A famously frugal straight-shooter who turned conventional investment management strategy on its ear, John “Jack” Bogle earned his first few dollars as a kid in the Great Depression. Proud of the many jobs he had held—paperboy, bowling pin-setter, and ice cream-scooper, to name a few—Bogle spent a lifetime looking out for the average American worker by leveling the playing field for individual investors.

He considered hard-won traditional values like integrity and altruism to be not only personal, but professional guiding principles. Bogle wrote in 2008, “whatever moral standards I may have developed over my long life, I have tried to invest my own soul and spirit in the character of the little firm that I founded all those years ago.”

The “little firm” John Bogle founded grew to be Vanguard, the world’s largest fund company, with “more than 20 million investors, 175 U.S.-based funds, and $3.2 trillion in assets” in 2019 according to kiplinger.com. Not bad for a kid from Jersey. Of Humble Beginnings and Curious Minds

As a scholarship student at Princeton, Bogle claimed he earned average grades. But his senior thesis on the ins, outs, and potential influence of the mutual fund industry was anything but average. The 130-page paper ended up laying the groundwork for his entire investing philosophy and caught the eye of Walter Morgan, founder of the Wellington Fund, who hired Bogle in 1951.

The job with Morgan turned out to be the very launching pad Bogle needed to practice—and prove—the concepts he’d written about as an economics undergrad. Concepts like the argument that mutual funds “may make no claim to superiority over the market averages” and “future growth can be maximized by reducing sales charges and management fees” (cnbc.com).

In other words, Bogle believed investment managers trying to time the market wouldn’t necessarily wind up ahead of market averages and that individual investors should keep more of the money they were paying for management services.  

Bogle founded Vanguard with three employees and a shoestring budget. Armed with experience and vision, he brought two new investment concepts to life...

First, he sought to eliminate sales commissions and lower transaction fees to become a truly low-cost investing platform.

Second, Vanguard was to be client-owned, with no outside owners seeking profits.

Why Vanguard Was So Revolutionary: Inventing The First Index Fund

Shortly after getting Vanguard up and running, Bogle launched his signature achievement: the first index mutual fund ever available to the general public.

A primer on investing basics: investors buy shares in a particular company and earn or lose profits as the price of that company’s stock rises and falls. People pay investment managers to actively manage these kinds of purchases and sales. But Bogle wanted his shareholders to be able to take advantage of broader market exposure, in other words, not to put too many eggs in one basket. Here’s where the index fund comes in.

Prior to Bogle’s first index fund for consumers, “passive” investing like this was a strategy that primarily existed for institutional investors. Bogle’s fund allowed consumers to set up portfolios in the same way, cutting management expenses and keeping earnings competitive.  

Building Vanguard the Bogle Way: Patient Yet Relentless

John Bogle had plenty of critics at first, with the harshest calling his brainchild “Bogle’s Folly,” and even the banks managing the index fund’s IPO suggesting he throw in the towel. But as Jack himself was fond of saying, “the math is the math,” and soon the numbers spoke for themselves.  

As people began investing in Vanguard offerings throughout the mid-1970s and 1980s, the company’s assets rose. Through the 1990s and beyond, Vanguard expanded steadily, offering additional funds and extending services to retirement plans, college-savings plans, and more.

Vanguard’s steady performance and growing client base forced other investment companies to sit up and pay attention. Soon, competitors began offering their own index funds patterned after the original Vanguard 500.

Today, with assets topping six trillion (USD), Vanguard is considered the largest and best provider of index funds in the world. The three charts below help tell the story.

Warren Buffet (a big fan of numbers himself), aptly explained in his 2016 letter to Berkshire Hathaway shareholders, “In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me” (berkshirehathaway.com). For more of Warren Buffet’s insight on Bogle, take a look at this video.

A New Movement in Investing: From the Vanguard Diehards to the Bogleheads

As Vanguard grew, so did Bogle’s reputation—and his adherents. Originally known as Vanguard Diehards in the late 1990s, Bogle’s fans eventually grew into a formidable community of like-minded personal finance enthusiasts who earned the nickname: Bogleheads.

You can think of Bogleheads as the opposite of stereotypical Wall Street hotshots or “day traders.” Instead of chasing market performance, they rely on market averages. That’s because, as kiplinger.com explains, they believe that “even with an ace manager at the helm . . . most actively managed funds have slim chance of beating index funds over the long haul because of their inherently higher costs.”

In addition, Bogleheads preach simple—even downright old-fashioned—strategies like regular saving, mediating risk, and keeping an eye on the big picture. The official Boglehead investment philosophy has 10 points:  

The Boglehead community is dedicated to helping ordinary investors, in Bogle’s own words, “get a fair shake.” To that end, there are countless forums, articles, books, websites, and other resources all designed for individual investors—beginner to expert—to discuss, advise, and practice Bogle philosophies.

Want to Be a Boglehead, Too?

The official Boglehead site is a collaborative effort with resources, references, forums, podcasts, and more all designed to offer tips on everything from estate planning to how to pay for college. If that seems like a lot to take in, it is. But as their own site suggests, “don’t panic.” If you really want to learn the basics of investing the Boglehead way, there are countless community regulars ready and waiting to help you along.

Unsurprisingly, the grassroots investment wisdom of Boglehead forums has spawned books, articles, and numerous other resources, but the best-known of these is likely The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBouf. Their sage and prudent advice promises to provide readers the guidance they need to create long-term wealth and manage financial life like a true Boglehead.

You can also join one of the more than 60 Boglehead “chapters” that meet regularly to discuss financial topics like asset allocation, stocks and bonds, Social Security, and more. You can even start your own. Chapters are invited to participate in a once-yearly national meeting, too, to hear from and rub shoulders with top voices in the Boglehead community.

Investing Advice From the Bogle Library

Purists can learn a lot about personal investing by picking up one of the many books written by Jack himself. Here are a few picks to get you started:

The original:

Bogle on Mutual Funds: New Perspectives For the Intelligent Investor

Experts regard Bogle’s first book as a definitive classic. You’ll get information about the risks and rewards of investing in mutual funds, as well as how to choose between basic types. According to the Amazon blurb: “You'll learn the differences between common stock, bond, money market, and balanced funds, and why a passively managed "index" fund is a smarter investment than a fund managed by someone making weighted bets on individual securities, sectors, and the economy.”

Bogle also describes how to choose a low-cost, reliable investment structure and explains the mistakes many investors make.

A must-read:

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

This title was so popular it warranted a tenth anniversary edition in 2017. Bogle’s aim with this book was to give non-professional investors the tools to create a solid financial future.

He encourages readers to take charge of their own money, understand compound interest and long-term growth, and make the best use of tax deferral.

A look at life beyond investing:

Enough: True Measures of Money, Business, and Life

Published following the U.S. financial crisis of 2007-2008, Enough describes the role greed plays in undermining solid financial market strategy. According to Trent Porter, founder of Priority Financial Partners, “Unlike most books on investing, Enough goes beyond dollars and cents and dives into the values Jack has lived by to obtain his success.”

Insightful and and as relevant now as ever, this book focuses on the importance of living a well-rounded life.