Learn Investing From Jack Bogle

Just a quick update. Im back after a about a half a week of rest after my surgery, which went very well. I just have another incision on my chest and some discomfort while laying down, but other than that everything is fine. Im glad to be back and I should be writing articles at a normal pace from now on. Thanks to everyone who sent well wishes and was concerned from my last article on the subject. Anyway, onward!

If you dont know who Jack Bogle is, he is on the same level with Warren Buffet Ideologically and has changed the way most people invest their money. The idea of people passively investing and slowly becoming rich is in many ways a side effect of the products Jack Bogle brought to the market. When Jack Bogle was starting out in the financial world, he realized that many mutual funds were charging a hefty expense ratio for their customers and basically taking a ton of their money away in fees.

Fee gouging or selling “loaded funds: is still a practice that goes on today, but on a much lesser scale compared to the past. Because low fee options werent available to even recommend, even if you were someone looking to suggest a low cost solution, it simply wasnt available. Jack Bogle noticed this and he also noticed that many mutual funds werent even selling many stocks, but just holding them for long periods of time. He figured that he could do the same thing at a much lower rate and still make it very profitable.

This is how Vanguard and Jack Bogle pioneered the modern day index fund. Index funds track everything from sectors of the market, to the whole market or even international markets, by holding core positions that make up the percentage of the market. They are then able to sell shares of these indexes and rebalance when necessary. However, you see very little turnover with index funds so the costs of running them ends up being very small.

If you seer a mutual fund with a ton of turnover it means they sell and buy different products very often, which not only has tax implications but data shows is inefficient in the long run. There are a group of hardcore Bogle supporters that believe the only fund you need to own is the Vanguard Admiral Total Stock Market Index, also VTI which is basically the same thing, but in ETF form and slowly add bond exposure as you get older. By reinvesting the dividends and adding money each month, it is actually quite easy to grow your money to points you once thought impossible.

As long as the entire stock market grows in value in the long run, which I think is a pretty good bet, you will continue to gain money. It isnt a flashy or appealing way to make money, in fact its very boring, but it will make your retirement easier and open up many opportunities for you when you decide its time to quit. You wont have to work a job until you are 70 years old and you can live life comfortably, something many Americans wont be able to do. Invest like Jack Bogle, be boring, be patient and benefit from it.

-Calaber24p