There once was a man who came to a crossroads in his life. He chose a path no one had ever taken. He took the red pill you might say. His name was John Bogle. Mr. Bogle changed the world, helping people like us in ways that go far beyond investing. He provided us a streamlined path to financial freedom. As always, the path was rocky and full of craters, but he persevered. This is his story in a nutshell.
John Bogle was born on May 8th, 1929, a pretty scary year if you are familiar with the history of stock markets. He died on January 16th, 2019. During those 89 years, he changed an entire industry even though that industry was not ready to change. He had an abdominal will and that drove him day by day to do his very best for the average investor. He was successful, but it wasn't easy.
His family was well off when he was born and then they lost it all due to the Depression. Divorce followed and life got a lot more challenging for him, his brother, Blair, and his mother, Josephine. He did well with his studies and that led to being accepted at Princeton University. This is where things started changing for the better. He wrote his senior thesis on The Economic Role of the Investment Company.
This got him a job with Walter Morgan, founder of The Wellington Fund. He quickly rose up through the ranks and was being groomed to take over one day and then tragedy struck. He gave the go ahead on a merger that failed miserably. It was a mistake that would cost him dearly. He got fired. Thank god he did! It would end up changing the history of the Financial Services Industry.
John Bogle was able to finagle his exit in such a way that he was able to create The Vanguard Group in 1975, which lead to creating the first publicly traded index fund. This fund would track the S&P 500 without any active management, keeping the fees very low. He believed the investor would come straight to Vanguard, eliminating any commissions to a broker. The industry laughed, calling it Bogle's Folly.
It was slow going for a while. It usually is when you create something new and very different. He was challenging the very industry that surrounded him. Bogle believed the index fund would serve the average investor best over the long term as it squeezed out most of the fees paid to Wall Street. Wall Street tried to run him out. He held his ground and little by little, the investors came through the Vanguard doors.
Decades later, research started coming in from academics showing that index funds outperformed managed funds year by year and decade by decade, primarily because of the fees (and the elimination of the commissions paid to the brokers). John Bogle was found to be right all along. That was when billions of dollars started flowing in. Wall Street became concerned. They stopped laughing.
Vanguard became the biggest Mutual Fund Company in the world with money flowing in from all over to that first index fund and then other index funds, tracking other markets like the U.S. bond market and International markets. This forced Wall Street to change its ways. Company after company created their own index funds to compete, not to serve the investor, but to stop the flow of money leaving their brokerages.
Mr. Bogle did this all with a bad heart, finally getting it replaced in 1996. This extended his life another 23 years. Did he become a billionaire? No, he created Vanguard as a not for profit company owned by its shareholders. The investors who bought the mutual funds became the owners of Vanguard. Bogle just had to pay the bills and the benefits to the employees. No profit was required. Fees continued to fall.
Fast forward to 2025. John Bogle has been gone for 6 years, but his legacy is here to stay. The mutual fund industry that used to charge an 8.5% front end commission (load) and an average expense ratio of 1.5% per year, now charges no commissions in most cases and an expense ratio under 1% in most cases. The Vanguard 500 Index Fund (VFIAX), will cost you .04% per year.
In the end, billions of people will benefit from what John Bogle did once upon a time, transferring wealth from Wall Street to us, the investors. Some folks know who John Bogle was, many do not, but they are benefitting nonetheless. I for one, am forever grateful to John Bogle for his commitment to help us instead of the industry and himself. He saw no need to become a billionaire.
Warren Buffett agrees with me. Watch Buffett's praise of John Bogle here. Watch a tribute to John Bogle's legacy here. There is a long list of video's on YouTube with John Bogle providing advice and guidance dating back many decades. I encourage you to set aside some time and take that information in. Soak it up and then apply it to your life. You will benefit in ways that go far beyond investing.
What can we take away from John Bogle's crusade? One person can stand up for what is right and serve others instead of himself. The way we make the world a better place is not by waiting for someone else to do it. WE do it. We do it every day by what we think and ultimately, by what we do. One person can change the world. John Bogle proved that and so can YOU. The Path to Prosperity awaits!
