I was saddened to hear the news of John C. Bogle’s death on January 16 at 89. He meant so much to so many ordinary, everyday investors of every age.
I had the pleasure of interviewing Mr. Bogle, AKA “Jack” for a full one-hour MoneyTrack special “An Evening with John Bogle: From Wall Street to Your Street“, following the financial crisis. I’ll always cherish that quality time we spent together. I was fortunate to have had him as guest expert on other earlier episodes as well.
Why are people talking about John Bogle so much?
For those of you who don’t know him, this is why he’s being celebrated. Simply put: John Bogle made stock market investing accessible to all Americans, not just wealthy people. As the founder of The Vanguard Group, he created two industry paradigms.
First, he revolutionized mutual funds in 1975 and perhaps the U.S. economy by launching “The Vanguard Experiment” so that mutual funds could be operated at cost and run independently versus being managed by an external company that would take a cut of the profits.
Second, he strongly believed that everyone should have access to tools to accumulate wealth, meaning investments that were “low in fees, big in diversification and a simple way to invest.”
By doing this, John Bogle drove down mutual fund costs across the industry because he was a tireless advocate for his investors––and for their families––to pay less in fees and commissions so they could put that money straight into their investments.
John Bogle offered many pearls of wisdom during my interview.
During our sit-down interview, Jack offered many valuable insights. One remark in particular struck a nerve with me because he referenced financial advisors. He said, “Any aspect of professional behavior and the ethics that go with the role of the professional advisor have been reduced, if not abandoned, in favor of making a buck.”
This is a man who always stood up for the everyday, individual investor. By the simple act of bypassing brokers, eliminating sales charges and making his investments available directly to investors, his company evolved into a pure no-load mutual fund company, which saved his shareholders hundreds of millions of dollars in daily sales commissions and provided an open door to folks who might not otherwise be able to afford to invest at all.
Why was he often called “champion of the small investor”?
Today, Vanguard is a community of 20 million people who think and feel differently about investing because there are no outside owners. All of the investors are the owners.
“Saint Jack”, as the press liked to call John, was at the forefront of a movement to change the way the world invests. He made mutual fund investing simpler, easier and more affordable for the Average Joe and Jane by saying “investing is simple, but it is not easy” with asset allocation with stocks for growth, bonds for safety, and continually recommending that you change your bond position percentage, as he often did, so it is equal to your age.
How? The average expense ratio for Vanguard mutual funds and ETFs is 82% less than the industry average, so more of what investors invested stayed in their pockets, where it belongs.
What is Vanguard worth today?
Its first index mutual fund, launched in 1976, is today called the Vanguard 500 Index Fund. It is now one of the industry’s largest and worth more than $400 billion in assets.
Meanwhile Vanguard has accumulated $5.1 trillion in assets under management, which is why this man is most often known as the “father of indexing”.
And John Bogle was the catalyst behind it all. He will be missed by me and millions of his loyal Vanguard community members, but what he taught us will live on for many generations.