Jack Bogle, Founder, The Vanguard Group, shares some timeless insights.
In 1949, Jack Bogle was a Princeton student working a summer job as a runner at a Philadelphia brokerage ﬁrm when an older runner took him aside and said, “Bogle, I want to give you the best stock market advice that you ever had in your life: Nobody knows nothing.” And it was the best advice, since it served as the “quasi-inspiration” for his creation of the ﬁrst stock market index mutual fund in 1975. “If nobody knows nothing, you own everything,’’ he reasoned.
The index fund and the 84-year-old Bogle’s unwavering commitment to low-cost, long-term index investing helped Vanguard grow into the world’s largest mutual fund company. The twin ideas are also at the heart of his advice for young investors who want to get rich: Save early and regularly through a 401(k) or IRA, and put most of your money in a low-cost stock index fund. That way, he says, you beneﬁt from “the magic of compounding returns” without having them “destroyed or severely eroded by the tyranny of compounding costs.”
Bogle, who grew up poor in the Depression, says he thinks about money as existing on three levels: Enough for a “decent living”, enough for “the pursuit of happiness” and a ﬁnal level of even greater wealth “that should not be about ﬂagrant and conspicuous consumption” but about helping those less fortunate. “Our Founding Fathers would have been appalled at the gross excesses of today’s society.”
– Janet Novack