Jack Bogle's investments

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stemikger
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Jack Bogle's investments

Post by stemikger » Thu Jul 18, 2013 7:10 pm

It's always good to peel back the curtains and see how Jack invests his own money.

I'm sure this has been posted before, but in case some missed it. Here it is.

http://www.reuters.com/article/2012/09/ ... LI20120911
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Re: Jack Bogle's investments

Post by InvestorNewb » Thu Jul 18, 2013 7:23 pm

Do you think it's true that his net worth is in the low eight figures?

This seems low for the founder of a company that manages $2.0 trillion, not to mention someone who has been investing passively for a very long time.
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Re: Jack Bogle's investments

Post by JDaniels » Thu Jul 18, 2013 7:29 pm

InvestorNewb wrote:
This seems low for the founder of a company that manages $2.0 trillion, not to mention someone who has been investing passively for a very long time.
It tells me Mr. Bogle has "Enough". :wink:
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Re: Jack Bogle's investments

Post by nisiprius » Thu Jul 18, 2013 7:37 pm

InvestorNewb wrote:Do you think it's true that his net worth is in the low eight figures?

This seems low for the founder of a company that manages $2.0 trillion, not to mention someone who has been investing passively for a very long time.
Yes, I think it's true, for these reasons.

1) He says so.

2) I have no idea where they get their numbers or how trustworthy they are, but Celebrity Net Worth says $80 million, which would of course be the high eight figures... but anyway, eight figures. That source notes that "This amount is in stark contrast to his hedge fund peers who regularly earn hundreds of millions of dollars in a single year and have accumulated multi-billion net worths."

3) He isn't in the Forbes 400. It appears as if it takes about $1.1 billion currently to get onto that list. That list includes: Mario Gabelli ($1.1 billion), Ken Fisher ($1.8), Charles Schwab ($3.7 billion), and Fidelity's Edward Johnson III ($6.5 billion).

As for your comment "This seems low for the founder of a company that manages $2.0 trillion," my reply is "Yup!"

Some of us find that admirable. Or dare I say "admiral?"
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Re: Jack Bogle's investments

Post by RNJ » Thu Jul 18, 2013 7:48 pm

Interesting comment on 529 plans:

Q: Do you set a little aside for those grandkids in 529 college-savings plans? (Vanguard has about $40 billion in assets in 27 state 529 plans.)

A: I don't really like the idea of tying up your money in 529 plans, because of all the restrictions on withdrawals. I'm not against them, I just like having more flexibility than being required to use those funds specifically for educational purposes.


I wonder if this thinking applies only to his own situation or to the structure and purpose of 529s in general.

Thoughts?

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Re: Jack Bogle's investments

Post by RNJ » Thu Jul 18, 2013 7:51 pm

nisiprius wrote:
InvestorNewb wrote:Do you think it's true that his net worth is in the low eight figures?

This seems low for the founder of a company that manages $2.0 trillion, not to mention someone who has been investing passively for a very long time.
Yes, I think it's true, for these reasons.

1) He says so.

2) I have no idea where they get their numbers or how trustworthy they are, but Celebrity Net Worth says $80 million, which would of course be the high eight figures... but anyway, eight figures. That source notes that "This amount is in stark contrast to his hedge fund peers who regularly earn hundreds of millions of dollars in a single year and have accumulated multi-billion net worths."

3) He isn't in the Forbes 400. It appears as if it takes about $1.1 billion currently to get onto that list. That list includes: Mario Gabelli ($1.1 billion), Ken Fisher ($1.8), Charles Schwab ($3.7 billion), and Fidelity's Edward Johnson III ($6.5 billion).

As for your comment "This seems low for the founder of a company that manages $2.0 trillion," my reply is "Yup!"

Some of us find that admirable. Or dare I say "admiral?"

4) It sounds as though he makes very substantial charitable donations ("give until it hurts").

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Re: Jack Bogle's investments

Post by Mel Lindauer » Thu Jul 18, 2013 7:58 pm

RNJ wrote:
nisiprius wrote:
InvestorNewb wrote:Do you think it's true that his net worth is in the low eight figures?

