Being Mr. Bogle's Company has 3 Trillion Dollars

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Topic Author
Kathleen Ryan
Posts: 654
Joined: Mon Feb 19, 2007 8:40 pm
Location: Carmel, CA
Contact:

Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Kathleen Ryan »

Being Mr. Bogle's Company has over 3 Trillion dollars under management, has anyone done the math for what his net monetary worth would have been, had he structured his company the way the other mutual fund companies have been structured?

The reason I ask is that I'm going to attend, "The Money Show," held in SF, in July of this year. (I hope I'm not the only Boglehead that will be in attendance.)

If someone should ask me, "What is a Boglehead?" I want to have a succinct, well thought out answer. This is what I plan to say, which I will quote from the introduction from, "The Bogleheads' Guide to Investing" , written by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf.

"To John C. Bogle, founder of The Vanguard Group, A man whom we knew from afar for many years but have since come to know and cherish as a friend. While some mutual fund founders chose to made billions, he chose to make a difference."

I will of course mention Mr. Bogle's wisdom, character, and kindness, and belief in the power of the individual. I will also tell them he, "Leveled the playing field," for the small investor to give them a, "fair shake." I will back this up with a numeric value as to what he could have been worth, as this seems to be the only motivation for doing things, that so many believe is the only thing of importance or value.

Thank you in advance for, Doing the math for me."
Last edited by Kathleen Ryan on Mon Jun 29, 2015 1:48 pm, edited 1 time in total.
Best wishes, | Kathleen
dad2000
Posts: 697
Joined: Fri Feb 03, 2012 6:04 pm

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by dad2000 »

Perhaps a fair comparison is Fidelity, with almost $2T AUM. The founding Johnson family has a reported net worth of about $40B.

However, it's almost a certainty that Vanguard wouldn't be as large as it is had Bogle structured it more traditionally.
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Mel Lindauer »

Kathleen Ryan wrote:Being Mr. Bogle's Company has over 3 Trillion dollars under management, has anyone done the math for what his net monetary worth would have been, had he structured his company the way the other mutual fund companies have been structured?

The reason I ask is that I'm going to attend, "The Money Show," held in SF, in July of this year. (I hope I'm not the only Boglehead that will be in attendance.)

If someone should ask me, "What is a Boglehead?" I want to have a succinct, well thought out answer. This is what I plan to say, which I will quote from the introduction from, "The Bogleheads' Guide to Investing" , written by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf.

"To John C. Bogle, founder of The Vanguard Group, A man whom we knew from afar for many years but have since come to know and cherish as a friend. While some mutual fund founders chose to made billions, he chose to make a difference."

I will of course mention Mr. Bogle's wisdom, character, and kindness, and belief in the power of the individual. I will also tell them he, "Leveled the playing field," for the small investor to give them a, "fair shake." I will back this up with a numeric value as to what he could have been worth, as this seems to be the only motivation for doing things, that so many believe is the only thing of importance or value.

Thank you in advance for, Doing the math for me."
Hi Kathleen:

It undoubtedly would have been in the 10s of BILLIONS.
Best Regards - Mel | | Semper Fi
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by watchnerd »

Kathleen Ryan wrote: The reason I ask is that I'm going to attend, "The Money Show," held in SF, in July of this year. (I hope I'm not the only Boglehead that will be in attendance.)

I
I live and work in the SF area, but is this show worth going to? I thought they were mostly a bunch of FA's trying to sell their services, or big fund companies trying to rope you in.

In other words, what's at The Money Show for Bogleheads?
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by watchnerd »

Kathleen Ryan wrote:
If someone should ask me, "What is a Boglehead?" I want to have a succinct, well thought out answer. This is what I plan to say, which I will quote from the introduction from, "The Bogleheads' Guide to Investing" , written by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf.

"To John C. Bogle, founder of The Vanguard Group, A man whom we knew from afar for many years but have since come to know and cherish as a friend. While some mutual fund founders chose to made billions, he chose to make a difference."
To be honest, I don't think that really answers the question of 'What is a Boglehead?' as it doesn't tell anyone about Boglehead beliefs, namely

a: that 'costs matter'
b: that most managers can't beat the market
c: that asset allocation accounts for about 90% of portfolio returns.

(It also sounds sort of like a cult of personality...which isn't a definition I would want to be associated with, personally.)
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
Yesterdaysnews
Posts: 964
Joined: Sun Sep 14, 2014 1:25 pm
Location: Sugar Land, TX

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Yesterdaysnews »

Yes he basically passed up being a billionaire to do right by the average investor. Really remarkable person.
Levett
Posts: 4177
Joined: Fri Feb 23, 2007 1:10 pm
Location: upper Midwest

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Levett »

There's nothing "wrong" with Ned Johnson having done things his way and John Bogle having done things his way.

I know many a happy Fidelity investor. I once was one, but settled on TIAA and Vanguard (happy with them, too).

It's a big world.

No one has cornered the market on virtue.

Lev
User avatar
Archie Sinclair
Posts: 413
Joined: Sun Mar 06, 2011 1:03 am

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Archie Sinclair »

Although I have tremendous admiration for Mr. Bogle, I don't think this is completely accurate.

Mr. Bogle didn't have a completely free hand in Vanguard's structure.

Mr. Bogle was fired from Wellington Management Company by his business partners, who controlled a majority on its board of directors. But he persuaded the separate board of directors of the Wellington Mutual Fund that their fund could save money by creating Vanguard to do work that had previously been done by Wellington Management Company.

