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Sam Instone

By: Sam Instone

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February 26th, 2019

11 lessons you'll learn today from one of the greatest investors that ever lived

Investment | Financial Planning | Financial Education

Last month, we lost Jack Bogle.

I can’t help but reminisce about the lessons I learned from him.

He’s had the biggest impact on investors around the globe.

Here are 11 reasons why.

Hat tip to Ben Carlson for this piece.

It perfectly sums up my sentiments.

 

1. Common sense is highly underrated 

The Little Book of Common Sense Investing completely changed how I felt about the world of finance.

Bogle’s ideas on buy and hold, long-term thinking, simplicity, low costs, and more was eye-opening.

 

2. There’s no price on principles

Nathan Most, creator of the instantly tradeable ETF, approached Bogle about making it happen in 1992.

Despite listening to his presentation, Bogle wasn’t interested.

Staying true to Vanguard’s principles, he wanted to encourage a long-term view and discourage speculation.

Long_term_financial_goal

3. Learn how to communicate effectively to be heard

Bogle’s ideas are genius.

Yet he communicates them in a clear, concise way that spreads the message far and wide.

And resonates with everyone.

 

4. Simple beats complex

Bogle helped me realise the immense value in simplicity.

He said:

“Avoid complexity and rely on simplicity and parsimony, and your investments should flourish.”

Complexity-Behaviour-Gap-1

5. Cost matters

Traditional financial services still reward those who sell products, not use them.

Bogle said:

“Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.”

 

6. Perfect is the enemy of good

Bogle once wrote:

“To repeat, while such an index-driven strategy may not be the best investment strategy ever devised, the number of investment strategies that are worse is infinite.”

Better strategies will always exist.

But the odds of choosing a strategy worse than simple indexing are far higher.
Building a portfolio

 

7. Investing shouldn’t be exciting

In an interview, Bogle once said:

“I look at indexing as being simple and, sad to say, boring. Be bored by the process but elated by the outcome. In Vegas, it’s the opposite. You’re elated by the process, by the moment, but you’re bored by the outcome because you know exactly what it’ll be. The more you bet, the more you lose. Investing shouldn’t give you a rush.”

 

8. How to think about the stock market

Speculation vs investing is an important debate.

Bogle said:

“The expectations market is about speculation. The real market is about investing. The stock market, then, is a giant distraction to the business of investing.”

 

9. Long-term thinking leads to better results

Long-term thinking is the foundation of Vanguard’s business strategy…

And Bogle’s investment strategy too:

“This is one of the most important rules of investing. If you never peek from the age of 20 to the age of 70, you’ll rip that first 401(k) statement open at age 70, and I recommend you have a doctor on hand because you’ll go into a dead faint. Your heart might even stop. You’re going to have an amount of money you can’t even imagine.”

 

10. Saving is one of the most important investments to make

I love how Bogle talked about the importance of saving money:

“Everyone is looking for the Answer, and there really isn’t an answer except save. Save more. Invest for the long term, get cost out of the equation, and get diversified to the nth degree.”

11. Money isn’t everything

Bogle died a wealthy man but as The Bogleheads forum wrote:

“While some mutual fund founders chose to make billions, [Jack created Vanguard] to make a difference.”

He certainly pioneered the way for financial services to be more client-centric.

The benefit is a way of investing that removes nagging anxiety…

And frees up time for you to live your life doing what you love.

If you’d like to apply Bogle’s principles to your own investment strategy

And want a financial planner who shares the same ideals, chat to us.

We believe simple beats complex, costs matter and long-term thinking holds immeasurable investment power.

Book a 15-minute discovery call

About Sam Instone

Sam Instone, Director at AES International, is passionate about positive change and ensuring international investors get better results.

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