John C. Bogle will remain a legend in our industry. He is the man behind creating index funds for the masses.
Mr. Bogle founded Vanguard in 1974 which today manages $4.9 trillion in assets under management. Vanguard was built on the premise that most mutual funds managers do not outperform the broad market averages over the long haul. In other words, if you can’t beat the market, then buy the market, but do it at as low a cost as possible.
Dimensional Fund Advisors (DFA Funds), which I use for my clients and can, unlike Vanguard, only be accessed through an approved advisor, is built on the same premise.
John Bogle literally changed the face of our industry by introducing a consumer-focused, low-cost way of investing that to this day Warren Buffett agrees is the right strategy for most investors.
I had the privilege of meeting Mr. Bogle many years ago at a Morningstar Conference in Chicago. He was hanging out in the hallway and I approached him and introduced myself. He looked very happy to engage in a conversation with me and was a very gracious and humble man. You would never have known that he had suffered from a congenital heart defect and had several heart attacks which led to a heart transplant in 1996. When I met him he looked fit as a fiddle. (He ultimately died from esophageal cancer.)
I write about this today because he was one of the good guys, maybe even one of the great guys in our industry. He was completely consumer focused as an advocate for their success and has contributed to millions of people in this country accumulating more wealth than they would have without him.
And while he became a wealthy man in the process, by helping millions of other people, his wealth was nowhere even close to some of his peers. Edward C. Johnson III, chairman of Fidelity Investments, for example, has a net worth of approximately $7.4 billion according to Forbes. Mr. Bogle’s net worth, on the other hand, was generally estimated to be about $80 million as of last year. Mr. Bogle was known as a thrifty individual, often taking an early morning train from his home in Pennsylvania to a meeting in New York rather than paying for an overnight stay in a hotel room there.
He will be remembered as an outspoken evangelist for the consumer. He was never afraid to bash the high-cost mutual funds that were sold by many a brokerage firm. In fact, he was known as a very combative individual who wasn’t afraid to speak his mind.
This brilliant man with an economics degree from Princeton will surely be missed in our world. He was an icon and I’m sure will remain one, and a generous one at that. It has been reported that he gave half of his salary to charities.
“My only regret about money,” he said in 2012, “is that I don’t have more to give away.”
Thank you, Mr. Bogle, for all you gave to the financial services industry. You will be missed.
(If you’re interested, Mr. Bogle is the author of three books: “Bogle on Mutual Funds”, “Common Sense on Mutual Funds” and “The Clash of the Cultures: Investment vs. Speculation”.)