John Bogle was a Wall Street titan who didn’t act or talk like a Wall Street titan. The mutual fund manager pinched pennies on restaurant tabs and skimped on hotel costs by taking an early Amtrak train from his Pennsylvania office to meetings in Manhattan.
More significantly for investors, Bogle despised fees and hated the huge compensation packages collected by company CEOs and by hedge fund managers.
Bogle, the founder of the mutual fund giant Vanguard, died in January at age 89. We have summarized four of his books, and our site has devoted a channel to Bogle and his contrarian philosophy about investing and life.
He summed up his thoughts in Enough, a 2008 critique of financial markets. Bogle called out the massive compensation packages for the CEOs of Citigroup (who had earned $138 million in a recent year), Merrill Lynch ($320 million) and Bear Stearns ($232 million).
Bogle didn’t see massive compensation packages, private jets and other trappings as things to strive for. Rather, he viewed them as symbols of unabashed – and destructive — greed.
“Success,” he wrote, “can be measured not in what we attain for ourselves but in what we contribute to our society.”
Bogle was a prolific philanthropist who regularly gave large chunks of his salary to charity. The book’s title referred to the notion that sometimes enough is enough – that the goal of life and investing shouldn’t be to amass huge sums but to live virtuously and honestly.
As Bogle scanned the horizon of the financial industry, he saw few examples of that ethos among his peers. So Bogle made it his mission to warn investors about the sharks circling their portfolios. He urged consumers to be wary of commodities funds, exchange-traded funds, managed-payout funds and other “innovations.”
“If fund managers can claim to be wizards at anything, it is in extracting money from investors,” Bogle wrote.
What’s more, Bogle cautioned, the mutual fund industry only masqueraded as a steward acting in the best interests of investors. In reality, the industry became a sales machine that boasted far better returns than its customers.