The Best Quotes from the Vanguard Founder, John C. Bogle

John C. Bogle was the founder of Vanguard. Credited with creating the first index fund, which tracked the S&P 500 in 1975, Bogle revolutionized the investing world—becoming the king of the “Index-and-Chill” movement.

By creating index investing, everyday investors can buy baskets of holdings that track the broader market. The overall intent was to make investing easier. Additionally, it also made investing less expensive.

By 2019, John (Jack) Bogle’s net worth was approximately $80 million. Like Charlie Munger, Jack Bogle left an incredible legacy. He even etched some financial, life, and investment quotes that match the Oracle of Omaha, the legendary investor, Warren Buffett.

The True Value of Investing in a Vanguard ETF

Why is this important for you to know?

As of November 18, 2024, the Vanguard S&P 500 exchange-traded fund (ETF) (Ticker $VOO) has grown 88.52 percent for the last five years. That’s an average annualized growth of 17.70 percent. If you made a one-time investment of $10,000 in 2019, your current balance would have gone up to $20,328.47. That’s a net capital gain of $8,791.70 with a Dividend Reinvestment (DRIP) value of $1,536.77.

In the end, your total return would have exceeded 100 percent. With inflation ranging from a high of 9% to a low of 2%, investing is the true wealth equalizer.

But what is Vanguard?

While you might have heard it in passing, Vanguard is to Fidelity (another brokerage firm) like Coke is to Pepsi.

Jack Bogle made his life’s work helping individual investors save for their children’s education and comfortable retirements.

To do so, he used Vanguard as his paintbrush. The term refers to the forefront of any movement, field, or activity. In this case, a leader in investments.

Vanguard is an asset management firm that offers investment accounts and securities. The firm created over 430 funds and serves more than 30 million investors. Vanguard is also the world’s largest issuer of mutual funds and the second-largest issuer of ETFs.

As of October 2024, Vanguard has nearly $9.5 trillion in assets under management (AUM). This makes Vanguard a unique money manager, after BlackRock and Fidelity. Interestingly, Vanguard has opted out of Cryptocurrency so far. The firm’s goals harken to an older version of Americana (the classic Middle-Class values and lifestyle).

Check out the difference between Fidelity and Vanguard.

In the end, it comes down to the Impact and Effectiveness

The Vanguard Effect reflects the tendency of asset managers to reduce their fees after Vanguard has entered a market or introduced products in a certain category.

Competitors like Fidelity and Shwab followed suit, which resulted in lower costs for all investors.

While not outright eliminated due to expense ratios, investment fees on trades are seemingly a thing of the past. I still remember paying $15 on a trade before and then $6.95 per trade.

Thank you, Jack, for creating a common-sense approach to investing. It’s affordable, easy to learn, and more effective than saving in a bank account at 0.01 percent.

Do you want to learn more about investing? Check out “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns.“

Here are Bogle’s Top Quotes and What They Mean to Me:

• “An investment in knowledge always pays the best interest. Learning is to the studious, and rich to the careful. If a man empties his purse into his head, no man can take it away from him.”
  • Financial literacy pays dividends, while Financial illiteracy is expensive. Avoid wasting precious time, and not learning anything. I became a millionaire, the moment I chose knowledge over intellectual sloth.
• “Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”
  • Never make the same mistake twice. More importantly, learn from the mistakes of others. Keep your financial household streamlined. You will be a millionaire in no time.
• “Don’t look for the needle in the haystack. Just buy the haystack!” ETF investing is a simple and effective approach instead of stock picking.
  • Nearly 90 percent of stock pickers underperform the market in the long run. While some may win and win big in the short run, they will ultimately lose later. The house always wins.
• “Time is your friend; impulse is your enemy.”
  • Time in the market is better than timing the market. Since the S&P 500 was introduced in 1957, its annual return, including dividends, has averaged over 10% through the end of 2024.
• “If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.”
  • You will lose at some point and that’s OK. That’s the nature of life. You won’t always win at everything. Those who hold on the longest tend to make it.
• “Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.” Additionally, “The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”
  • These two are a massive warning on understanding your investment management expenses, a silent wealth killer. Inversely, most people don’t fully understand how powerful compounding is.

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Lawrence Gonzalez

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