The Boglehead Philosophy

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Taylor Larimore
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The Boglehead Philosophy

Post by Taylor Larimore » Tue Jan 01, 2013 2:18 pm

Bogleheads:

The beginning of a new year is a good time to remind ourselves of the Boglehead Philosophy for investment success which is based on the wisdom of our great mentor, Jack Bogle:

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

Our wiki provides details:

http://www.bogleheads.org/wiki/Boglehea ... philosophy

Happy New Year!
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Noobvestor
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Re: The Boglehead Philosophy

Post by Noobvestor » Tue Jan 01, 2013 2:19 pm

Happy New Year to you too, Taylor!
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

ProfessorX
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Re: The Boglehead Philosophy

Post by ProfessorX » Tue Jan 01, 2013 2:20 pm

Happy New Year !!!

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Devil's Advocate
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Re: The Boglehead Philosophy

Post by Devil's Advocate » Tue Jan 01, 2013 2:23 pm

Amen Mr. Larimore!

DA

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gotherelate
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Re: The Boglehead Philosophy

Post by gotherelate » Tue Jan 01, 2013 2:23 pm

Taylor, thanks for the reminder and have a wonderful new year!
-Grandpa | I'd rather see where I'm going than see where I've been.

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Sbashore
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Re: The Boglehead Philosophy

Post by Sbashore » Tue Jan 01, 2013 2:24 pm

Happy New Year Taylor. Thanks for all the good advice in the year past.
Steve | Semper Fi

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nedsaid
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Re: The Boglehead Philosophy

Post by nedsaid » Tue Jan 01, 2013 2:29 pm

This should be taught in personal finance classes in every high school and college in the United States. Excellent advice.
A fool and his money are good for business.

froggy
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Re: The Boglehead Philosophy

Post by froggy » Tue Jan 01, 2013 5:14 pm

nedsaid wrote:This should be taught in personal finance classes in every high school and college in the United States. Excellent advice.
I agree with nedsaid.

Happy New Year, everyone

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Index Fan
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Re: The Boglehead Philosophy

Post by Index Fan » Tue Jan 01, 2013 5:43 pm

That's a great philosophy. Happy New Year all!
"Optimum est pati quod emendare non possis." | -Seneca

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Re: The Boglehead Philosophy

Post by sschullo » Tue Jan 01, 2013 5:51 pm

HNY!!
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Rick Ferri
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Re: The Boglehead Philosophy

Post by Rick Ferri » Tue Jan 01, 2013 6:01 pm

My suggestion at the Boglehead Reunion was to change #6 - Use index funds when possible to the more pragmatic - Use Index funds when available and most practical. Although I am a die-hard believer in index fund investor, I don't recommend using them to represent an asset class just because it's "possible" to do so. Fund selection is deeper than that. For example, the municipal bond index funds on the market are higher cost and far less diversified than Vanguard municipal bond funds. I do not recommend index funds for municipals or high yield corporate bonds.

At the same meeting, Allan Roth recommend that #8 - Minimize Taxes be change to something more practical. I believe he recommended Be tax efficient. I agree with Allan on his suggestion. We don't want to minimize taxes because that can be done by paying exorbitant fees, investing in questionable tax gimmicks, and by investing poorly. Being tax efficient is better wording.

Both of these suggestions were tabled.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.

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Mel Lindauer
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Re: The Boglehead Philosophy

Post by Mel Lindauer » Tue Jan 01, 2013 6:32 pm

Rick Ferri wrote:My suggestion at the Boglehead Reunion was to change #6 - Use index funds when possible to the more pragmatic - Use Index funds when available and most practical. Although I am a die-hard believer in index fund investor, I don't recommend using them to represent an asset class just because it's "possible" to do so. Fund selection is deeper than that. For example, the municipal bond index funds on the market are higher cost and far less diversified than Vanguard municipal bond funds. I do not recommend index funds for municipals or high yield corporate bonds.

At the same meeting, Allan Roth recommend that #8 - Minimize Taxes be change to something more practical. I believe he recommended Be tax efficient. I agree with Allan on his suggestion. We don't want to minimize taxes because that can be done by paying exorbitant fees, investing in questionable tax gimmicks, and by investing poorly. Being tax efficient is better wording.

Both of these suggestions were tabled.

