About creating the first index fund available to the public, which has been called the most important financial innovation created for the individual investor, Bogle said its value was self evident to him: “Before costs are deducted, the returns earned by investors as a group precisely equal the returns of the market itself. The only way for the 100 million families whom the mutual fund industry serves to maximize their share of the financial returns they earn as a group is by minimizing their costs.
“Vanguard took the leadership role in bringing down the costs of investing, ultimately becoming the world’s lowest-cost provider of mutual funds.’’
Bogle doesn’t dodge his career setbacks (fired from Wellington Management Company, after a merger went sour) and mistakes (a policy change that that no longer required shareholders’ approval for fee increases) but he came away wised up: wear your fiduciary hat, not your marketing hat, when devising new strategies and schemes with other people’s money.
In January 1996, Bogle retired as CEO of Vanguard, not because of his age but because of heart disease.
On Feb. 21, 1996, he had a successful heart transplant (from a 26-year-old man). In the years since, he has served at Vanguard as president of the Bogle Financial Markets Research Center (“I’m in my office every day.’’).
Bogle and his wife of 62 years, Eve (“a saint’’) have six children, 12 grandchildren and six great-grandchildren. The extended Bogle family gathers for vacations at “our ancient place,’’ a rustic home on Lake Placid in the Adirondacks, far from the favored getaways of the financial world’s movers and shakers.
Stay the Course, by John C. Bogle (John Wiley & Sons, 279 pages, $34.95).
Eleanor O’Sullivan is an award-winning journalist who writes for Financial Advisor.