Why are you a boglehead ???

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Were you poor growing up ?

I grew up dirt poor ( Eg. had to go hungry on somedays)
3
2%
I grew up poor (Eg. never went hungry but shopped at thrift stores etc.)
21
12%
I grew up in a working class family
90
51%
I grew up in an upper middle class family (family had nice house, two cars etc.)
63
35%
I grew up in a rich family - (Eg. got my first sports car when i was 16 )
1
1%
I grew up filthy rich - (Eg. mansion with 10 butlers, private jet, 1M birthday parties etc. )
0
No votes
 
Total votes: 178

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rex
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Why are you a boglehead ???

Post by rex »

I was recently talking to a gentleman who does consulting work in organizational behavior and he mentioned that often our experiences while growing up shapes our perspectives - which i believe is true. Just curious to see if any of us became bogleheads to get a security blanket that they never had while growing up.

-Rex

*EDIT*

folks, my apologies if you guys found the poll confusing. But nevertheless, thanks to all who shared their valuable experiences. A few clarifications:

--> I was trying to find out if growing up poor taught you to be cautious with money as much as the other way around - if you grew up in a upper middle class/ rich household, your parents probably taught you better money management and you become careful with money. I was just talking to our part time nanny yesterday and she still spends every penny she makes while she lives rent free at her parents house. She's in her twenties and does not have even basic money management concepts. On the other hand, I have colleagues who grew up upper middle class and are still very careful with their money because their parents taught them how to manage their money.

--> on the other hand , I also know colleagues who grew up rich and that makes them spend every cent of their salary to keep up their lifestyle . there are also people who grew up poor and never want to end up in that situation again and as a result is very careful with their money.

--> as for myself, I've seen both sides of the coin -- I grew up in a foreign country in relative wealth and remember being very much a spendthrift. that all changed when my father sent me over to Canada when I was 17 and I was on my own. I worked my way through school and there were weeks when I was living on rice and beans for weeks at a time - that made me very careful with my money as I never want to be in that situation again.

so in the end , after reading through the wealth of experiences here it seems like there are two ways we become frugal - either our parents taught it or we had some hardship experiences which taught us frugality.

-rex
Last edited by rex on Sun Apr 21, 2013 10:43 pm, edited 1 time in total.
Leesbro63
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Re: Why are you a boglehead ???

Post by Leesbro63 »

I'm a Bhead because I tried everything else! Allocate properly, buy, hold, keep costs and taxes low and hold on is as good as it gets. [Political comment removed by admin LadyGeek]
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G-Money
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Re: Why are you a boglehead ???

Post by G-Money »

My socio-economic status growsing up didn't lead me to become a Boglehead. It was simple math.
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G-Money
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Re: Why are you a boglehead ???

Post by G-Money »

Also, this is a personal quibble, but I really don't like threads that ask one question in the title and then have a completely different poll question. It implicitly requires responders to agree to the premise that the different questions are related. Since I disagree with that premise in this case, I didn't respond to the poll.
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Re: Why are you a boglehead ???

Post by TTU »

Because it makes sense
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Re: Why are you a boglehead ???

Post by Cernel »

G-Money wrote:Also, this is a personal quibble, but I really don't like threads that ask one question in the title and then have a completely different poll question. It implicitly requires responders to agree to the premise that the different questions are related. Since I disagree with that premise in this case, I didn't respond to the poll.
+1

I would agree, the poll question/responses have nothing (or very little) to do with why I became a boglehead.
When I was growing up, my parents taught me such money management skills as: 1) pay yourself first, which taught me how to save, 2) live below your means, thus I really did not become a materialistic type person that had to keep up with the Jones', 3) never buy anything you can't pay cash for, thus I learned how to stay out of debt, and plan for the future which helped me establish goals. These principles/skills served me well and as I grew older I started to learn more about managing my savings. I tried a lot of different things, most of which didn't work, but when I got exposed to the boglehead philosophy, I finally found an approach that made sense, was backed by data and most importantly, allowed me to sleep comfortably at night. So here I am, 60 years old having been retired for 4 years and now "staying the course."
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Taylor Larimore
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Post by Taylor Larimore »

Rex:
I started investing with a stock investment club in 1950. After a few years of mediocre results, the club disbanded. I tried various investment methods over the years. My worst mistake was getting into market-timing. I once published a market- timing newsletter -- to my great chagrin.

Fortunately, I read two great books that made me a convert to the Boglehead Philosophy. One was an early edition of Malkiel's classic Random Walk Down Wall Street. The other was Bogle on Mutual Funds. These two books, based almost entirely on logic and academic research, make such a strong case for a simple, buy and hold, low-cost, index mutual fund portfolio that I became a convert in the late 80s -- and consequently more worry-free and financially successful than I ever dreamed.

