what was vanguard like before the internet?

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Hulk
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what was vanguard like before the internet?

Post by Hulk » Sat Oct 19, 2019 6:58 pm

For all you index investor out there who are long in the tooth, just curious what you did pre internet. Today, I feel like index funds are a no brainer for do it yourselfers. You don't need some middle man financial advisor to help you, you just log onto vanguard and buy. But what did you do prior to that being an option? Did you have to go through some middle man? How did he get paid? Maybe it was quite simple and I am not understanding something. But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?

cheers

Hulk

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Re: what was vanguard like before the internet?

Post by tfb » Sat Oct 19, 2019 7:08 pm

Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet.
Landline phone and USPS mail. Vanguard had deposit slips. You mail a check and fill in the fund number on the deposit slip. Vanguard still has those fund numbers but most people don't refer to the fund numbers any more. If you wanted to check you balance or trade from one fund to another, you call a voice response phone system.
Harry Sit, taking a break from the forums.

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Re: what was vanguard like before the internet?

Post by Phineas J. Whoopee » Sat Oct 19, 2019 7:12 pm

Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet. Today, I feel like index funds are a no brainer for do it yourselfers. You don't need some middle man financial advisor to help you, you just log onto vanguard and buy. But what did you do prior to that being an option? Did you have to go through some middle man? How did he get paid? Maybe it was quite simple and I am not understanding something. But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?

cheers

Hulk
My first taxable investment was with Vanguard, not in the 1980s, so I don't qualify to answer your question, but in the early 1990s, after I finished paying for my schooling.

I spent a good part of the previous year, anticipating I would have free cash that didn't go to school debt, examining the situation. I already was then, although it isn't and never has been my job title, a project manager. I approached investment instruments like I would a project. Vanguard stood out. I like project plans that will work.

They were more expensive then, but still less than competitors. One filled out physical forms, and sent physical checks. That's how everything worked back then, and I don't feel old.

They had an automated telephone system by which to find net asset values, NAVs, which I used whenever I wanted to know.

Why do you ask, Hulk? You think we were all running around whacking mammoths with clubs?

PJW
Last edited by Phineas J. Whoopee on Sat Oct 19, 2019 7:23 pm, edited 3 times in total.

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Re: what was vanguard like before the internet?

Post by columbia » Sat Oct 19, 2019 7:13 pm

I happen to be visiting my 83 year old parents...

My father bought his first Vanguard fund in the 70s through a broker. (This was after attending one of those investing sales pitches at a hotel meeting space.)

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Re: what was vanguard like before the internet?

Post by nisiprius » Sat Oct 19, 2019 7:15 pm

Telephones existed.

No-load funds were, indeed, a little laborious because obviously no advisor would tell you about them or recommend them.

You needed to learn that the Vanguard 500 Index Fund existed. Likely ways to do that were by seeing a print advertisement in a finance magazine like Kiplinger's, or by having it mentioned in an investing book like Andrew Tobias' The Only Investment Guide You'll Ever Need, or in some financial writer's column.

Having discovered the fund, you would then telephone or write directly to Vanguard. There's another interesting date here. Before the mid-1990s, you could not buy a mutual fund through a brokerage. That was a Charles Schwab innovation, and contributed greatly to the growth and success of no-load funds.

Before that, the only way to buy a mutual fund was to have an account directly at the mutual fund company. In that account, you had your choice of funds from that fund company's family, with (usually) no fees for buying, redeeming, or exchanging funds within the family.

You called them or wrote them. They sent you paperwork. You signed it and mailed it with a check. The account opening process was much like opening a brokerage account now. You then got a paper statement mailed to you quarterly. If you wanted to know how you were doing in between, you telephoned them.
columbia wrote:
Sat Oct 19, 2019 7:13 pm
My father bought his first Vanguard fund in the 70s through a broker. (This was after attending one of those investing sales pitches at a hotel meeting space.)
This puzzles me because it contradicts what I thought--that you couldn't hold a mutual fund within a brokerage account before the mid-1990s. There may be some interesting technicalities here. I don't think the fund could have been in the brokerage in the sense of being listed as a line item on the brokerage statements along with stocks. Or maybe brokerages, as a service to clients, would do the legwork to open your account in your name at a mutual fund company. Or, maybe I'm just plain wrong.