This seems low for the founder of a company that manages $2.0 trillion, not to mention someone who has been investing passively for a very long time.
Yes, I think it's true, for these reasons.

1) He says so.

2) I have no idea where they get their numbers or how trustworthy they are, but Celebrity Net Worth says $80 million, which would of course be the high eight figures... but anyway, eight figures. That source notes that "This amount is in stark contrast to his hedge fund peers who regularly earn hundreds of millions of dollars in a single year and have accumulated multi-billion net worths."

3) He isn't in the Forbes 400. It appears as if it takes about $1.1 billion currently to get onto that list. That list includes: Mario Gabelli ($1.1 billion), Ken Fisher ($1.8), Charles Schwab ($3.7 billion), and Fidelity's Edward Johnson III ($6.5 billion).

As for your comment "This seems low for the founder of a company that manages $2.0 trillion," my reply is "Yup!"

Some of us find that admirable. Or dare I say "admiral?"

4) It sounds as though he makes very substantial charitable donations ("give until it hurts").
Yes, I think Jack gives more than 50% of his income to charity.
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Re: Jack Bogle's investments

Post by bengal22 » Thu Jul 18, 2013 8:06 pm

Great article. But sometimes I wonder since our economy seems to be consumer driven what would happen if everyone saved like we do. Hmmmm
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Re: Jack Bogle's investments

Post by nedsaid » Thu Jul 18, 2013 8:08 pm

Although Mr. Bogle is a wealthy man, he certainly took a lot less out for himself than what he could have. That is refreshing.

It seems that we have to make our CEO's not millionaires, not worth in the tens of millions, but now they expect to be enriched to the tune of hundreds of millions. I am a huge believer in free enterprise and capitalism but this seems over the top. Way over the top.

I also admire that Mr. Bogle is very generous with his money and endeavors to make the world better for us.

As far as his investments, it is good to see someone eat their own cooking. I just loved to hear various stock market experts on Nightly Business Report make recommendations only to find out that they were not invested in what they were telling others to buy. When I hear this, I just roll my eyes. I know in some cases, people are prohibited to do this for compliance reasons. I am a believer that people need to eat their own cooking.

Mr. Bogle is mostly invested in Index Funds, just as he has recommended to others.
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Re: Jack Bogle's investments

Post by Index Fan » Thu Jul 18, 2013 8:24 pm

I have to chuckle when people think Mr. Bogle should have more $, or that he has 'enough', while others 'clearly have excessive amounts'. Apparently it's alright for Mr. Buffett to have a kazillion bucks and there's no moral dilemmas or rationalizations about that, though he still lives in his modest house so I guess he's 'keeping it real'.

Maybe I just don't keep score. But the underlying feelings that there must be an explanation or rationalization for wealth levels for the wealthy just seems strange. Sure, many are making lots of money selling high-cost products I wouldn't touch, but plenty of people voluntarily buy their products for whatever reason. The hair shirts come out on this issue as if some do not want to be associated with the 1%, even when they are working on amassing millions themselves. No explanation needed, folks! Do good with that money, or blow it, it's yours, presumably earned by legal methods.
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Re: Jack Bogle's investments

Post by rixer » Fri Jul 19, 2013 7:43 am

I am wondering about Bogels large holdings in corporate bond funds. The one he mentioned has a pretty long duration. Almost 7 years I think. Maybe for somebody who has so much they can just ride it out and collect income. I'm not sure if it would be right for me though.

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Re: Jack Bogle's investments

Post by Grt2bOutdoors » Fri Jul 19, 2013 8:02 am

It's important to recognize that Jack has less in net worth than other widely recognized investment professionals for one simple reason: Each one of Jack's investors has much more money :moneybag in their pockets than you would have had you used other investment firms. Compounding does work. :D

So here is to Jack on one very hot and steamy day in New York City. :sharebeer
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Re: Jack Bogle's investments

Post by IlliniDave » Fri Jul 19, 2013 10:07 am

rixer wrote:I am wondering about Bogels large holdings in corporate bond funds. The one he mentioned has a pretty long duration. Almost 7 years I think. Maybe for somebody who has so much they can just ride it out and collect income. I'm not sure if it would be right for me though.
Well, he's 83 years old and "hates" spending money on himself; and not knowing otherwise I'll assume his wife is of a similar age and they apparently have a few 10s of millions in invested assets. So it wouldn't be unreasonable to assume they are managing their money with at least an eye towards their heirs and beneficiaries. Based on his writing, at his age, his portfolio is almost certainly set up with income generation in mind (as you suggested).

