed piece for CNBC this last week, which I'll be sure to link to in the show notes for everybody applying investing lessons to current events.
And you broke it down into this four-part process, which you just kind of touched on, which is starting with science, accepting uncertainty, knowing your risk tolerance and being a long-term investor. And there's just something about kind of breaking that down really simply and reading through it is extremely helpful.
Again, I know you already touched on some of this. Is there anything else you want to add to that around applying investing lessons to current events?
Dave Goetsch: Yeah, just for me, and not that this is the answer for anybody, but I hope it might be helpful to somebody with investing, and we did this on big bank theory, those guys are all physicists and Chuck, we used to pitch him a story and then he would write back, these guys are scientists.
And sometimes it would make sense what he was referring to, but I think he was going back to these kind of core first principles of who these characters are and how they looked at the world and they looked at the world through the lens of science. And so if it's with investing or if it's with this virus, what's the science? What do we know?
But with all this stuff, we don't know everything. So then you're left with what do I do? And for me, like in 08, 09, and before that, that was the paralyzing part, which was, okay, we know some stuff but we don't know so much that I don't know what to do.
And the trick for me getting past that was this idea of how much do we know that's kind of now the part that we don't know. That's an uncertainty that we're going to have to come to terms with. How do you come to terms with it by controlling what you can control?
Where I'm at home right now with my family, I'm not going out doing all the things they tell me to do. I'm controlling what I can control, and then that can feel like it's not enough. And so for me, that last piece is feeling like the importance is to be a long-term investor in life and thinking about this virus.
We don't know where we're going to be in three months and we don't know where we're going to be maybe in a year, but 20 years from now, five years from now, two years from now, we're going to have a better handle on what this is. We might have a vaccine, we might have antivirals going back to the achievements of science.
And so none of this is meant to be a panacea. None of it is an answer. But what helps me is having a framework to identify where my anxiety is. People talk about, David Booth was explaining that basic pricing mechanism, that what's a stock price? The stock price is made up of two things. It's made up of the expected returns of that company and the uncertainty around those unexpected returns.
Taylor Schulte: I love all of what you just said. And by the way, if people know David Booth, David Booth is the chairman of Dimensional Fund Advisors, a firm that I absolutely love and admire that we use with our clients.
And Dave, I know you're an investor with them as well. In the future, we'll talk more about Dimensional funds on this podcast. But one of the things I loved what you said is focusing on things you can control.
I don't know if you know who Carl Richards is. He wrote the behavior gap in a few other books, but he is the behavioral finance king and he's famous for drawing these very simple Sharpie drawings and my favorite one, and he created a calendar out of these drawings.
And so I've got the calendar in my home office right now and the month of March is the drawing of focusing on things you can control. So every single day I'm staring at this thing that focus on the things you can control. And it's just been my mantra for the entire month. And it is challenging.
Sometimes it's not as easy as it sounds, but it really does help me when I start to get anxious and thinking, what can I do today to just move the needle in the right direction? So I really appreciate you mentioning that.
Dave Goetsch: Yeah, and what's so funny, I love Carl Richards and I sent to about six of my anxious friends yesterday via text that days over decades, one. And so it says days and there's a bunch of squiggles up and down and up and down, up and down, just what we've seen with the stock market and then decades, which is this curve going up. And it's so powerful because it's so simple.
Now, this is one of those things, if you exercise more, you'll live longer. It's hard to remember. And the execution part is tricky, but there are things we can do. And I also think Dave Butler's been talking about this. He's the Co-CEO of Dimensional.
Just how important it's right now to just acknowledge what everyone's going through. This is hard. People are scared. This is not anything to dismiss of, oh, well if you remember these three simple things, you'll be fine. It's more just like maybe this will help you. I hope it does, and I hope everyone's safe and takes care of themselves.
Taylor Schulte: Something I've certainly learned the hard way as well. It's easy to say, come on, I told you we should focus on long-term and ignore the noise. But there is something powerful about acknowledging like, this is a scary time, this is a really challenging time, and I can totally understand how you feel uncomfortable right now.
That's a really good reminder. I want to be conscious of your time. One of my last questions here for you, the event that we're going through right now is what they call a black swan event or a tail risk that's manifested itself.
And so there's this interesting parallel Hollywood success is also kind of tucked away in a tail, but as a positive low probability outcome. And you did it, you were a successful Hollywood writer, which I can't imagine was easy.
How much is the risk of failure on the mind of a Hollywood writer? Was it on your mind kind of going through all of this? Just curious if you thought about that at all.
Dave Goetsch: As a writer, you think about failure all the time. You think about your own failure, your own inabilities. The insecurity of a writer is legendary. But the thing that I have come to really appreciate is something that somebody said a long time ago, which is that in Hollywood, success is the exception to the rule.