It is rewarding to share with members of this forum what I learned (the hard way): The Bogleheads Investment Philosophy

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Sheepdog
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Re: Why are you a boglehead ???

Post by Sheepdog »

I agree that the poll question has none of the reasons why a person would become a Boglehead. They may have something to say how they developed economically in their life, however. Nevertheless, I can't answer with only one of those selections.
My 1st 6 years was in The Depression....father lost job, lost house, soup kitchens, no welfare available, father in federal prison one year because he stole $20 from the mail to feed his family (they did not give second chances then even on first and only offense), dirt poor, yes, but never hungry as I can remember..
2nd 6 years, moved to new city, father and mother were able to work at low paying jobs.
3rd 6 years, parents was a normal working class family, but did not earn enough to save much; however in that period I was able to work(paper routes, cut lawns, sold punch tickets) and saved to have the things I wanted.
4th 6 years, joined the Marines, and earned enough to start a college education (GI Bill) and in this period, as a sign of economic progress, I bought an automobile which my parents were never able to purchase.
Investing beyond savings accounts and CDs did not start until decades later.
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Re: Why are you a boglehead ???

Post by nisiprius »

rex wrote:I was recently talking to a gentleman who does consulting work in organizational behavior and he mentioned that often our experiences while growing up shapes our perspectives - which i believe is true.
Me, too.
Just curious to see if any of us became bogleheads to get a security blanket that they never had while growing up.

-Rex
Seems like a non-sequitur. And a little... patronizing. (Plus, tendentious--when I think of "security blanket" I think of Charles M. Schulz, Peanuts and Linus's security blanket, which was irrational, ineffective, and infantile). Security is of course a multidimensional thing, and there is more than one kind of security, but on a 1-10 "feeling-secure" scale I'd probably score pretty high. I grew up in a reasonably pampered upper-middle-class environment, where 80% of my high school went to four-year colleges. My folks paid my tuition at MIT. My best recollection is that I felt generally safe and secure throughout childhood. I felt some emotional insecurity in adolescence and college but probably no more than average. I don't recall ever being troubled by financial security until I was in grad school, but it didn't really sink in until my parents died when I was in my thirties and I realized that I was well and truly on my own.

I don't think any of this had any particular connection with a Boglehead approach. I think it was a result of having been trained by my folks and by college to--sorry, no way not to sound smug about this--be an independent and skeptical thinker.* And, I am someone who is not too socially oriented and thus not someone who actively seeks and wishes to identify with the prevalent thinking. There are social types who are motivated by wanting to look right, act right, and ascend in the pecking order--manager types, perhaps. And, on the other hand, let's say, engineer, individual contributor, craftsman types who like doing things with stuff, and, even if they are OK with collaboration and people skills, see them as subordinate to that end.

My financial thinking was strongly shaped by Andrew Tobias' book, The Only Investment Guide You Will Ever Need. It was unlike the blarney that wafts from the financial community. The Kiplingers of the world seem to approach the topic from the point of view that financial planning means choosing from among all the fine products offered by brokerages. I think what made Tobias' book so helpful is that it was written by someone who was not directly working within the investment industry, and approached investing with a broad view that included more than stocks and mutual funds. How many investment books bother to say "chain letters never work?"

I think it was probably his book that first mentioned the Vanguard Index Trust (500 Index), and all I can say was that I got it. That is, I got the idea, and I got my first actual shares of the 500 Index Fund in, I believe, 1986.

It occurs to me that I should give TIAA-CREF some credit, too. I was fortunate enough to work for some years at a quasi-academic nonprofit that used TIAA-CREF, and the self-help materials and the TIAA reps were reasonably straight shooters, with advice that was very much in the Boglehead spirit.

*Growing up, our family always watched "Disneyland" together on TV, and sometimes they would have one of their nature documentaries, which they called "True-Life Adventures," and the narrator--named Winston Hibler, I think--would solemnly say things like "Mother Nature has given the squirrel the wonderful instinct to store up nuts in the winter," and my dad would holler at the TV, "Because the ones that didn't, DIED." "Teachable moment," as they say. My dad hollering at pompous authorities on TV probably had more to do with my becoming a Boglehead than his paying my way through college.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
enderland
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Re: Why are you a boglehead ???

Post by enderland »

I took Financial Peace University and read I Will Teach You To Be Rich, then while searching for information about investing stumbled on this forum.
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DaleMaley
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Re: Why are you a boglehead ???

Post by DaleMaley »

Boglehead, n. 1. One who lives below their means so they can save money. 2. The money saved is invested in a diversified portfolio of low-cost index funds. 3. An asset allocation is selected which allows sleeping all night during stock market downturns and no panic selling.

