The number of personal finance websites and services that are out there feels almost limitless. Even if you focus on one top like investment advice, a Google search will have overwhelming results.
Knowing which financial services company to trust is important. Motley Fool is one of those names that have been part of the personal-finance community for years.
You may still be wondering, however, what is Motley Fool? Is Motley Fool legit? And how does Motley Fool compare to the competitors out there? Read on to learn more about Motley Fool, their history, services, and more to make up your own mind.
About Motley Fool
Motley Fool provides a variety of services, from personal finance advice to investing strategies, using many different types of media. They maintain a web presence through its website, www.fool.com. The Motley Fool website generates over two million web visitors each month.
Books, nationally syndicated newspaper columns, and weekly radio shows are other ways that Motley Fool has reached people. Their website, www.foolco.uk is their United Kingdom website for investors in that market.
Motley Fool Company History
Brothers Tom and David Gardner started Motley Fool in 1993. Together with their college friend, Erik Rydholm, they created a 16-page newsletter for individual investors. It combined humor and investing information which was unusual for its time. The response they received from the public was lukewarm. It would be true to say that Motley Fool had very humble beginnings.
Published using the name, “The Motley Fool”, their focus was on creating an investment guide for the layperson. Investment advice was neither brother’s expertise.
Shakespeare’s As You Like It: “A fool, fool! I met a fool i’ the forest, a motley fool.” was where the title of the newsletter came from. That name makes sense when you consider the Gardner brothers’ backgrounds. Tom and David Gardner were both English majors with no experience or training in finance. However, they believed that their approach to investing would have appeal to aspiring investors.
The Garner brothers would wear jester caps and called themselves the fools of Wall Streets. The fool was the person at court that could speak truthfully to the king in Elizabethan literature without the threat of losing their life.
When the brothers and Erik began working on The Motley Fool, they focused on gaining subscribers using their friend’s and family’s wedding lists. Creating a mailing list of these individuals, they sent sample issues of the newsletter. An invitation to subscribe was also included in the newsletter. However, few subscribers were gained using this tactic.
Nevertheless, the trio continued to work hard out of David’s house. Although they were unable to gain more than 300 subscribers, they published 12 monthly newsletters before abandoning the project.
Finding Success on America Online
Although their first endeavor had failed, they looked for other methods to rely on their personal finance advice. Tom Gardner posted a note on a finance forum that was maintained by Ameria Online (AOL) in November 1993.
In his post, he offered free copies of The Motley Fool newsletter and provided his phone number as contact information.
There were three messages on his answering machine from various parts of the U.S. This gave him the idea that there a chance to reach a wide audience with their unique approach to investing advice.
The brothers established a message board on AOL to become a hub for investing resources and information exchange. They offered to answer questions that people had, making it clear that they were novices themselves. Encouraging others to offer their own advice too, their bulletin board becomes one of the most popular personal finance sites on AOL by early 1994.
Their popularity was also noticed by AOL officials who offered the brothers the chance to establish an official presence. A $10,000 investment by AOL helped move into a townhouse located in Alexandria, Virginia. They took advantage of the space by purchasing more computers and hiring new employees. The Motley Fool was shaping into a real, legitimate business.
Debuting in August 1994 with their forum and official status, Motley Fool becomes an investment community for the average person. Their topics centered around helping others understand investing and removing the barriers that kept ordinary investors out of Wall Street and the stock market.
David had once explained that from Motley Fool’s perspective, that people have gotten rich by managing other people’s money. Those people didn’t know what to do with their money, which is why they hired someone to manage it for them.
Teaching people how to manage their own money didn’t make sense for these institutions. People would stop paying their fees if they provided this education. Due to these and other conflicts of interest, these institutions weren’t always aligned with their customers. Motley Fool’s goal was to teach the masses about investing.
Moving beyond Message Boards
From gaining 60 new members on the forum, Motley Fool quickly grew quickly. The company launched www.motleyfool.com, which was later renamed www.fool.com.
The “Fool Portfolio” was started by the brothers with $50,000 of their own money to fund a collection of stocks. It served as a place for the Gardners to test out their investment ideas, strategies, and make stock picks. This was later renamed “Rule Breaker Portfolio”.
Motley “Fools”, which was the name of those who participated in the message boards and visited the website were allowed to watch and learn. Through the company’s good and bad investment strategies and stock recommendations, the audience continued to grow.
New members gravitated to these Motley Fool services, enabling them to exceed their revenue expectations of $25,000 in the first year. The rapid growth of AOL itself was part of the reason for this success.