Rick Ferri
And, at BH 11, when asked how we would change or add to the list, in addition to those pointed out by Rick, I stated that #1 on the list should be "Live Below Your Means". If you don't do that, all the rest of the principles are useless, since you won't have any money to invest.
Best Regards - Mel | | Semper Fi

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tetractys
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Re: The Boglehead Philosophy

Post by tetractys » Tue Jan 01, 2013 6:44 pm

I agree to the above two posts, because both of them seem to make common sense. Not sure if the constitution needs to be re-written to incorporate them though, for the same reason. -- Tet

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Re: The Boglehead Philosophy

Post by Fallible » Tue Jan 01, 2013 6:55 pm

Mel Lindauer wrote:
Rick Ferri wrote:My suggestion at the Boglehead Reunion was to change #6 - Use index funds when possible to the more pragmatic - Use Index funds when available and most practical. Although I am a die-hard believer in index fund investor, I don't recommend using them to represent an asset class just because it's "possible" to do so. Fund selection is deeper than that. For example, the municipal bond index funds on the market are higher cost and far less diversified than Vanguard municipal bond funds. I do not recommend index funds for municipals or high yield corporate bonds.

At the same meeting, Allan Roth recommend that #8 - Minimize Taxes be change to something more practical. I believe he recommended Be tax efficient. I agree with Allan on his suggestion. We don't want to minimize taxes because that can be done by paying exorbitant fees, investing in questionable tax gimmicks, and by investing poorly. Being tax efficient is better wording.

Both of these suggestions were tabled.

Rick Ferri

And, at BH 11, when asked how we would change or add to the list, in addition to those pointed out by Rick, I stated that #1 on the list should be "Live Below Your Means". If you don't do that, all the rest of the principles are useless, since you won't have any money to invest.
I agree with all of the above, especially LBYM, which is the source of our all-important savings.

Thanks, Taylor, and Happy New Year!
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

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6miths
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Re: The Boglehead Philosophy

Post by 6miths » Tue Jan 01, 2013 7:19 pm

Always nice to see the philosophy boiled down to its essentials. Happy New Year to all. Cheers.
'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so!' Mark Twain

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Re: The Boglehead Philosophy

Post by Norris » Tue Jan 01, 2013 7:47 pm

I agree with Rick, Allan and Mel. All three are good points and better clarify the principles.
Good work gentlemen.

I hope everyone has a prosperous, healthy and happy new year!

Norris
Life is really simple, but we insist on making it complicated. Confucius

J295
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Re: The Boglehead Philosophy

Post by J295 » Tue Jan 01, 2013 8:21 pm

Taylor -- Appreciate your reminder and the great assistance you and many other regular posters provide. My wife and I had an opportunity to spread some of these messages to a college financial planning class yesterday, and had an enjoyable time doing so. Happy new year to all!

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TxAg
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Re: The Boglehead Philosophy

Post by TxAg » Tue Jan 01, 2013 9:50 pm

Great reminder

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Peter Foley
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Re: The Boglehead Philosophy

Post by Peter Foley » Tue Jan 01, 2013 10:44 pm

Taylor
We have a reasonably active BH group here in Minnesota. (Credit Jeff Mc for that.) We meet four times per year and have tried to build the philosophy statements into the agenda/presentations so as to let newcomers know what we are all about. We also try to provide some detail regarding the statements through real life experiences.
They have served our group well. Thanks.

Happy New Year

Tom Romens (aka Peter Foley)

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Re: The Boglehead Philosophy

Post by NAVigator » Tue Jan 01, 2013 11:22 pm

I have this in a worksheet next to my IPS which is in the same spreadsheet where I have my asset allocation and net worth summary. It all fits together.

Jerry
"I was born with nothing and I have most of it left."

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Leif
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Re: The Boglehead Philosophy

Post by Leif » Tue Jan 01, 2013 11:54 pm

Rick Ferri wrote:
At the same meeting, Allan Roth recommend that #8 - Minimize Taxes be change to something more practical. I believe he recommended Be tax efficient. I agree with Allan on his suggestion. We don't want to minimize taxes because that can be done by paying exorbitant fees, investing in questionable tax gimmicks, and by investing poorly. Being tax efficient is better wording.

Rick Ferri
Better IMO is strive for the best after tax return. Depending on a person's tax bracket it may be better to go with a taxable investment with higher yield then a tax advantaged investment with a lower yield

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