I probably learned to live below my means from my parents. My dad was a small-scale farmer who raised 4 children and got them through college. My mother and father never attended college. They were able to save a little money and invest it. I can't count the number of times I heard from them about automatic savings, "If you can't touch it, you can't spend it."

I learned about index funds back in 1990 when I was doing research for a term paper in my MBA finance class. I switched all of my actively managed stock mutual funds to Vanguard index funds.

I learned more about the cost advantages of index fund investing by reading Jack Bogle's books.

I learned about diversification by reading books by several authors including Larry Swedroe and Rick Ferri.

I learned about asset allocation from reading many books and performing back-testing comparisons using Simba's spreadsheet of historical returns.
Last edited by DaleMaley on Sun Apr 21, 2013 7:20 am, edited 1 time in total.
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Re: Why are you a boglehead ???

Post by Dopey »

I tend to think I'm smarter than most people, even at their own jobs. It just makes sense that I wouldn't trust a financial adviser...

Plus I'm a cheap a$$
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Re: Why are you a boglehead ???

Post by bungalow10 »

I'm a Boglehead because my dad told me when I got my first "real" job to put as much as they'd let me in my 401k right away. He said if I ever got in a pinch, I could give myself a quick "raise" to help me through. It made sense and got me started on saving. I think about 18 months later I bought my first house and a year after that I started my Roth IRA - I was 25. Starting off on the right foot made me see how much easier it was to live below my means than to have my income chasing my lifestyle.
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Re: Why are you a boglehead ???

Post by FedGuy »

I also didn't answer the poll question, both because the question doesn't really ask why I'm a Boglehead and because none of the given answers are accurate for me.

I've always been a saver and would have ended up a Boglehead after discovering this forum regardless. I remember opening a "young savers" account at a local bank when I was a kid with $82 I had saved up from allowances, birthday gifts, and holiday gifts. My sister, on the other hand, was always a spender. She and I both inherited something like $15,000 when I was in high school and she was in college; I saved every penny, while she spent all of her inheritance on various frivolous things while still in college, graduated, and then asked to borrow most of my money. For various reasons, I felt obligated to say yes, even though I was annoyed by the whole thing. It was years before she started paying me back--a task that was complicated by the fact that she ran into trouble with credit card spending and all her cards were cancelled--and then she lost her job and stopped paying me back. Years later, after she was married, her husband asked to borrow some money from me. She had told him that she still owed me money, so he assumed her debt and proposed a comprehensive repayment schedule at a generous interest rate. The full loan was finally repaid about two years ago. It had been close to 20 years.

In any case, the reason none of the poll answers work for me is because our financial fortunes changed. I grew up in a comfortable, secure, upper middle class family. My father worked, and my mother was a housewife. We weren't rich, but I was never aware of any financial concerns. Early in my high school career, though, my father left his high-paying job to start his own business. It was just successful enough to keep him from running back to corporate America, but overall it didn't do well, and its fortunes declined over time. After a lifetime of financial security, by junior year of high school it looked like I wouldn't be able to afford to go to college, which was truly frightening.

It all worked out--the college I attended offered me an amazing financial aid program (they gave me an insane amount of grants, no work study, and a low-interest rate loan whose balance was small enough that, once I started paying down principal after paying off my higher interest loans, I fully repaid in something like eight months).

The experience didn't cause me to become a Boglehead; I was pretty much born a Boglehead. But it did teach me not to take financial security for granted, and prompted me to abandon my vague hopes of an academic career in favor of a less fulfilling but higher-paying legal career.

Incidentally, my father tried getting a corporate job again years later, but by that point he was old enough that no one would give him a chance. He ended up getting a low-paying retail job. My mother did what she could but her opportunities were limited after 20+ years out of the workforce. My parents are now in their 70s and not doing all that well financially. Watching that happen has left me with a big distrust of entrepreneurship, and a visceral reaction every time someone on this board advises a stranger to "start a business."
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Re: Why are you a boglehead ???

Post by NYBoglehead »

Because I work to hard to have my money pay for some Wall St big shot's next Maserati. I'd rather save enough to live a comfortable life without having my money sucked up by the vultures.
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Re: Why are you a boglehead ???

Post by Blues »

The quick and simple answer is because it's proven that it makes sound financial sense. It works.

However, it was neither as quick nor simple to get the real world education and experience to "know" that it works.
Last edited by Blues on Sun Apr 21, 2013 8:30 am, edited 1 time in total.
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Re: Why are you a boglehead ???