I agree with your conclusion. When you have many times over what's required for your own needs/lifestyle, you have a broader palate of investment options that pass the prudence test than those of us that have less or no margin for error.
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Re: Jack Bogle's investments

Post by telemark » Fri Jul 19, 2013 11:07 am

I'm intrigued by the reference to VBINX as a tax efficient fund, since I normally think of balanced funds as not a good choice for taxable accounts. Is this one an exception?

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Re: Jack Bogle's investments

Post by SpringMan » Fri Jul 19, 2013 11:23 am

telemark wrote:I'm intrigued by the reference to VBINX as a tax efficient fund, since I normally think of balanced funds as not a good choice for taxable accounts. Is this one an exception?
He said he was gifting VBINX to his grandkids. Likely his grandkids have a very low tax bracket. It is true that the taxable bonds in VBINX spin off ordinary income but not very much at today's interest rates.
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Re: Jack Bogle's investments

Post by Beagler » Fri Jul 19, 2013 11:36 am

From the article: "My retirement accounts are more like a 50-50 split between stocks and bonds, because of a longer time horizon and because yields on bonds are extremely unattractive right now. The equity side is mostly in Total Stock Market Index (VTSMX), but I still have a little bit in the Wellington Fund (VWELX), which I've been investing in for many decades. I don't ever want to sever that relationship. Bonds in my retirement accounts are about 30 percent Treasuries and 70 percent investment-grade corporates, like the Vanguard Intermediate-Term Corporate Bond Index (VICBX)."

Interesting to see his retirement account bonds breakdown. Also, his attachment to Wellington Fund is understandable.
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Re: Jack Bogle's investments

Post by MindBogler » Fri Jul 19, 2013 12:02 pm

RNJ wrote:I wonder if this thinking applies only to his own situation or to the structure and purpose of 529s in general.

Thoughts?
I don't invest anything in 529s for the same reason Jack stated: too many restrictions on the money. I also dislike the lack of control over the investment strategy.

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Re: Jack Bogle's investments

Post by convert949 » Sat Jul 20, 2013 8:38 am

Think about it... Mr. Bogle has enjoyed a "significant" amount of success, the goal being "enough". He has spent his life sharing his good fortune with charitable organizations, his family and all of us who are the OWNERS of Vanguard :D

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Re: Jack Bogle's investments

Post by Beagler » Sat Jul 20, 2013 9:18 am

convert949 wrote:Think about it... Mr. Bogle has enjoyed a "significant" amount of success, the goal being "enough". He has spent his life sharing his good fortune with charitable organizations, his family and all of us who are the OWNERS of Vanguard :D
Not really. (When was the last time you received a Vanguard voting proxy?)

"Vanguard CEO Bill McNab sticks to the technical, legal definition of The Vanguard Group as a private company: 'When we say we are shareholder owned, it's more metaphorically than technically from a legal standpoint. Because the shareholders actually own shares in the funds and then the funds own us. It's a great way to live.'"  The House that Bogle Built, p. 171.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

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Re: Jack Bogle's investments

Post by Kenneth » Sat Jul 20, 2013 10:23 am

nedsaid wrote:Although Mr. Bogle is a wealthy man, he certainly took a lot less out for himself than what he could have. That is refreshing.

It seems that we have to make our CEO's not millionaires, not worth in the tens of millions, but now they expect to be enriched to the tune of hundreds of millions. I am a huge believer in free enterprise and capitalism but this seems over the top. Way over the top.

I also admire that Mr. Bogle is very generous with his money and endeavors to make the world better for us.

