Ode to Jack

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Nick Foy, CFP®

On January 19, Jack Bogle died at age 89. There have been countless stories and accolades pouring in from the business community (and beyond) about his impact on the investing community (and beyond).

I thought I’d add my own contribution to the vastness of cyberspace.

At this point it seems so obvious: The more you pay to invest, the less money you’ll have in your account. When Bogle started Vanguard in 1975, and for many years after, the association wasn’t so clear thanks to the efforts of Wall Street to hold on to the turf they claimed over many decades.

If you spend a lot of money on a car, you’d better get a nice car. If you spend a lot of money on a refrigerator, it should be superior to the less expensive alternatives. With investing, the relationship between what you pay and what you keep is inverse to most of the rest of the world: The less you pay, the more you make.

Bogle might not have been the first to discover the relationship between relative cost and chance of investing success, but he certainly popularized it. And thanks to his efforts, countless people have been able to afford to go to college, to go on vacation, to retire. His impact on the lives of the general public can’t be overstated, even if most people don’t realize the significance.

Vanguard is now a behemoth, with over $5 trillion in assets under management. It took awhile for the philosophy to catch on though. “Bogle’s Folly” started with just over $11 million in assets.

My own story has been heavily influenced by Bogle, and even though I never had the chance to meet him, I deeply appreciate his contribution to the world of personal finance. Without it, people like me who have no interest in selling products wouldn’t have a home.

My favorite book of his, Enough, offers timeless thoughts on corporate excess, personal greed, and a better way of measuring wealth. His own wealth was greatly limited by his decision to create Vanguard as a non-profit corporation, truly a mutually owned organization, whereby the funds (and thereby the investors) own the company. Had he made it a private organization, he surely would’ve been worth many billions.

Jason Zweig has done a nice job compiling decades worth of articles and thoughts about the man, and I recommend spending some time reading through it to better understand what made him tick. His life impacted yours more than you might realize.

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