Wait, there's another question to be answered here. I think I remember that Vanguard funds were not always no-load. So when did they become no-load?
Last edited by nisiprius on Sat Oct 19, 2019 7:21 pm, edited 2 times in total.
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Re: what was vanguard like before the internet?

Post by Buckeye Chuck » Sat Oct 19, 2019 7:20 pm

I sat down At the kitchen table in the 90s and filled out lots of paperwork with a ballpoint pen. I mailed lots of paperwork and checks. I would send in a monthly check as often as I could. Received statements and confirms back in the mail. Worked fine.

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Re: what was vanguard like before the internet?

Post by tibbitts » Sat Oct 19, 2019 7:23 pm

Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet. Today, I feel like index funds are a no brainer for do it yourselfers. You don't need some middle man financial advisor to help you, you just log onto vanguard and buy. But what did you do prior to that being an option? Did you have to go through some middle man? How did he get paid? Maybe it was quite simple and I am not understanding something. But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?

cheers

Hulk
I don't understand - it was more expensive for two reasons: smaller asset base and probably more intervention. But in general industry costs have gone down. Why would there be a middleman? Vanguard sold funds directly - brokerages were not involved.

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Re: what was vanguard like before the internet?

Post by Big Dog » Sat Oct 19, 2019 7:23 pm

Telephone and US mail. once an account was setup, Vanguard provided deposit slips and even franked (postage paid) envelopes to mail checks in to Valley Forge.

Joined Vanguard in early 80's. No financial advisor. Just read an article about Jack Bogle in the press; Wall Street hated him at the time, so he seemed like the type of guy I wanted to invest with. Called the 800 number, chose the S&P500 fund.

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Re: what was vanguard like before the internet?

Post by Svensk Anga » Sat Oct 19, 2019 7:30 pm

I found Vanguard in 1982 via an ad in the Wall Street Journal. I had read a book from Kiplinger's about how to manage one's money and they endorsed money market mutual funds. I was just starting out after college and I needed a good place to accumulate an emergency fund, then down payment money. It was worth looking for a good rate because bank savings accounts paid little but MM funds were paying maybe 10%.

I called Vanguard and a number of competitors and asked them to mail me their into kit (prospectus and account application). I wound up with Vanguard because they had the best rates. I had no clue about their ownership structure advantage at that time.

The big deal circa 1982 was telephone switching between funds within one fund family. I thought Vanguard had solid choices to move to in equity funds after I got a bit of breathing room on the cash buffer, so settled on Vanguard as my fund family.

For many years I sent checks in with account deposit slips every paycheck. They would mail back a confirmation with another deposit slip at the bottom and a postage-paid envelope for my next buy.

About the only account tracking it was practical to do was to review quarterly statements. I suppose one could have looked up their fund NAV's in the WSJ every day and work up a total, but I never bothered with that. Behaviorally, that likely was better than our current flood of information.

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Re: what was vanguard like before the internet?

Post by Clever_Username » Sat Oct 19, 2019 8:24 pm

Buckeye Chuck wrote:
Sat Oct 19, 2019 7:20 pm
I would send in a monthly check as often as I could.
There is a natural limit to how often one can send in a monthly check ;-)

While I'm not the topic author, I'd like to thank everyone who told their story in this thread, or who will do so. I am finding it interesting.
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Re: what was vanguard like before the internet?

