When I think of investing, often times my investment mentor comes to mind.
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I started investing many decades ago and I would like to share a key segment of my investment journey.
In my teenage years while working in my dad’s store I overheard an investment conversation between my dad and the local banker. The conversation raised my interest in investing, therefore, I set out to learn more about the topic.
My approach to learning more about investing was to learn as much as possible by reading books and other publications. I also thought that a person who had great wisdom and knowledge about investing might be a great asset for getting my many questions answered.
Since I did not have much money at that time, I decided to start my learning by reading personal finance and investing magazines. As I read more and more magazines one name was mention in multiple articles. That name was John Bogle.
John Bogle was the legendary founder of The Vanguard Group and creator of the index mutual fund for individual investors. Bogle authored several books, conducted lectures and give interviews at every opportunity throughout his illustrious career. His investment strategy was simple, yet highly effective: buy and hold for the long term.
So, I decided to study Mr. Bogle's investment principles. As I began to immerse myself into John’s teachings I became more knowledgeable and confident in my understanding of how the market functions. Above all, Mr.Bogle's information was so convincing.
I finally saved enough money to start investing. As a result, I decided to start investing with John’s company the Vanguard Group.
Lessons That I Learned
Over the years, John Bogle taught me to invest consistently and regularly. As a result, my monthly investing has continued for decades. I am still amazed by how a small amount of money invested over a long period of time will increase in value.
John Bogle taught me that investing is for the long term. Therefore, it takes time to make money. He taught me to not worry about the day to day movement of the markets, stay focus on the long term.
I learned that cost matters. The fees that you pay for your portfolio management and brokerage fees will impact your investment returns. The fees you pay could be the difference between a positive or negative return.
The miracle of compounding returns became crystal clear to me. Compounding is the accumulations of wealth over the years generated by annual returns. Some people call compounding returns the eighth wonder of the world, others say that it is the greatest mathematical discovery of all time.
My friend John had a dream that he shared with his followers in his 2009 book titled “Enough”. In fact, it was 5 dreams for redesigning the mutual fund industry.
He dreamed of an industry that values stewardship more highly than salesmanship.
Dream 1: A fair shake for shareholders
An industry designed to give investors a fair shake in terms of cost.
Dream 2: Serving the investor for a lifetime
Design an industry that will create for our citizens a sound, integrated, disciplined, and secure retirement system. We owe no less to our investors and to our nation.
Dream 3: Long-term investment horizons
The industry must focus on traditional long-term investment strategies.
Dream 4: Serving long-term investors
Mutual funds must be designed to be held for the long-term not for short –term investors or day traders.
Dream 5: Put fund investors in the driver’s seat
Mutual funds must be beholden, first and foremost, to the shareholders who elect it.
Mr. Bogle dreamed of an industry focused on stewardship – the prudent handling of other people’s money solely in the interests of investors.
His goal was to build a company that stands for stewardship. For only to the extent that Vanguard adequately serves the human beings who have entrusted them with the management of their wealth will Vanguard itself survive and prosper.
My family and I would like to extend our sincere thanks and gratitude to The Vanguard Group for providing an opportunity and guidance for the small investor to achieve their financial goals.
In closing, I would like to share with you a few of my favorite quotes by John Bogle.
“Don’t look for the needle in the haystack. Just buy the haystack!”
“The two greatest enemies of the equity fund investor are expenses and emotions.”
“When there are multiple solutions to a problem, choose the simplest one.”
“The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.
“The greatest enemy of a good plan is the dream of a perfect plan.” Stick to the good plan. Traditional”
“Owing the stock market over the long term is a winner’s game. But attempting to beat the market is a loser’s game.”
“Time is your friend; impulse is your enemy.”
“You know the rule of 72, divide the number into 72, any number you want, and that’s how long it will take your money to double.”
“It’s amazing how difficult it is for a man to understand something if he’s paid a small fortune not to understand it.”
“I will create value for society, rather than extract it.”
John Bogle was truly a small investor’s friend.
Now, you know why I am thankful to Mr. Bogle for all that he has done for the small investor and my family.
John Clifton Bogle (May 8, 1929 – January 16, 2019)
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I am not an affiliate for The Vanguard Group.