So Vanguard was never Mr. Bogle's property to give away. Instead, it was the result of a daring boardroom coup. The reason why Vanguard is owned by its investors is that that was Mr. Bogle's sales pitch to the directors of the Wellington Mutual Fund.
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Fallible »

FWIW, I admire John Bogle not for what personal fortune he might have given up, but for knowing what is "enough." And then writing a book about it. :happy
"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
kolea
Posts: 1322
Joined: Fri Jul 11, 2014 5:30 pm
Location: Maui and Columbia River Gorge

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by kolea »

Archie Sinclair wrote:Although I have tremendous admiration for Mr. Bogle, I don't think this is completely accurate.

Mr. Bogle didn't have a completely free hand in Vanguard's structure.

Mr. Bogle was fired from Wellington Management Company by his business partners, who controlled a majority on its board of directors. But he persuaded the separate board of directors of the Wellington Mutual Fund that their fund could save money by creating Vanguard to do work that had previously been done by Wellington Management Company.

So Vanguard was never Mr. Bogle's property to give away. Instead, it was the result of a daring boardroom coup. The reason why Vanguard is owned by its investors is that that was Mr. Bogle's sales pitch to the directors of the Wellington Mutual Fund.
The relationship between Wellington and Vanguard is murky. Wellington let Mr Bogle create a new mutual fund which went on to become Vanguard, but Mr Bogle was still an employee of Wellington and I assume Wellington had (and still has) some stake in Vanguard. After all, he needed their approval to do it and it makes sense that Wellington saw some financial benefit to them to let Bogle create his new index fund. I assume there is still some legal tie between the two. Wellington still provides research services to Vanguard for all their funds. It is not clear at all how Mr Bogle could have reaped a lot of money for himself out of Vanguard if Wellington was only giving him a limited amount of leeway when they let him create Vanguard. No sane company creates a competitor unless it benefits them. There is an interesting story there of how backroom deals are struck in the finance world and who really controls what.
Kolea (pron. ko-lay-uh). Golden plover.
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by abuss368 »

Thank you Jack Bogle!
John C. Bogle: “Simplicity is the master key to financial success."
dewey
Posts: 497
Joined: Fri Feb 24, 2012 10:42 am

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by dewey »

Fallible wrote:FWIW, I admire John Bogle not for what personal fortune he might have given up, but for knowing what is "enough." And then writing a book about it. :happy
+1
“The only freedom that is of enduring importance is freedom of intelligence…” John Dewey
sschullo
Posts: 2840
Joined: Sun Apr 01, 2007 8:25 am
Location: Long Beach, CA
Contact:

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by sschullo »

dewey wrote:
Fallible wrote:FWIW, I admire John Bogle not for what personal fortune he might have given up, but for knowing what is "enough." And then writing a book about it. :happy
+1
+2
Never in the history of market day-traders’ has the obsession with so much massive, sophisticated, & powerful statistical machinery used by the brightest people on earth with such useless results.
new2bogle
Posts: 1779
Joined: Fri Sep 11, 2009 2:05 pm

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by new2bogle »

And the picture of his office in the latest Forbes magazine is great!
User avatar
Archie Sinclair
Posts: 413
Joined: Sun Mar 06, 2011 1:03 am

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by Archie Sinclair »

TwoByFour wrote:
Archie Sinclair wrote:Although I have tremendous admiration for Mr. Bogle, I don't think this is completely accurate.

Mr. Bogle didn't have a completely free hand in Vanguard's structure.

Mr. Bogle was fired from Wellington Management Company by his business partners, who controlled a majority on its board of directors. But he persuaded the separate board of directors of the Wellington Mutual Fund that their fund could save money by creating Vanguard to do work that had previously been done by Wellington Management Company.

So Vanguard was never Mr. Bogle's property to give away. Instead, it was the result of a daring boardroom coup. The reason why Vanguard is owned by its investors is that that was Mr. Bogle's sales pitch to the directors of the Wellington Mutual Fund.
The relationship between Wellington and Vanguard is murky. Wellington let Mr Bogle create a new mutual fund which went on to become Vanguard, but Mr Bogle was still an employee of Wellington and I assume Wellington had (and still has) some stake in Vanguard. After all, he needed their approval to do it and it makes sense that Wellington saw some financial benefit to them to let Bogle create his new index fund. I assume there is still some legal tie between the two. Wellington still provides research services to Vanguard for all their funds. It is not clear at all how Mr Bogle could have reaped a lot of money for himself out of Vanguard if Wellington was only giving him a limited amount of leeway when they let him create Vanguard. No sane company creates a competitor unless it benefits them. There is an interesting story there of how backroom deals are struck in the finance world and who really controls what.
No, that's just not correct. Don't take my word for it, read the book. http://www.amazon.com/The-House-that-Bo ... 0071749063.

Wellington Management Company was opposed to the creation of Vanguard. The separate board of directors of Wellington Mutual Fund supported Mr. Bogle by creating Vanguard. It's as if the board of directors of Fidelity Magellan Fund decided to rebel against Fidelity and create its own mutual fund family.

After Vanguard was created, Wellington Management Company kept a diminished role as adviser to some Vanguard funds.
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Being Mr. Bogle's Company has 3 Trillion Dollars

Post by abuss368 »

Bogleheads,

Imagine the yield Mr. Bogle would be receiving on that investment portfolio!

Best.
John C. Bogle: “Simplicity is the master key to financial success."
Post Reply