Post by Johm221122 »

I'm a boglehead because I meesed up when I was young.Raised by my grandparents who were definitely upper middle class, I got in trouble and did not get education.I now make what would be considered an average salary, but low by boglehead standards. The problem is I work with my back and I don't want to or can't do it forever, so I save hard and basically follow boglehead philosophy
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Re: Why are you a boglehead ???

Post by stoptothink »

It's interesting how experiences have different affects on people. I grew up extremely poor. My mother raised 5 kids on her own on a medical assistant's salary. I can't say we ever went hungry, thanks to the church, but we certainly did without. I'll never forgot one particular experience when I was about 12. It was December, we were going to be evicted at the end of the month and probably going have to move in again with my grandfather. Woke up Christmas morning and on our doorstep was a copy of Pay it Forward with an envelope used as a bookmark. I gave it to my mom, she opened it up and there was a highlighted paragraph and inside the envelope was a stack of $100s, I think about $1500. We didn't get evicted. I've used that experience as motivation to help other people on Christmas. I do secret Santa every year, always leaving a copy of Pay it Forward with an envelope along with some food and gifts for the kids.

I am frugal to a fault, something I am trying to get over. I don't spend a penny that isn't a necessity and I can recount every dollar I have spent the past few months off the top of my head. It has helped me get through school debt free (and helped my ex- wife graduate dental school debt free) and at 32 have the freedom to do pretty much whatever I could possibly want even though I am not necessarily a high earner. On the other hand, my older brother makes more than twice what I do and is completely broke. He has told me several times that his family will never experience the deprivation he did growing up. He lives in a ~5000^ft home, has 5 cars between him and his wife, and my nieces are the most spoiled children I have ever met; he also has to so regularly ask me, my mother, and one of my other brothers for financial help that money tensions ruin ever holiday. Christmas wasn't so jolly this year when he asked for help because his 4-wheelers were about to get repossessed, and got 3 no's. We then mutually decided that that would be the last Christmas we spend together for the time being.

My background shaped my money habits, but it shaped my brother's in the opposite way.
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Re: Why are you a boglehead ???

Post by cheese_breath »

To share what I know with others and to keep learning from those who know more than me. Sometimes when sharing what I think I know, I am corrected by others who know more. This can be embarrassing, but these lessons are probably the best remembered.
The surest way to know the future is when it becomes the past.
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Re: Why are you a boglehead ???

Post by LadyGeek »

OP: May I recommend you restructure the poll? "Were you poor growing up ?" should be answered as Yes or No. Your poll is soliciting answers to a different question: "How poor were you growing up?"

You are looking for answers to the question "Did you become a Boglehead due to the way you were brought up? For example:

- No, it just makes sense to do it this way
- No, I had a bad experience and became a Boglehead as a result
- Yes, I was poor growing up. The Bogleheads approach matches my lifestyle.
- Yes, I was not poor growing up. The Bogleheads approach matches my lifestyle.
- Other (please explain)

You can change the poll by editing Post #1, then select the Poll Creation tab and edit the responses. You may need to delete the poll first (check the box), submit, then enter the updates.

This thread is now in the Investing - Theory, News & General forum (general question).
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Re: Why are you a boglehead ???

Post by wander »

I became a boglehead not because of which family I come from but because I care about my future financially.
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hand
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Re: Why are you a boglehead ???

Post by hand »

Interesting question, though I would question the focus on absolute wealth and suggest a focus on relative wealth instead (i.e. how wealthy were you compared to your peers / your community).

I believe there is a decent amount research showing that happiness / security is defined on relative terms, and would expect that a sense of poorness is similar.

Also worth noting, the categories you chose are very first-world centric. Never going hungry is a sign of affluence in many parts of the world.
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Re: Why are you a boglehead ???

Post by Mitchell777 »

I was always a saver even as a kid, but got interested in investing in my 20's. Read Money Magazine and looked for the successful funds. The ones with 5 to 10 year success records and the same management. Recall investing in Linder and Heartland funds many years ago, both very successful equity funds with stable mangement. They went south. So, I came to look at low cost index funds. Although a Boglehead, I admit I am not 100% and do a coulpe things Bogleheads would not agree with. One being occasionally buying individual stocks. Most always stocks headquartered in my area. It has been a bit of a hobby. Always with money I can afford to lose. I got lucky on one that will allow me to retire a few years earlier than otherwise, but I always keep in mind the potential losses and keep 95% of my portfolio in Boglehead type investments
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Re: Why are you a boglehead ???

Post by nisiprius »

Oh, well, if we're going to critique the poll... Nobody, but nobody is going to say "I grew up filthy rich - (Eg. mansion with 10 butlers, private jet, 1M birthday parties etc. )" Not only is "filthy" derogatory, but for, I don't know, a century or so, even the word "rich" has been. Nobody calls their own house a "mansion." I don't believe that even a well-staffed substantial residence would have ten "butlers," although I'm not too clear on job designations within the private domestic service sector.

