I am actually sorry you took it that way; it just gets old after a while. My personal opinion is Jack Bogle was/is close to a Saint. He made himself a lot of money but he could have made a lot more structuring Vanguard different way, but to me he is/was a saint. I believe he designed it to be the way you perceive it, but perception is not reality. Bogle's influence is muted now and has been for some time and every day it will grow more so; reality is a painful mistress.Silk McCue wrote: ↑Sun May 06, 2018 4:09 pmThanks for the mocking and misconstrued reply. Doing so certainly added to the conversation immensely and was certainly a benefit to the OP. You are to be commended.MrPotatoHead wrote: ↑Sun May 06, 2018 3:35 pmLOL...gosh you are killing me. That adults actually believe this fairy tale. So by this logic I should really be loving on my USAA insurance... But, whatever it takes you to get through the day...Silk McCue wrote: ↑Sat May 05, 2018 9:15 amVanguard isn't in business to make a profit, but rather to serve the interests of its owners (those of us that hold Vanguard funds) and thus they are the lost cost leader. Even in the actively managed funds Vanguard does this at lower expense than the competitors because they do not have a direct profit motive.
And this is not mean to be snarky, just more like I am stunned every time I see it. But I get it, we all have to believe in something. I am partial to the flying spaghetti monster myself.
Others have posted some of the reason way I say this...but I'll just mention, you can find many books explaining how you can rich starting your own no-profit.
The central problem that is faced is the simple fact you have to pay market based compensation for employees who have skills that are in high demand or require special knowledge. 3 of my 4 children are either a CPAs or actuaries, all are in the insurance industry. I can assure you their level of compensation will not change because they work for a mutual insurance company verses a for profit publicly traded firm.
So essentially the costs are the same for every company. The only savings to be had is via returning what would be profit to the owners of the company. But the problem with non-profits is there is no incentive to do so. So the returned profit tends to simply dissipate in inefficiency as there is no catalyst to return value to the owners.
In my consulting firm, I have a standard rule. You get paid your salary for x-amount of billable hours per year. Then you get paid a bonus for x-amount to x- amount. And for every hour you bill over x amount per year you get 25 extra dollars per hour billed. You would be amazed at how many contractors who use to bill 1600 hours a year suddenly started billing 1800-2400 hours a year. And how all of a sudden a few found the energy for 2500 of more hours in a year. That is the profit motive at work.
Mr Bogle it seems was driven by a basic inner decency and willing to take from himself so others would prosper. You cannot realistically expect those values to transfer to those who follow despite the appearance and rhetoric of loudly espoused corporate cultural values.
As I said, I was not trying to belittle you. It just gets old and I am getting up in age. I have been in business for a long time as an employee, a consultant, a multiple business owner, on the board of directors of for profits and on the board of directors of non-profits. This is the vantage from which I make my comments as they reflect my own experience.