Vanguard Founder on Building Wealth
John C. Bogle – his nickname is Jack - is an investing legend… he founded The Vanguard Group in 1975, created the first ever Index Fund and has grown Vanguard into one of the largest asset managers in the world – Vanguard now manages over $2 trillion,...
Summary
John C. Bogle – his nickname is Jack - is an investing legend… he founded The Vanguard Group in 1975, created the first ever Index Fund and has grown Vanguard into one of the largest asset managers in the world – Vanguard now manages over $2 trillion, that’s phenomenal!The Magic of CompoundingBogle recently wrote a guest article for CNBC titled “Jack Bogle’s advice for a rocky market: Follow Ben Franklin”… and I though this article was very timely because we’ve already had a rough start to the year with the Dow down about 4.5% in January and high volatility in the first week of February… and research shows that January performance often sets the tone for the rest of the year… so let’s see what Bogle’s advice is for a potentially rocky 2014… it’s actually pretty simple and easy to implement.Bogle invokes Benjamin Franklin and extols his investment wisdom… that simplicity trumps complexity in the stock market. And Bogle begins with what he calls Franklin’s acute understanding of the miracle of compound interest. In 1794, Franklin bequeathed a thousand dollars each to his native city of Boston and his adopted city of Philadelphia, to be kept in an interest bearing account over a period of 200 years… good ol’ Ben assumed a 5% average annual rate of interest and surmised that the $1,000 would grow to about $17.3 million in 200 years. In reality, due to various financial and legal reasons, Boston’s fund grew to about $5 million by 1994 while Philadelphia’s fund grew to less than half that amount - $2.25 million. And even though these amounts underperformed dear Ben’s calculations, they still handsomely showed the explosive mix of rate of return and time… the magic of compounding!The Tyranny of Compounding CostsBut, of course, 200 years is impractical for most of us saving for retirement, so Bogle focuses on a 65-year time horizon that assumes a 45-year working career from ages 20 to 65, and 20 years in retirement… and says $1,000 invested at age 20, compounded at about an 8% average annual rate of return, could grow to almost $150,000 through simple compounding... but before we get our hopes up, Bogle hastens to add that in reality, fees and commissions would eat up about 2.5%... and reduce your actual rate of return to about 5.5%... so that $1,000 will grow to only about $32,500 – not $150,000 - that’s a whopping 80% reduction in wealth accumulation because of what Bogle calls the tyranny of compounding costs that significantly overcome the magic of compounding.So while many investors take fees and expenses in stride, they do not realize that the reduction in effective annual rates of return take a really huge bite out of their total investment gains.Think of it this way – you put up all the capital, but money managers, marketers of investment products and stockbrokers – who put up zero capital and assumer zero percent risk - receive fully 80% of the return… a shift from owners’ capitalism to managers’ capitalism that devastated investor returns.So the way to build wealth is to avoid the high cost, high turnover tactics that characterize our financial system… and, instead, to rely more on the magic of compounding… perhaps through low-cost index funds… and, Bogle says, while the interests of a business are served by the saying “Don’t just stand there. Do something!”, the interests of an investor are served by the exact opposite… “Don’t do something. Just stand there!” and let time do its magic.
First published
12/31/2014
Genres
Duration
6 minutes
Parent Podcast
The Steve Pomeranz Show
View PodcastSimilar Episodes
-
The Pomeranz breakout, why Ozuna underperforms, and whether Castellanos can field – Season 5, Ep., 34
11/15/2019
Host Mike Petriello and national editor Matt Meyers look at why it made sense for Atlanta to sign Will Smith, note the incredibly impressive feats of Drew Pomeranz, wonder why Marcell Ozuna keeps underperforming, and investigate whether Nicholas Castellanos can play credible defense. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices
Clean -
9/22/22 Steve Jones Show Hour 1
09/22/2022
9/22/22 Steve checks in with the local high school round table.The post 9/22/22 Steve Jones Show Hour 1 first appeared on Steve Jones Show.
Clean -
9/21/22 Steve Jones Show Hour 2
09/21/2022
9/21/22 Steve examines today’s Play-by-Play of the Yankees game.The post 9/21/22 Steve Jones Show Hour 2 first appeared on Steve Jones Show.
Clean -
9/21/22 – Steve Jones Show Hour 1
09/21/2022
9/21/22 Steve talks on how streaming services are messing with how to catch upcoming games and Steve speaks with Brian Tripp about his experience on the side lines.The post 9/21/22 – Steve Jones Show Hour 1 first appeared on Steve Jones Show.
Clean
Similar Podcasts
-
The Women In Business Radio Show
08/11/2020
Women In Business Radio Show
Tune in for fun, inspiration and unfiltered discussions as host Sian Murphy interviews down-to-earth businesswomen sharing ideas, tactics and stories. Regular features include recommended books, tools, lessons learned and top tips for business.For information about being a guest on the show, newsletters and more visit...https://thewomeninbusinessradioshow.com/linksBecome a supporter of this podcast: https://www.spreaker.com/podcast/the-women-in-business-radio-show--1228431/support.