And it doesn't speak to what I think the poster is getting at: did you feel financially secure during your formative years? Because, without getting too preachy about it, I suspect that the correlation between net worth and feelings of financial security is amazingly low. "Folks with plenty a plenty/Got a lock on the door/They're 'fraid somebody's a-goin' to rob 'em/While they're out a-makin' more." (If you can't trust song lyrics, what can you trust?).

Right after the collapse of Legg Mason Value Trust, Bill Miller was probably worrying whether he could afford to keep paying the staff to operate superyacht Utopia DV.

Furthermore, if the parents are doing their job--see "Mama's Bank Account" by Kathryn Forbes--the kids may feel secure even if the parents do not.

[added]
Well, "domestic staff" does seem like the accurate generic term, and:

http://www.thewellingtonagency.com/dome ... es2/butler
The Butler, also referred to as Estate Manager, or Household Manager, is responsible for the day-to-day operation of his/her employer's residence(s). Duties entail hiring, training, and termination of the staff members, interviewing and supervising all outside contractors, managing of household accounts, orchestrating functions, stocking and care of the wine cellar, scheduling preventative maintenance for the home and autos, and in general , making sure that the employers life is as carefree as possible. The Estate Manager wears many hats, and is a stickler for detail.

Employing a Butler or Estate Manager is not only a statement of status, but the perfect way to keep your household in order and simplify your life at home.
So it appears as if you would only have one Butler. Even, I take it, if you had "residence(s)," plural. Butlers: they're not just for wine cellars any more.

:oops: I just figured it out--do you think a "butler" means a bottler, i.e. someone who's in charge of the bottles? Click, click--YES!
Last edited by nisiprius on Sun Apr 21, 2013 10:31 am, edited 10 times in total.
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Re: Why are you a boglehead ???

Post by otbricki »

I'm a Boglehead because I haven't been able to find a better alternative.
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Re: Why are you a boglehead ???

Post by YDNAL »

rex wrote:Why are you a boglehead ???

I was recently talking to a gentleman who does consulting work in organizational behavior and he mentioned that often our experiences while growing up shapes our perspectives - which i believe is true. Just curious to see if any of us became bogleheads to get a security blanket that they never had while growing up.

-Rex
None of the poll options relate to the Boglehead philosophy that appeals to them.
Link: http://www.bogleheads.org/wiki/Boglehea ... philosophy
1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep Costs Low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course
Last edited by YDNAL on Sun Apr 21, 2013 10:34 am, edited 1 time in total.
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John3754
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Re: Why are you a boglehead ???

Post by John3754 »

The results of your poll will be meaningless, correlation does not imply causation.

I'm a BH because I want to invest in my future, not gamble with my hard earned money.
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Re: Why are you a boglehead ???

Post by stemikger »

I'm a Boglehead because I grew up poor and always craved that security. My parents always fought over money and never had a plan. They robbed Peter to pay Paul and when my dad passed away at 52 my Mom lost the house and was homeless.

I swore if I could help it I would never be in that situation. Unfortunately, I still struggle with my relationship with money when it comes to security. I think that is one of the reasons why I wanted my house paid off so bad which I did this year.

As far as the investing side of being a Boglehead, after reading books by John Bogle, it makes so much sense compared to everything else out there. Common Sense on Mutual Funds is a book I constantly go to for encouragement and knowledge. It is still as relevant today as it was one it was first written.

Also, people like Taylor Larimore make me realize I’m on the right track.
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Re: Why are you a boglehead ???

Post by frugalhen »

came from an upper middle class background, watched my parents earn a lot then lose it all through poor planning. It created an enormous amount of stress in our homelife. watching seniors struggle to pay their bills is not what I ever want for me or my kids.
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Re: Why are you a boglehead ???

Post by G-Money »

nisiprius wrote:So it appears as if you would only have one Butler. Even, I take it, if you had "residence(s)," plural.
Which anyone who has watched Downton Abbey would know already. :D
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Re: Why are you a boglehead ???

Post by teacher »

I didn't know anyone who invested growing up, in my middle-class family or otherwise. My college roommate talked about the stock market, and I thought her family must be rich. My parents "invested" in insurance products and when the opportunity to invest in an annuity was presented to teachers at my school, I bought into a fixed annuity. It was an AM radio program commentator, Bob Brinker, who introduced the notion of a 'critical mass' and index mutual funds, particularly Vanguard funds, that made me realize I could participate in indexing and create significant wealth. But it was this site that taught me how to diversify the critical mass with a sound, simple asset allocation which could be harvested safely in retirement. I don't think my middle-class status had as much to do with the outcome as serendipity. I was exposed to information that got me thinking, and this board made available all the information and help from participants that got me on the right track to create results I never dreamed possible back in the days when my roommate talked about buying stocks.
trademil
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Re: Why are you a boglehead ???