In mid-1995, the company launched three new forums on AOL. Revenue estimates increased to $1.5 million. The eight stocks that were part of their real-money portfolio had increased to 22.5 percent in May of 1995.
This allowed Motley Fool to create more real money portfolios to test out other stock picks and strategies. Each of these portfolios had unique names such as “Boring Portfolio”, which consisted of Motley Fool stock picks of certain approaches to investing.
By this time, Motley fool had reached a wide variety of people including experienced investors. Their blend of humor and investing advice leads to the exploration of other mediums.
Through a partnership with the publishing company, Simon & Schuster, the Gardners started to write books in 1996. The Motley Fool Investment Guide rose to become a New York Times bestseller. Two additional books were published over the next three years: You Have More Than You Think and Rule Breakers, Rule Makers. These books also made the New York Times bestseller list.
Finding success in the publishing industry, led to the brothers launching a line of self-published books. Using the Fool Publishing label, the Gardners released their educational materials based on their personal finance experience.
In 1997, the Motley Fool debuted as a nationally syndicated weekly newspaper column. Over 170 newspapers used the insight of Motley Fool analysts to teach others about investing.
This leads to a joint venture with Cox Radio the following year for a nationally syndicated radio show. “The Motley Fool Radio Show,” was broadcast to more than 120 radio stations across the nation.
They added The Motley Fool Monthly magazine a year later to their media portfolio.
With online activity growing from the late 1990s, Motley Fool made its way to the UK market in 1998. Their website, www.fool.co.uk reached millions in a few months, leading to plans for a German website.
Motley Fool moved into mortgage services in 1998 which an agreement with E-Loan. This leading online mortgage marketplace co-branded their Mortgage Center to provide online mortgage services.
Key Dates
1993
The brothers, Tom and David Gardner start The Motley Fool to help people reach their dreams of financial freedom.
Tom Gardner posts on a personal finance message board offering free copies of The Motley Fool newsletter with his telephone number.
1994
The Motley Fool message board becomes one of the most popular personal finance sites on AOL.
A partnership with America Online and a $10,000 investment allows Motley Fool to grow its online presence.
1995
Rule Break Portfolio, a collection of stock picks by the company grows to over 22 percent increase by May. Additional real money portfolios were started to continue testing different investments.
1996
Simon and Schuster partners with the Gardners to publish The Motley Fool Investment Guide and other bestsellers.
1997
Motley Fool’s nationally syndicated newspaper columns launch.
1998
Motley Fool partners with E-Loan to provide online mortgage services via a co-branded Mortgage Center.
Motley Fool launches a UK version (www.Fool.co.uk) and a Japanese version (www.Fool.co.jp) of their website.
1999
Patrick Garner becomes the chief executive officer.
2000
Soapbox.com debuts as an online venue for people to post-investment research reports for sale.
2001
The Motley Fool Money-Making Life-Changing Special is produced by PBS as a television program that’s hosted by David and Tom. The Motley Fool is introduced internationally.
2002
The Stock Advisor program launches. The stock advisor subscription is a stock picking service that’s available for a fee.
Key Members
David Gardner
The older of the two Gardner brothers who founded The Motley Fool. Wrote for Louis Rekeyer’s Wall Street newsletter before working with his brother Tom and Erik Rydholm to launch the company.
Tom Gardner
The current CEO of the Motley Fool, he founded The Motley Fool with his older brother David and friend, Erik Rydholm. Tom has also testified in front of the U.S. Senate, calling for more transparency in the financial services industry.
Erik Rydholm
After helping the Gardner brothers to co-found The Motley Fool, Erik Rydholm moved on to becoming an executive producer for many of the most popular ESPN programming.
Motley Fool Free Services
Motley Fool offers both paid and free content as part of its offerings. Let’s first take a look at the Motley Fool services that are available for free.
The Motley Fool Website
Motley Fool’s website has a plethora of articles about the basics of investing, stock market, retirement, and personal finance topics. You won’t get a full in-depth analysis on index funds, high-growth stocks, mutual funds, or other topics.
It’s also not like a source for the latest news like The Wall Street Journal is when it comes to what’s happening in the financial industry and the stock market.
However, it’s an excellent source to get smarter about investment topics and learning the basics. They do provide some stock ideas on which individual stocks to consider. You’ll need to do your own follow-up research before investing in their stock tips.
Their website provides sound independent financial advice for those looking for unbiased content.
Podcasts
Some people’s personal preferences are to consume their content in audio form. Anyone can listen to any of their five podcasts for free including:
- Motley Fool Money – Analysts at Motley Fool break down the top business and financial news headlines, plus interviews with industry experts and best-selling authors.
