(The writer is a Reuters contributor. The opinions expressed
are his own.)
By Chris Taylor
NEW YORK Oct 6 If the world of finance has
anything close to a Pope, Jack Bogle is probably it.
The founder of investment giant Vanguard Group, who is held
in wide esteem, revolutionized retirement with low-fee index
funds, and has a moral center that puts the rest of the industry
Rather than enriching himself and his firm with billions of
dollars as he could have done, Bogle passed along savings to the
retirement accounts of individual investors.
For the latest in Reuters' Life Lessons series, we talked
with Bogle about what he has taken away from his 87 years.
Q: WHOM DID YOU LEARN MONEY LESSONS FROM AT A YOUNG AGE?
A: Growing up in the Depression era, I actually lived with
my grandparents for a couple of years, who had a farm in New
Jersey. In those days, grandparents said to grandchildren
anything they damn well wanted to. They were very strict with
high standards, and were inclined to preach to you. And of
course, they were always right.
Q: HOW DID THE GREAT DEPRESSION SHAPE YOUR UNDERSTANDING OF
A: You understand a whole lot about money when there isn't
any. What you learn is that money is hard to come by, and it is
important not to waste it. By the time I was 12, I was working
every summer, including as a pinsetter in a bowling alley. If I
ever wanted anything, I knew I had to earn the money myself.
Q: AS YOU BECAME A SUCCESS, WHAT DID YOU LEARN ABOUT
A: One important factor is that my wife and I are totally
sympatico when it comes to money. She is very thrifty and
frugal, has good values, and is not a big spender.
Q: HOW DO YOU APPROACH PHILANTHROPY?
A: I start with repaying my debts. My biggest debts were to
Blair Academy and Princeton, where I went on scholarship. I also
think the local United Way is extremely important, which I made
a high priority at Vanguard. When you live somewhere, you have
an obligation to that community. Then there is Bryn Mawr
Hospital, where I got my heart transplant.
Q: DID YOUR HEART TRANSPLANT IN 1996 CLARIFY WHAT IS TRULY
IMPORTANT IN LIFE?
A: I had to wait 128 days in a hospital for a transplant,
not knowing if I was going to live or die. So I feel an enormous
sense of gratitude to my angels of mercy - the doctors and
nurses, and to the heart donor who was only 26 years old. I even
wrote a letter to the family, but I never heard back. It makes
you value your life and your good fortune, and praise the Lord.
Then you get on with your new life. I am 87 now, and I count my
blessings every day.
Q: WHAT MONEY MISTAKES IN YOUR CAREER STAND OUT TO YOU?
A: Oh my God, let me count the ways. I guess buying
individual stocks, which I did through a broker for about a
dozen years back in the 1950s and 60s. It eventually occurred to
me that I wasn't getting anywhere.
Q: WHAT IS YOUR PORTFOLIO BREAKDOWN RIGHT NOW?
A: I am about 50-50 in stocks and bonds. At this stage in my
life, I am looking more at maintaining what I have, than
expecting additional growth. It looks like a risky time to me:
Stocks are fully priced, and investors should plan on lower
returns in the coming decade, for both stocks and bonds. Stay
the course, have a balanced program, and save more if you can.
That is the only thing to do.
Q: WHAT LIFE LESSONS DO YOU PASS ALONG TO YOUR CHILDREN AND
A: I don't want to lecture to them, so I just try to live a
life they could learn from, by observing what I actually do. A
lot of parents talk a big game, and then don't live up to that.
That is hypocrisy. So I do my best to live a straight and honest
(Editing by Beth Pinsker and Bernadette Baum)