Post by Hulk » Sat Oct 19, 2019 8:26 pm

Phineas J. Whoopee wrote:
Sat Oct 19, 2019 7:12 pm
Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet. Today, I feel like index funds are a no brainer for do it yourselfers. You don't need some middle man financial advisor to help you, you just log onto vanguard and buy. But what did you do prior to that being an option? Did you have to go through some middle man? How did he get paid? Maybe it was quite simple and I am not understanding something. But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?

cheers

Hulk
My first taxable investment was with Vanguard, not in the 1980s, so I don't qualify to answer your question, but in the early 1990s, after I finished paying for my schooling.

I spent a good part of the previous year, anticipating I would have free cash that didn't go to school debt, examining the situation. I already was then, although it isn't and never has been my job title, a project manager. I approached investment instruments like I would a project. Vanguard stood out. I like project plans that will work.

They were more expensive then, but still less than competitors. One filled out physical forms, and sent physical checks. That's how everything worked back then, and I don't feel old.

They had an automated telephone system by which to find net asset values, NAVs, which I used whenever I wanted to know.

Why do you ask, Hulk? You think we were all running around whacking mammoths with clubs?

PJW
:D

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Re: what was vanguard like before the internet?

Post by GerryL » Sat Oct 19, 2019 8:35 pm

Buckeye Chuck wrote:
Sat Oct 19, 2019 7:20 pm
I sat down At the kitchen table in the 90s and filled out lots of paperwork with a ballpoint pen. I mailed lots of paperwork and checks. I would send in a monthly check as often as I could. Received statements and confirms back in the mail. Worked fine.
Yup. This was me. Early 90s. Ballpoint pen. I think I was also able to set up a recurring auto-purchase from my bank account to buy some shares each month in a balanced (Asset Allocation) fund. But my kitchen is too small for a table, and the little dining room table was -- and continues to be -- covered with … stuff.

My VG login ID indicated the year I started to go onto their website: 1997.

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Re: what was vanguard like before the internet?

Post by dodecahedron » Sat Oct 19, 2019 8:38 pm

nisiprius wrote:
Sat Oct 19, 2019 7:15 pm
Wait, there's another question to be answered here. I think I remember that Vanguard funds were not always no-load. So when did they become no-load?
Your memory is correct. Jack Bogle spelled all the history out in great detail in his last book, ¨Stay the Course: the Story of Vanguard and the Index Revolution.¨
Jack Bogle, in his final book, wrote: p. 43: In those early days, the Vanguard funds were ¨load funds,¨ sold exclusively through brokers.

p. 34: In September 1975, just a year after the new firm´s founding, the fund directors approved Vanguard´s formation of an internally administered ¨unmanaged¨ mutual fund, the world´s first index mutual fund.

Only a year and a half after that, in February 1977, the funds eliminated all sales loads and took responsibility for their own marketing and distribution.
Last edited by dodecahedron on Sat Oct 19, 2019 8:44 pm, edited 1 time in total.

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Re: what was vanguard like before the internet?

Post by mindboggling » Sat Oct 19, 2019 8:43 pm

I started with Vanguard in 1987. Before that, I was briefly with Fidelity, and my first no-load mutual funds were at Scudder (Stevens & Clark?). Mutual fund prices were published once-a-week in newspapers. You had to fill out a coupon or something and send it in. Then they mailed you a prospectus, which you were supposed to read before investing (uh-huh, right). The prospectus included a form to open an account. You filled it out, wrote a paper check and sent it in. A week or two later you got a paper statement acknowledging your payment and a welcome package. I don't remember ever using the automated phone system.
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Re: what was vanguard like before the internet?

Post by dodecahedron » Sat Oct 19, 2019 8:46 pm

I remember a toll-free number you could call and punch in your account number (and maybe your SSN too?) and an automated voice would tell you the value in your fund accounts as of the close of business the previous day. This was in the 1980s.

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Re: what was vanguard like before the internet?

Post by JoMoney » Sat Oct 19, 2019 8:50 pm

I had a Vanguard account in the 1990's when the Internet was a thing, online brokerages were a thing, but I don't recall Vanguard offering online services. Vanguard's no-load funds were frequently recommended by Bob Brinker on his "Moneytalk" radio show.
Vanguard had a phone number you could call, and they would send you out a package filled with booklets of information and forms to send through the mail to open an account. You could call in to the system and login to your account to get balance info and perform transactions. Statements were sent through the mail.
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Re: what was vanguard like before the internet?