- Market Foolery – Daily show discussing stock news and top investing/business stories.
- Industry Focus – Motley Fool analysts look at a specific industry and stock making headlines including healthcare, technology, energy, and consumer goods.
- Motley Fool Answers – Personal finance expert Robert Brokamp answers money questions.
- Rule Breaker Investing – Hosted by David Gardner, he shares his insights and stock recommendations based on the most disruptive and innovated companies out there.
All-Star Money
Do you enjoy investment newsletters? All-Star Money scans over 1,500 finance sites to share the top three articles. Topics include investing, budgeting, and financial independence.
The Ascent
With all the various options when it comes to financial products and services, it is hard to know which ones to turn to. Don’t just take company claims into account. This Motley Fool review service helps you navigate in this confusing space.
The Ascent cuts through all clutter with their own independent research to review and recommend the best credit cards, savings accounts, mortgage lenders, and more.
Motley Fool Premium Services
Motley Fool is arguably best known for their paid services such as Stock Advisor. The premium services offer much more which, based on your personal financial situation, may be a benefit to you. Let’s take a closer look at Motley Fool’s Premium services below.
Motley Fool Stock Advisor
Let’s start with the Motley Fool stock advisor service then. This stock-picking platform gives you access to two monthly stock picks. David and Tom manage Motley Fool Stock Advisor, so really these are their stock picks.
With these stock picks, you get a breakdown of why they have selected it and any other information that you may need before investing. It’s like getting Wall Street analysts breakdowns, in a concise and easy-to-understand format.
This is exactly what investors who prefer receiving a stock recommendation over a mutual fund, ETF, or index fund wants. Motley Fool Stock Advisor takes out the time-consuming task of making stock picks by doing the research for you. Additionally, if you’re worried about investing in bad stocks, you can get a full refund within the first 30 days.
These recommended stocks are heavily curated and they have a proven track record so it’s pretty likely you’ll be happy with the individual stocks they recommend.
Along with your Motley Fool Stock Advisor subscription, you’ll get Best Buys Now. These are ten stock picks that you should consider buying now. You’ll also receive Starter Stocks with this stock-picking premium service. Starter Stocks is a stock picks for new and seasoned investors to begin their investment portfolio with.
Motley Fool Stock Advisor also gives you access to the community and investing resources. Basically, this gives you all the material you need to become a better investor.
You also get access to their previous picks as a Motley Fool Stock Advisor subscriber. This allows you to look back at previous stock picks and see how they have fared in the stock market since. You’ll also get “Instant alerts”, event-based alerts that occur to stock on your list indicating when to buy when it’s time to sell and large pricing changes.
You can sign up for Motley Fool Stock Advisor for $99 per year at writing. As a new member, you’ll also receive three of their newsletters: Rule Your Retirement ($149 per year), Rule Breakers ($299 per year), and Cloud Disruptors ($1,999 per year).
Claim Your New Member Discount on Stock AdvisorRule Breakers
Aside from their stock advisor service, Motley Fool offers another stock pick recommendation with Rule Breakers. Unlike Stock Advisor, this one looks at high-growth stocks specifically.
Their previous picks have returned nearly five times higher a return than the market. That’s a pretty stellar past performance record.
A Motley Fool subscriber to Rule Breakers will receive stock pick recommendations based on this schedule:
- Second Thursday of the month: One new stock recommendation
- Third Thursday of the month: 5 Best Buys Now list
- Fourth Thursday of the month: One new stock recommendation
Their Best Buys Now are a list of five stocks to buy now. They are picked from previous recommendations that the stock advisor program believes still has potential for a big upside.
The service makes recommendations in the stock market based on growth companies. So there’s much more volatility in this stock advisor program than one would experience from Stock Advisor.
If you do a market pass of their previous stock market picks, you’ll see that they’ve chosen some stocks that have done really well and they have also picked some big losers.
Out of their 24 stock picks, anywhere from 1 to 5 end up being a losing stock. That’s why it is important to understand how it is different from Stock Advisor.
Their focus is to find the companies that “are poised to become tomorrow’s market leaders”. Their service picks stocks based on six unique investing criteria:
- Search for the first movers and top dogs in important emerging industries
- Look for companies with the sustainable advantage that was gained through visionary leadership, inept competitors, patent protection, or business momentum.
- Had strong past price appreciation since the best growth stocks continue to rise. The company has used its advantage to sustain its earnings and grow its cash flow to generate new investors.
- Have strong management teams and smart backing.