Post by trademil »

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep Costs Low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course
I think family history is very relevant for #2 (Invest early and often) but not so much for the rest of the points. Yes, I save a larger % of my paycheck because my parents never had much money on hand.

I understood numbers 3 to 7 after reading "Fooled by Randomness" by Nassim Nicholas Taleb, although he dosen't say any of them directly (except maybe for #5).

#8 is just common sense, or maybe ideology.

And numbers 1, 9 and 10 I learned on this forum.
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SHL
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Re: Why are you a boglehead ???

Post by SHL »

Working class background here. I've always had a little sense regarding money, but not a lot of investing sense, until I saw a Jack Bogle interview on TV. Mr. Bogle's approach to investing makes the most sense to me, so here I am: Vanguarding & Bogleheading! :mrgreen:
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Re: Why are you a boglehead ???

Post by Grt2bOutdoors »

My folks used to say we were "middle income". Well, the funny thing about that term is it represents a very broad range of income, looking back at it, I can say with certainty we were at the very low end of it. We were not hungry, but we did without many of the things many in my neighborhood had growing up, wore plenty of hand me downs and that included sneakers.
But to answer your question - it's simple, "why pay more"? I only pay more if the quality and service far surpasses that of the other shop. Quality in investing means you are consistently beating the pants off the benchmark with the same or lower levels of risk - I know of no reasonably priced investment that has done that year in and year out. The service is basically the same throughout the industry - no one fund company to the masses is producing a differentiated product that deserves a higher price to be paid. Therefore, I simply keep the difference for myself instead of padding someone elses pockets.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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rex
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Re: Why are you a boglehead ???

Post by rex »

folks, my apologies if you guys found the poll confusing. But nevertheless, thanks to all who shared their valuable experiences. A few clarifications:

--> I was trying to find out if growing up poor taught you to be cautious with money as much as the other way around - if you grew up in a upper middle class/ rich household, your parents probably taught you better money management and you become careful with money. I was just talking to our part time nanny yesterday and she still spends every penny she makes while she lives rent free at her parents house. She's in her twenties and does not have even basic money management concepts. On the other hand, I have colleagues who grew up upper middle class and are still very careful with their money because their parents taught them how to manage their money.

--> on the other hand , I also know colleagues who grew up rich and that makes them spend every cent of their salary to keep up their lifestyle . there are also people who grew up poor and never want to end up in that situation again and as a result is very careful with their money.

--> as for myself, I've seen both sides of the coin -- I grew up in a foreign country in relative wealth and remember being very much a spendthrift. that all changed when my father sent me over to Canada when I was 17 and I was on my own. I worked my way through school and there were weeks when I was living on rice and beans for weeks at a time - that made me very careful with my money as I never want to be in that situation again.

so in the end , after reading through the wealth of experiences here it seems like there are two ways we become frugal - either our parents taught it or we had some hardship experiences which taught us frugality.

-rex
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Garco
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Re: Why are you a boglehead ???

Post by Garco »

The poll categories are strange. There's quite a leap between "working class" and "upper middle class." There's the plain old middle class, without the two cars, a large house, etc. We were in that "missing" category. My father was a product engineer. He worked with his brain more than his hands (though he worked a mean slide rule). HIS father was an auto mechanic and their kids (my dad and his sibs) were thus brought up "working class", but my dad and two of his brothers were into science and technology and went to college and in a couple of cases also earned advanced degrees. Education was very high in their family's priorities.

My 4 sibs and I were brought up to appreciate hard work, if not physical work (though we did some of that). My dad worked constantly on one engineering problem or another. My Mom only completed high school but was salutatorian, very smart, and managed all the money in the family. She kept meticulous records and files, which was a great help when it came time to settle their estate matters. We kids weren't given particular lessons in managing money. But we knew our parents grew up during the depression, and some of the stories that my Dad told were something else.

We never had any luxuries, but we never lacked for anything we needed -- and all 5 of us completed college, at our parents' expense. It was their legacy to us, as my father told me when I headed to college: "We can't promise you an inheritance but we can provide you with a good college education." That is the message that we gave to our own kids.
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Re: Why are you a boglehead ???

Post by bayview »

I'm a boglehead because a long time ago, I read a personal finance book and learned about indexing. (I'm pretty sure it was Jane Bryant' Quinn's Everyone's Money Book, although I wouldn't swear to it.) I tilt toward simplicity in important things, and it made sense to me.