Most things fail. Most screenplays fail. Most pilots scripts fail. Most pilots that are shot fail, most TV shows that air don't go to a second season. So part of embracing uncertainty is also accepting that failure is an integral part of this whole thing.
And in a way that's why not like I bring everything back to investing, but it just does help me, which is that's why I didn't buy Tesla in January when it went up $400 because nobody was going to predict on January 5th that there was going to be a virus that's going to take over the world that's going to do this, it's going to impact this thing.
This is the magic of predicting the future. And that is a magic that studio executives and all these other people suffer from because they're making choices without all the information that they have.
So being able to buy a broad-based index funds type mutual fund means you're going to get the winners and the losers and you might have more of one kind of company than another kind of company rather than more of this company or that company. And it spreads your risk out.
So I think that the more we can get comfortable with failure, the faster we can get back at trying to succeed. So in the writer's room, when you're pitching jokes, they're not all great obviously. And you have to just like a guy who's up at bat, if he strikes out, you got to get back up there. And so that has been a lesson for me and it's a lesson that I really try to teach my kids.
I'll let you know in a couple decades how I did and people talk about grit and all this other stuff, but to me it's not so much grit, it's just accepting, yeah, we fail a lot, these things, I just want to create one show that succeeds and that will be amazing, but I might have to try 10 times or 20 times. And that's the reality of this and that's the uncertainty. And it's so hard. It's so hard.
Taylor Schulte: Where do you go from here? Are you reading more pilots and considering working on another show? Are you pivoting your career entirely? Where does Dave go from here?
Dave Goetsch: So I have this pilot, this idea that I've been working on for now two and a half years. And next week was supposed to be the table read for it, it was all cast and we're doing Maria Ferrari. And I wrote it with Chuck Laurie from the most successful TV producer in the world.
And we have this amazing cast and Dean Norris, who's from Breaking Bad, is in it. And it's just my giant passion project. And so that's on hold and I dunno what's going to happen and I hope that we'll get the chance to shoot that pilot and make that show.
And I have a lot of faith in it and then the team. But until somebody tells me how we shoot a scene with actors closer than six feet, I dunno when we're going to do that. So I'm trying to use this time to help.
The way we're talking about this just is there a way to help people reduce a small amount of their anxiety? And I'm charging ahead thinking that that show in success. We'll need a second episode.
So Marie and I are thinking of what the second episode is going to be and hopefully a year from now your dad will be able to watch it on TV and he'll say, it's not as funny as the Big Bang theory or it's pretty good or whatever. It's, it'll depend on all those uncertainties that we're just not sure of right now.
Taylor Schulte: Awesome. Well we'll keep an eye out for it. Kind of last question here. Are there any helpful resources that you lean on day-to-day to help you specifically with personal finance, books, blogs, podcasts? Are there specific people? Are there resources kind of day-to-day, month over month that you follow instead of turning on CNBC and just being scared to death every day?
Dave Goetsch: Well, so I do this exercise in my head, which is I retitle articles or I'll watch CNBC. They ask the questions and in my head I'll answer them. So there was an article I saw, the headline was in one month I lost my 30-year philosophy in investing.
And it was because in my mind I retitled that as why I should never be a market timer. There are ways you watch on CNBC, they're like, what? Every question on CNBC is like, what's the next hot stock? And you're like, we don’t know. We don’t know. You know nobody knows. It doesn't matter.
You can have a successful plan that doesn't involve magic in trying to predict the future. So that's my game that I play in my head and that's something that used to stress me out, but now to me, Jim Kramer is just a source of comedy.
Taylor Schulte: I love that. I think that's a really interesting, unique take one that I haven't heard of before, but I guess I'm not surprised coming from a writer that you're retitling headlines.
Dave, I really appreciate you coming on today. This is really, really awesome. Very, very fitting. I'm looking forward to spreading your message and getting into this into people's hands that are feeling anxious and just kind of unnerved at the moment.
So I really appreciate you carving out some time and I know we met briefly in person a couple years ago, but I hope to cross paths again soon.
Dave Goetsch: Yeah, absolutely. And thank you for what you do. This is an important message that's got to get out to more folks and they need to know how helpful it is to have a financial advisor.
Taylor Schulte: You're very welcome. Alright, we'll talk soon, Dave.
Dave Goetsch: Okay, talk soon.
Taylor Schulte: Hey, it's me again. I just wanted to say thank you one more time for listening and remind you to please, please leave a quick review if you're on an iPhone, leave a quick review on iTunes if you're enjoying the show. I'm getting great feedback from listeners just like you, and I really want to keep the momentum going.
So if you have a chance on your iPhone, leave a quick review on the Apple Podcast app. And thank you so much in advance for all of your help and support.
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