Jack Bogle: In Memoriam
I’ve never had someone famous write a letter to me. Then again, I’ve never really written a letter to anyone famous; that is until I wrote Mr. Bogle on March 7th, 2015. I had heard that he allocated several hours every week to reading and responding to letters. 16 days later, I received a letter from arguably the greatest positive influence on the investment industry to ever live. It read as follows:
“I’m happy with my role in building a better mutual fund industry.” What a role it was. How humble is that statement. If there were three character traits that set Jack Bogle apart from the rest, they would be humility, integrity, and contentment. I’ll start first with the last trait.
Being content and having enough
Bogle could’ve been a billionaire several times over. He chose not to be. I don’t know of a single person who would opt for tens of millions instead of tens of billions. But Bogle did. He wasn’t really motivated by money. He was motived by purpose. He was motivated by service. And he was unwavering in his convictions right to the end.
I sensed back in 2015 that he would only have a limited numbers of years left, so I thought I’d reach out to a man I admired to see if the rumors were true about his handwritten letters. They were. Why I doubted him for a single second was more of a personal fault on my part more than anything. Never underestimate the power of good people out there. Not merely because he writes back to his Bogleheads like myself, but because he devoted his life to good things: good family, good work, good purpose, good people surrounding him, and an all-round good life.
Bogle was content, at least with the financial rewards he received. He was never really content with the investment industry as a whole though, working tirelessly until the end. He wrote an entire book on the topic of contentment called Enough. It’s classic Bogle. He starts the book with the following statement in the introduction: “The rampant greed that threatens to overwhelm our financial system and corporate world runs deeper than money. Not knowing what enough is subverts our professional values. It makes salespersons of those who should be fiduciaries of the investments entrusted to them. It turns a system that should be built on trust into one with counting as its foundation. Worse, this confusion about enough leads us astray in our larger lives. We chase the false rabbits of success; we too often bow down at the altar of the transitory and finally meaningless and fail to cherish what is beyond calculation, indeed eternal.”1
False rabbits of success. Bogle’s net worth could’ve exceeded that of the Johnson family that founded Fidelity Investments with nearly ten billion in their coffers, but Bogle was content with what he had. Seven years ago he said that his only regret about money was that he didn’t have more to give away. He regularly gave half his salary to charities. He forfeited billions in pursuit of a company whose structure was fundamentally different than the Schwab’s, BlackRock’s, and Fidelity’s of the world. Vanguard was created as a privately held company where its fund investors actually owned the company, thereby virtually eliminating any conflict of interest. In contrast, many fund companies are publicly owned companies attempting to maximize share price for their shareholders at the expense of its fund investors. They rob Peter to pay Paul. They have to, there’s no other choice. In order to increase share price, they must create value by driving up the earnings per share. But in order to increase earnings, they must charge the everyday fund investors more to invest. Redistribution is the name of the game. Bogle led the charge to fix all of that. Today, Vanguard has nearly 5 trillion of assets under management (AUM) and is one of the largest fund companies on the planet.
On having enough, Bogle said this in his eponymous book: “But the question remains: What are the things by which we should measure our lives? I’m still searching for the ultimate answer to that question. But I know that we can never let things as such—the material possessions we may come to accumulate—become the measure of our lives. In a nation as rich with material abundance as ours, a cornucopia of things almost beyond measure, it is an easy trap to fall into. Two and a half thousand years ago, the Greek philosopher Protagoras told us that “man is the measure of all things.” Today, I fear, we are becoming a society in which “things are the measure of the man.”
Righteous without being self-righteous
I won’t take credit for this play on words. I had read it somewhere else after news came that Bogle had passed. He was righteous in his thought processes and his purpose without showing a shred of being self-righteous. He was a man of his word, he led by example, and he was revered by Bogleheads, Vanguard employees, and the investing public who benefited from his commercialization of the index fund.
There’s no shortage of investing knowledge Bogle left behind, but I believe his true legacy will soon become more about the person he was than on the things he did. He loved to write. He penned letters, wrote essays and speeches, and authored many books. The investing public will undoubtedly gain from his research, and many will be able to live much better as a result of his advice to invest early and often in low-cost, highly diversified index funds. To “stay the course” and as he wrote in his letter to me, to “press on, regardless.” Bogle was wise beyond his 89 years, living 14 more years than the average person with a heart transplant. He made the most of it with assertions and philosophical creeds that I’ll leave you with on commitment.
“Commitment and boldness—these are among the things that truly matter, the things by which we can measure our lives, the things that help turn providence in our favor. Their reach goes far beyond how we earn our living, for never forget that none of us lives by bread alone. The well-rounded life requires other commitments, too. These commitments begin with our families. Until we are committed, there is the chance to draw back, but once we commit ourselves to family, all sorts of things occur that might never have otherwise occurred. Each of us must decide for ourselves how much to focus on things, and indeed what things to focus on. But I know that each one of us can profit by some moments of quiet introspection about whether our lives are driven far too much by the accumulation of things, and not nearly enough by the exercise of bold commitment to our family, to our work, to a worthy cause, to our society, and to our world.”
1. Enough : true measures of money, business, and life / John C. Bogle