Also, I have no interest in sharing what I manage to save with non-fiduciary "advisors", even if they could match indexing over the long run. It's my money. They can go shake down someone else.

I didn't participate in the poll for a similar reason as above --we were plain old middle middle class, doing OK, nothing spectacular, living on a military salary. My parents were thrifty, but they never ever talked about money or finances, so I figured it out myself. No drama, I'm afraid.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
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mike143
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Re: Why are you a boglehead ???

Post by mike143 »

Because Fatwallet Finance (FWF) ran out of helpful discussions. FWF never motivated me to max out my 401k, start a Roth IRA or anything else that would make a great influence on my financial future.
Nothing is free, someone pays...You can't spend your way to financial freedom.
YoungBoglehead
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Re: Why are you a boglehead ???

Post by YoungBoglehead »

Interesting thread.

I'm a bogglehead... or as much of one as I can be with the little knowledge I have, and I'm positive it's because I grew up somewhere between dirt poor and poor. Saw more eviction notices than birthdays growing up.
Started investing around 21, joined Bogleheads at 23.
Jeff7
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Re: Why are you a boglehead ???

Post by Jeff7 »

Working class parents. Firmly middle-class, I'd say.

Why a "Boglehead?" I knew about the benefits of compound interest and the value of real investing, but all I knew of was the stock market, and picking and choosing individual stocks. It all just seemed really "gambley" to me though. I knew that there were day-traders and large companies out there that had access to information long before I did, and I also knew that I didn't have a clue what to look for in a company. So I unfortunately was effectively out of the investing realm until my late 20s, with my money in bank accounts which paid less and less interest, up to the point that some reversed it, and wanted to charge money instead.
Bonds: I knew that savings bonds existed, but that was about it. Then with the banking crisis, I learned of "junk bonds" and the whole other bond arena, which then, at the time, also seemed really risky.
My first foray into mutual funds came at a bad time as well, when my grandmother gifted me some money in an Alger Fund. (Which I came to find, years later, was charging an ER of >2%, plus sales loads.) This was done right around when the NASDAQ was right around its >5000 peak. So, not too long after that, the dot-com bubble fully imploded, and the gift, which was very heavily invested in tech and NASDAQ stocks, shed well over half of its value. (Kudos to that well-paid management team. They sure never saw that one coming.) Thus my first view of a mutual fund was of watching it disintegrate in a matter of months.
All of this came together to leave me with the conclusion that the investment market was either a giant scam, or else that I didn't have what it took to do it and come out ahead.

Indexing was mentioned here and there on another forum, as was this site, so I finally looked into it. Riding the waves of the whole market, cheaply, looked quite appealing. The main argument I saw was simply, "There's a very high chance that the best you can possibly do, long-term, is to match the market average, so you might as well do it cheaply." So here I am now, maxing out a Roth IRA of Vanguard index funds for 2012 and on track to do the same for 2013, and working toward maxing out my available 401k space next year, and hopefully every year beyond that. (Cheap index fund options are only available in the IRA, but none in the 401k.)

Seeing it as a "Security Blanket:" Possibly? I'm not intending to touch any of this money for 30-40 years, and if anything, it's actually nibbled away slightly at my disposable income right now due to the amounts I'm pushing into investments. So if it is a blanket, it's one that's displaced in time.
My "right now" security blanket is in my bank account and savings bonds, the more liquid assets serving as spending money and an emergency fund. I am admittedly acclimated to having savings though, ever since I started a savings account with $79.00, probably back in late elementary school. I would not relish the idea of ever living paycheck-to-paycheck. When I'm working with programming or circuitry, just as with my finances, I like having buffers available whenever I reasonably can.
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Re: Why are you a boglehead ???

Post by Toons »

I "t :happy hought" like a Boglehead before I found the Bogleheads site.Glad I found it
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
oragne lovre
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Re: Why are you a boglehead ???

Post by oragne lovre »

I've espoused boglehead way because:

1. I acknowledge that I'm not smarter than the market
2. I don't believe I'll be happier by grinding for more money which I then spend lavishly; I'll become a slave to money instead of making money be my slave
3. I believe if I enjoy doing well what I know how to do best, then money will come in as byproduct which will passively spawn more money as its own byproduct

I don't answer the poll since I don't feel a strong correlation between upbringing background and boglehead investing style.
The finest, albeit the most difficult, of all human achievements is being reasonable.
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Re: Why are you a boglehead ???

Post by chaz »

I like being a Boglehead. It beats the alternatives.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
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Re: Why are you a boglehead ???

Post by Fallible »

rex wrote:I was recently talking to a gentleman who does consulting work in organizational behavior and he mentioned that often our experiences while growing up shapes our perspectives - which i believe is true. Just curious to see if any of us became bogleheads to get a security blanket that they never had while growing up.