As far as his investments, it is good to see someone eat their own cooking. I just loved to hear various stock market experts on Nightly Business Report make recommendations only to find out that they were not invested in what they were telling others to buy. When I hear this, I just roll my eyes. I know in some cases, people are prohibited to do this for compliance reasons. I am a believer that people need to eat their own cooking.

Mr. Bogle is mostly invested in Index Funds, just as he has recommended to others.
Excellent perspective!
-Ken

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Re: Jack Bogle's investments

Post by boggler » Sat Jul 20, 2013 11:14 am

Beagler wrote:
convert949 wrote:Think about it... Mr. Bogle has enjoyed a "significant" amount of success, the goal being "enough". He has spent his life sharing his good fortune with charitable organizations, his family and all of us who are the OWNERS of Vanguard :D
Not really. (When was the last time you received a Vanguard voting proxy?)

"Vanguard CEO Bill McNab sticks to the technical, legal definition of The Vanguard Group as a private company: 'When we say we are shareholder owned, it's more metaphorically than technically from a legal standpoint. Because the shareholders actually own shares in the funds and then the funds own us. It's a great way to live.'"  The House that Bogle Built, p. 171.
Is this something to worry about?

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Re: Jack Bogle's investments

Post by KyleAAA » Sat Jul 20, 2013 11:29 am

From reading Bogle's book "Enough," I got the strong impression his net worth was in the $50 million range. I don't remember why I thought that. I think I recall him making some very thinly-veiled statements to that effect. But as stated above, he gives a ton to charity. Maybe his net worth has gone down over the last 5 years due to a combination of his charitable donations and the recession.

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Re: Jack Bogle's investments

Post by boggler » Sat Jul 20, 2013 11:32 am

KyleAAA wrote:From reading Bogle's book "Enough," I got the strong impression his net worth was in the $50 million range. I don't remember why I thought that. I think I recall him making some very thinly-veiled statements to that effect. But as stated above, he gives a ton to charity. Maybe his net worth has gone down over the last 5 years due to a combination of his charitable donations and the recession.
Where did his fortune come from?

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Re: Jack Bogle's investments

Post by Beagler » Sat Jul 20, 2013 12:29 pm

boggler wrote:
Beagler wrote:
convert949 wrote:Think about it... Mr. Bogle has enjoyed a "significant" amount of success, the goal being "enough". He has spent his life sharing his good fortune with charitable organizations, his family and all of us who are the OWNERS of Vanguard :D
Not really. (When was the last time you received a Vanguard voting proxy?)

"Vanguard CEO Bill McNab sticks to the technical, legal definition of The Vanguard Group as a private company: 'When we say we are shareholder owned, it's more metaphorically than technically from a legal standpoint. Because the shareholders actually own shares in the funds and then the funds own us. It's a great way to live.'"  The House that Bogle Built, p. 171.
Is this something to worry about?
As VG's CEO points out, there's an important legal distinction between direct shareholder ownership of Vanguard, and ownership of the company by the funds. Issues of transparency on corporate officers' pay, proxy voting on Vanguard Board of Directors membership (just as to name a couple) are substantially different with the existing arrangement than they would be if Vanguard were truly "shareholder owned." As Mr. McNab says, shareholder ownership is more metaphorical than real.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

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Re: Jack Bogle's investments

Post by ruralavalon » Sat Jul 20, 2013 4:33 pm

"Invest as efficiently as you can, using low-cost funds that can be bought and held for a lifetime. Don't go chasing past performance, but buy broad stock index and bond index funds, with your bond percentage roughly equaling your age."

Mr. Bogle seems to follow his own advice. He is "[o]ne hundred percent" in Vanguard funds, personal accounts are 20/80 stocks/bonds, tax-protected accounts "because of a longer time horizon" are 50/50, and the funds held that he mentions in the interview are:

Vanguard Intermediate-Term Tax-Exempt (VWITX);
Total Stock Market Index (VTSMX);
Wellington Fund (VWELX);
Vanguard Balanced Index Fund (VBINX); and
Vanguard Intermediate-Term Corporate Bond Index (VICBX).
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