- Are marked by strong consumer appeal, usually in the form of a strong brand that enables it to sustain huge growth easier.
- Stocks that are considered grossly overvalued by at least one large party within the financial media.
The platform is very similar to their Stock Advisor service and includes premium research and content. You can also set up “instant alerts” when they have a new buy, it’s time to sell, or there is a huge price.
There is a “Rule Breakers Community” page that allows you to share and discuss your ideas with other members. As a court jester, you are part of an exclusive community of like-minded investors that want to invest better.
You can join Rule Breakers for $99 a year. There is a 30-day money-back guarantee on this service offering just like Stock Advisor.
Get Access to Rule Breakers for Only $1.90/weekEverlasting Stocks
The analyst team that outperformed the S&P 500 over the last 17 years offers this stock service. These stocks are all held by Tom in his personal portfolio.
Tom boasts that these companies are all ones that an investor can buy today and hold forever. He also releases a new stock pick each quarter. Motley Fool’s expansive library of educational resources is also included in the service.
When you get the everlasting portfolio, you also get a ton of data on each stock pick including:
- Name and ticker symbol
- Portofolio allocation percentage
- Current market value
- Cost Basis
- Current share price
- Profit/Loss
Sign up with a 30-day money-back guarantee for an introductory deal of $99 for one year.
Click Here To Get StartedRule Your Retirement
Those various mutual fund fees you’re paying may help manage your retirement portfolio, but what about navigating through these major financial decisions?
Rule Your Retirement is an online retirement planning service that caters to those who want to learn how to retire smarter and sooner. It provides actionable advice and insight to topics like setting and achieving your retirement goals, finding companies to invest in, and much more.
Robert Brocamp is the lead advisor for Rule Your Retirement. He is a Certified Financial Planner and has been a part of Motley Fool since 1999.
In addition to the newsletter, you get access to some valuable tools. For example, you get access to the model portfolios which are structured for investors to make cost-effective investments in ETFs and indexed mutual funds.
“10 years from retirement”, “Within 10 years of retirement”, and “In retirement” are the three different scenarios that are available.
You also get access to their investment community and content that overs well over 1,000 topics. There’s no fluff pieces here, just practical advice on current market activity, general investment strategy, and much more.
A year of their service, including a 30-day money-back guarantee is available for $99.
Click Here To Get StartedEverlasting Portofolio
This portfolio-building program takes a deep drive into Tom Gardner’s personal portfolio. The view is similar to what you would expect from logging into your own brokerage account.
The table view offers a look at columns that include information like:
- Company and Ticket
- Market Value
- Current Price
- Allocation
- Return
- Average entry price
There are four main education resources included in the service including Getting started with the service, Philosophy, Selling Strategy, and Principles of winning.
Anytime that Tom updates his portfolio, you’ll receive a real-time alert.
Tom shares his methodology with the included When to Sell guide. This gives you insight into his principles of selling which is valuable information in turbulent markets.
The Everlasting Playbook provides a detailed look at ranking every recommendation that is held in the Everlasting Portfolio. Gardner also provides five new stock recommendations as part of this service.
You can subscribe to Everlasting Portfolio for $1,599 for a year, making this service among the most expensive offered by Motley Fool.
Click Here To Get StartedOther Premium Services
Motley Fool offers several other paid services that are mostly centered around certain niches and industries. These include:
- Discovery: 10x – Companies that Motley Fool believes have the potential to grow ten times over the next 5-15 years
- Discovery: Cloud Disputors 2020 – Cloud technologies focused
- One – Access to all Motley Fool stock services plus Everlasting Portfolio
- Market Pass – New recommendations from Stock Advisor and Rule Breakers and ideas/commentary from Discovery: Everlasting Stocks and Rule Your Retirement
- Options – Closed options trades
- Global Partners – Investment opportunities outside of the U.S
- Total Income – Bond funds, high-yield stocks, and other income-producing investment ideas are discussed
Is Motley Fool a Credible Resource?
If you were to search the internet for “Motley Fool Review”, you’d find that the service garners positive reviews from almost every website. Motley Fool has been a trusted independent financial resource for decades.
They are a legit company that has recommended stock picks such as Netflix, Amazon, Tesla, and many others before they grew to be the names they are today. Both of the brothers are very active on social media and don’t shy away from talking to their customers.
Their stock picking services have outperformed the S&P 500 and hundreds of thousands of investors trust them for recommendations. Try out one of their key premium services yourself with the 30-day guarantee to see for yourself. You’ll end up part of their Fool community before you know it.
