I still remember Wednesday, April 30, 1975 like it was yesterday. It was the day before what came to be known to people in financial services as May Day. I’m not sure if it was sunny or socked in with San Francisco fog. I had a lot on my mind. I do recall that investors had been in a good mood all spring. The Nixon impeachment nightmare was over, the Vietnam War was behind us, and the market was moving again; the Dow was up nearly 50% since late December. I’m sure I was as hopeful as anyone else. But I’d seen too much to believe the worst was over.

I was about to turn 38 in a couple of months. The Dow had been flirting with the magic 1,000 mark for the last 10 years, first breaking that milestone on November 14, 1972. At the moment, it was hovering just above 800. So to say I was a tad skeptical of the rally’s staying power would be an understatement. On the other hand, if you’d told me then that not until December 21, 1982, would the Dow finally break through 1,000 for good, I might have said to hell with it and found another line of work. In fact, I had been right on the precipice of that decision for some time. Who starts a brokerage firm in the middle of a two-decade stock market slump? This was my third go at starting a business since I had set out on my own, shortly after finishing Stanford Business School. Part of me wondered, How many chances does one guy get in life?

What’s more, I was in a deep trough myself just then, carrying a six-figure debt. I owed money to Crocker Bank for a business loan I had used to buy out one of my partners. I also had a sheaf of personal loans that wound up in my pocket when I got divorced. I was now married again, but I had no assets to speak of. Helen and I were living with our baby, Katie, in a small apartment in Sausalito. Helen was selling real estate, while I was a year into launching my firm, an experiment in discounted stock trading made possible by the Securities and Exchange Commission’s test of deregulated commissions. I was bound for parts unknown.

“I have never believed in waiting around for perfection.” --Charles Schwab

That Wednesday, I had one overriding question. The answer would make or break my plans, as deregulation was about to become the law of the land after a one-year test period. What would Merrill Lynch do? Founded in 1914 by the legendary Charles Merrill, with a vision to bring “Wall Street to Main Street,” Merrill Lynch was the undisputed king of the retail brokerage market, and a billion-dollar-plus underwriter. It had branch offices from coast to coast, an army of thousands of highly motivated commissioned brokers, and a slogan known to everyone who watched TV or read the newspaper: “Merrill Lynch is bullish on America.” Charles Merrill had built his firm on the idea of opening up the world of investing to the middle class. It was a goal I admired. He was the first to experiment with salaried brokers back in the 1940s, addressing the serious conflict of interest that I had disliked for years. And the firm was hugely successful. Everybody said to me, “Wait until Merrill Lynch decides to go into your business. You are going to be crushed.”

I was worried, but Merrill was an entrenched member of the Wall Street establishment. It was still beholden to its many commissioned brokers and its highly profitable investment banking and research businesses. It couldn’t just chuck all that out the window. Still, the more I thought about it, the more I was certain that Merrill would have to lower its commissions at least a little in response to deregulation. In which case, I feared, I’d be dead in the water as soon as I launched my business. No way my little firm could compete with an industry giant like Merrill.

All that was on my mind when I arrived at 120 Montgomery Street that Wednesday morning, early as usual (I liked to be at my desk by 6:30 a.m. when the market opened in New York); I took the elevator up to the 24th floor and the small office the handful of us occupied. I picked up my copy of the Wall Street Journal, and there on the front page was the news: “Merrill Lynch will raise securities brokerage fees on most transactions under $5000.” Was it true? “…will raise securities brokerage fees…”

Unbelievable. Here I’d been afraid that Merrill would lower its fees and meet my commission cuts and steal my opportunity. Instead, it had taken advantage of deregulation to raise its prices for the average guy and drop them for large institutions. Once I got over my shock, I was beaming. I saw an opportunity, and I meant to take full advantage of it. It had been a long road, with lots of bumps along the way. But on that day, Charles Schwab looked like it had a real chance in the marketplace. I remember saying to myself, I’ve got a hell of a business.

Fastforward 35 years and I guess you could say I was right.