John Bogle……The man, the myth, the legend.

John (Jack) Bogle was born on May 8, 1929 in Verona, New Jersey to William Yates Bogle, Jr., and Josephine Lorraine Hipkins. During the great depression his father lost almost everything and due to alcoholism eventually divorced his wife. John grew up and attended Princeton University, it was here that Jack studied economics and learned about investing. Jack spent much of his time studying the mutual fund industry. Jack graduated in 1951 and went on to the University of Pennsylvania to get his graduate degree. After graduating school he went to work at an investment firm where he quickly rose through the ranks and eventually became the Chairman of the company. Unfortunately Jack headed up a merger that proved to be disastrous and was fired for his involvement in it. Jack learned a lot from this experience and in 1974 he founded the Vanguard Group, which has grown to become one of the well known and successful investment companies in the world. Later in 1976 Jack Bogle created the first index mutual fund. Bogle rationalized that investments were always being compared to an index or average of the market and wondered why not just invest in the index. This simple idea proved to have amazing results. First Jack realized that by removing the need to have a fund manager who constantly buy and sell stocks in an actively traded fund, that he could afford to charge extremely cheap fees to his investors. Secondly Bogle decided to make his fund investors owners of the funds which allowed him to offer even lower fees and return more money to the investors. After doing lot’s of back testing Jack saw that by removing the high fees of fund managers and just receiving the average return of the market that it allowed investors to earn much higher returns with less volatility. Bogle experienced heart problems in 1990 and again in 1996 which lead him to relinquish his role as CEO of the Vanguard Group. He left it in the capable hands of John Brennan, who Jack personally picked. Fortunately Jack Bogle had a successful heart transplant in 1996 and decided to return to Vanguard as the chairman of the board, Jack’s return caused some conflict between him and Brennan, so Jack decided to leave his role as chairman and focus on a personal project called Bogle Financial Markets Research Center, which is a research center at Vanguard.

To this day Jack is celebrated as the father of index investing and responsible for helping people all around the world build personal fortunes through his low fee funds.

 

 

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