Clean -
Marketing Madness by the Bridges Twins
08/11/2020
Marketing Madness by the Bridges Twins
On the Marketing Madness show we tackle challenges submitted by our listeners....and we have fun sharing the solutions. When you want to find answers to those burning questions that Google can't quite help you with, this is your show. With experiencing ranging from development of large scale web applications, managing 7 figure+ monthly Adwords accounts, working in the Fortune 500, co-authors of 3 books and much more you can submit us any challenge and we will tackle it. Listen in, have fun, grab a coffee and join us today.
Clean -
RNG Show
08/18/2020
RNG Media
Every season of Survivor we draft the castaways onto separate teams in a fantasy league and see who among us can form the ultimate team that will outlast the rest. Join us every week as we run through major events from the latest episode and make strategic trades to edge out the competition.
Clean -
High Profits Reviews and After Show - AfterBuzz TV
08/15/2020
AfterBuzz TV
The High Profits After Show recaps, reviews and discusses episodes of CNN's High Profits.Show Summary: Two entrepreneurs try to build the first marijuana franchise business.
Clean -
SOUND OF THE UNDERGROUND
08/15/2020
SOUND OF THE UNDERGROUND
Podcast by SOUND OF THE UNDERGROUND
Clean -
SCORCHING ARYes - (TRANCE SHOW)
08/15/2020
ARYA (Jignesh Shah)
SCORCHING ARYes - ( TRANCE SHOW ) is a monthly Trance Podcast with the newest / best Progressive , Uplifting & Driving Trance. One hour non-stop mix with " ARYA ( Jignesh Shah ) " Track has been selected from his favorite artist Like John O'Callaghan , Armin van Buuren , Aly & Fila , Ashley Wallbridge , Sean Tyas , Standerwick , ReOrder , Darren Porter and many more..Supported by : Aly & Fila , Bjorn Akesson , Ben Nicky , Black Hole Recordings , Bobina , Ferry Corsten , FSOE ( Future Sound of Egypt ) , Jochen Miller , Ministry of Trance , OMNIA , Raz Nitzan Music , Standerwick , Susana Vocalist , Trance Attack ... you can Leave your request at.. scorchingaryes@gmail.comFor more updates-http://www.facebook.com/djaryaproductionhttp://www.facebook.com/SCORCHINGARYesPodcast
Clean -
Depression Detox Show | Daily Inspirational Talks
08/12/2020
Malikee Josephs (Muh Leek - Jo Seffs)
Get UNSTUCK. Be inspired by the best motivational, inspirational, and brain health experts to live a happier and more purposeful life! Join host Malikee Josephs Monday through Friday for your dose of motivation. If you’re struggling with feelings of unhappiness, loneliness, emptiness, anxiety, sadness, grief & loss, or not having a sense of purpose, this show is for YOU! ——————If you are in need of medical care, please consult with a therapist or physician.If you are in a crisis or thinking of harming yourself, please call the National Suicide Prevention Lifeline 1-800-273-8255. Calls are private and confidential. CDC Mental Health recommendation pagehttps://www.cdc.gov/mentalhealth/tools-resources/index.htm
Clean -
Rock The Walls
08/12/2020
idobi Network
Always on the frontlines, Rock The Walls is hosted by music fan and devoted radio host Patrick Walford. Over one thousand interviews are already in the can—from being the first ever radio interview for bands like I Prevail & The Story So Far, to speaking with heavy & alternative music legends such as The Used, Anthrax, Parkway Drive, Godsmack, Korn, Sum 41, Bring Me The Horizon, A Day To Remember, and hundreds more.After doing the show for over a decade, hosting Warped Radio, bringing you your idobi Music News, and Music Directing idobi Howl, along with hitting the road for coverage on the Warped at Sea Cruise in 2017 & the final Vans Warped Tour in 2018, Walford is a long trusted voice in the music scene. Tune in to hear in-depth interviews you won't hear anywhere else with all your favorite heavy & alternative artists, along with spinning the best in new music.
Clean -
Ask The Gluten Free Chef
08/15/2020
The Gluten Free Chef
Podcast where questions pertaining to gluten free living, gluten free eating, and celiac disease are discussed, dissected, and laid bare.
Clean -
Cokie Roberts: Capital Dames
08/11/2020
The Huntington
Author and political commentator Cokie Roberts discusses her new book Capital Dames, The Civil War and the Women of Washington, 1848-1868, which explores the lives of the women of Washington D.C. during the upheaval of the Civil War. Roberts has previously written about the vital female contributions to the nation's early years in her New York Times bestselling books Founding Mothers and Ladies of Liberty.
Clean -
STAR WARS The Vintage Rebellion Podcast
08/11/2020
The Star Wars Vintage Rebellion Podcast - SWTVR - Podcast Team
The Star Wars Vintage Rebellion Podcast is brought to you by five vintage Star Wars Toy collectors. The team discuss vintage star wars collectibles, recent threads and stories from across social media and forums, the current vintage market, oddball items, as well as covering stories that have been rocking the vintage collecting community. There are also interviews with all types of collector as well as an events section where you can discover Star Wars events in your area. All this plus much much more, so download this podcast now!
Clean -
Retro Blissed
08/12/2020
The Network
Two gamers with a love for the history of video games play and discuss the best and worst titles in existence. Blow out your NES cartridge, check the batteries in your remote, and memorize your Game Genie codes… It’s time to get RETRO!
Clean
Discussion (0)
No comments yet
Be the first to share your thoughts about this episode!