-Rex
I’d feel better if we were all working from an agreed-upon definition of Boglehead, but I’ll say being a Boglehead is a combnation of nature and nurture. I can’t adequately explain the nature, but the nurture for me was hard-working middle class. I no doubt inherited and absorbed the family frugality, although I was more frugal than they were in some respects and less so in others, owing I think just to our individual differences (nature).
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Random Musings
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Re: Why are you a boglehead ???

Post by Random Musings »

Because I have short arms and deep pockets when It comes to dealing with financial institutions.

That, and I shorted yacht builders.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
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Padlin
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Re: Why are you a boglehead ???

Post by Padlin »

I have my doubts about how I grew up having anything to do with me becoming a Boglehead. As far as I know I became one after performance chasing through the 90's to mixed results. I was searching for a "better way" when I came across a review of Common Sense on Mutual Funds in Barrons. Remember the days of stock quotes on TV going all day in restaurants and bars instead of ball games? The book fitted my need and I've been a Boglehead since.

FWIW, I grew up middle/lower class. We made due but had nothing extra, hand me down everything, bikes, cars, clothes, etc. Got married while in the service starting at financial ground zero. A smart brother told me to go into computers, which Uncle Sam agreed to do.
Regards | Bob
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Re: Why are you a boglehead ???

Post by exoilman »

I had boglehead traits prior to coming to this site. I come here to have those financial traits reinforced all the time. Now I enjoy the wisdom of the posters other than financial advice. My thinking in many areas has been influenced by some of the contributors here. I would't hesitate to PM them if I needed more clarity on any subject matter.

regards
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Re: Why are you a boglehead ???

Post by investingdad »

I would say that I was practicing what Bogleheads preaches long before discovering there was such a thing as a 'boglehead'.

My dad was an engineer and also had a small consulting business on the side. My mom did not work outside the home. I have no siblings. We lived in a small town in a ranch style home. My dad always complained about money being tight, but as I come up on age 40 and look back...it's clear it wasn't quite as tight as he had me believe. But regardless, it a very middle of the middle class upbringing.

My dad's older brother and his family lived out of state and I rarly saw them growing up. He was also an engineer and worked for IBM and their family was at least as comfortable as my parents, probably a little more so.

My mom's side of the family was all close by and we saw them frequently. Totally different story. All were working class, just getting by, and always gave me the impression to be drifting in life...not really having a plan and very much at the whims of whatever foreman was responsible for telling them exactly what they were supposed to be doing every day. I think what made the biggest impression on me was that everyone on my mom's side of the family seemed perfectly fine with their lack of direction and lack of desire to attain a greater level of success.

I knew I was a smart kid from the time I was in 2nd or 3rd grade. College was always part of my future plans and I had a general idea of what means I had to attain a reasonable level of professional and finanical success. I figured out around age 22 or so that I was never going to earn a huge salary, but I'd earn enough that if I managed what I made, I could / should be able to be fairly comfortable later on.

I guess I always had the ability and penchant for long term planning and my satisfaction and happiness was derived from developing and then following a plan.

As my salary and my wife's salary increased, we found ourselved earning more than I would have expected when I was still in my 20s. But our desire to spend didn't increase at the same rate.
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Re: Why are you a boglehead ???

Post by Ed 2 »

I could not find any other poll options, therefore I vote for: "I came to this God blessed Country of USA, Country of the opportunity's without anything and have now everything."
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
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Skinut
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Re: Why are you a boglehead ???

Post by Skinut »

Working Class Family (although sometimes lived like upper middle class :shock: )

I had an older sibling who was terrible with money growing up, I always heard my parents talk about it, which made me want to save more (competition I guess). Although I was a saver compared to them, I still spent more than I should have in my early years, gambled in the stock market, leased a car :oops: , spent too much on hobbies, etc.

Then, I stumbled on an article written by Rick Ferri, which mentioned Bogleheads (what's a Boglehead???), found the site, spent a little too much time absorbed in all the great posts in the forum and Wiki, and now am trying to help others see the light.

Why am I a Boglehead? Because it actually makes sense to me. I always thought I needed to find a good "finance guy" to manage my money and that was the only way I could get ahead. After discovering Bogleheads (thank God, seriously), all of the studies that have been done, the performance of indexing vs. active, expenses, etc. all adds up to me. I know how it works, I understand, I have a plan, and now I don't have to worry about it. That's why I'm a Boglehead.

Thank You, to Taylor, Mel, and Alex (and others I might have missed) for creating this site and spreading the word, you've saved me tens of thousands of dollars (now and in the future), I'll never be able to pay you back, but perhaps can pay it forward to others :beer
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