You may have never heard about John Bogle, but he made hundreds of millions of people across the globe wealthier.
John Bogle started the first index fund at Vanguard in 1975. His theory was that professional managers could not beat the overall market when you factor in their fees. Boy howdy was he right.
Index funds gave much higher individual returns on average than actively managed funds. Index funds help a lot of people have more money in retirement.
At Vanguard John Bogle started a price war to cut investing fees. Average fees (which come right out of your investment returns) have dropped a huge amount since the mid-1970s. Today the S&P 500 index fund at Vanguard has an annual fee of only 0.04%.
He also lowered the threashold to invest in equity markets. When he first started out you only needed $3,000 to invest in his first index fund. At the time most funds had a $50,000 minimum. Now with the price competion he started the minimum investment to get into an index fund is $250.
Today Vanguard is the 2nd largest investment company in the world with $4.9 trillion in assets.
Here are a couple of quotes about John Bogle:
“If all investors had heeded his ideas, they would be hundreds of billions of dollars better off than they are now” – Warren Buffett in a 2009 WSJ interview
Paul Samulson Nobel Prize Winning Economist said that the retail index fund was equal in importance to “the invention of the wheel, wine, and cheese, the alphabet and Gutenberg printing.”
John Bogle is the single most important individual in personal investing in my lifetime. He has personally helped me save and make thousands of dollars in investment fees I’ve never paid and higher investment returns.
John made money at Vanguard and took a salary. But he relentlessly stressed frugality within the firm and in investing strategy. He never paid himself a monster salary. He preached: “invest in an index fund for diversification and low costs.” He provided customers very, very low costs and a message of “buy and hold.”
May you Rest in Peace Mr. Bogle and may God have mercy on your soul. You single handidly did more to help humanity than most anyone else in your lifetime.