Post by columbia » Sat Oct 19, 2019 8:51 pm

dodecahedron wrote:
Sat Oct 19, 2019 8:38 pm
nisiprius wrote:
Sat Oct 19, 2019 7:15 pm
Wait, there's another question to be answered here. I think I remember that Vanguard funds were not always no-load. So when did they become no-load?
Your memory is correct. Jack Bogle spelled all the history out in great detail in his last book, ¨Stay the Course: the Story of Vanguard and the Index Revolution.¨
Jack Bogle, in his final book, wrote: p. 43: In those early days, the Vanguard funds were ¨load funds,¨ sold exclusively through brokers.

p. 34: In September 1975, just a year after the new firm´s founding, the fund directors approved Vanguard´s formation of an internally administered ¨unmanaged¨ mutual fund, the world´s first index mutual fund.

Only a year and a half after that, in February 1977, the funds eliminated all sales loads and took responsibility for their own marketing and distribution.


“43: In those early days, the Vanguard funds were ¨load funds,¨ sold exclusively through brokers.”

Good to know that my father’s memory is still sharp! 😀

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Re: what was vanguard like before the internet?

Post by whodidntante » Sat Oct 19, 2019 9:12 pm

While I'm not old enough to have clubbed mammoths, I do remember that some of Vanguard's competitors had some beautiful literature. And every fund bought undervalued stocks.

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Re: what was vanguard like before the internet?

Post by neurosphere » Sat Oct 19, 2019 9:23 pm

dodecahedron wrote:
Sat Oct 19, 2019 8:46 pm
I remember a toll-free number you could call and punch in your account number (and maybe your SSN too?) and an automated voice would tell you the value in your fund accounts as of the close of business the previous day. This was in the 1980s.
I did this with an American Fund mutual fund I owned in 1995-1999. The internet existed, but not for all firms. :)
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Re: what was vanguard like before the internet?

Post by celia » Sat Oct 19, 2019 9:25 pm

We were with Vanguard before the 1987 market crash. I was up in the middle of the night on Black Monday feeding a baby when I decided to call in and check on the balances in our accounts. I tried several times to get through, but gave up (figuring the nightly transactions were still running) and went back to bed. When I finally got around to seeing the news that day, I realized why I couldn't get through. It only went downhill from there . . . .

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Re: what was vanguard like before the internet?

Post by Hulk » Sat Oct 19, 2019 9:25 pm

Did anyone tax loss harvest much in this environment? I feel like that would have been tough, keeping up with all the accounting of specific ID in a timely enough manner to be actionable through snail mail.

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Re: what was vanguard like before the internet?

Post by Big Dog » Sat Oct 19, 2019 9:39 pm

Hulk wrote:
Sat Oct 19, 2019 9:25 pm
Did anyone tax loss harvest much in this environment? I feel like that would have been tough, keeping up with all the accounting of specific ID in a timely enough manner to be actionable through snail mail.
I did not, as I was a buy-and-hold investor. (And truth be told, wasn't knowledgeable enuf about investing to understand the benefits of TLH.)

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Re: what was vanguard like before the internet?

Post by dodecahedron » Sat Oct 19, 2019 9:49 pm

Hulk wrote:
Sat Oct 19, 2019 9:25 pm
Did anyone tax loss harvest much in this environment? I feel like that would have been tough, keeping up with all the accounting of specific ID in a timely enough manner to be actionable through snail mail.
According to a recent article by MIT Professor Andrew Lo and colleagues, transactions costs prior to the 21st century were so large that tax loss harvesting was only available to investors with extremely large accounts.

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Re: what was vanguard like before the internet?

Post by celia » Sat Oct 19, 2019 9:55 pm

Hulk wrote:
Sat Oct 19, 2019 9:25 pm
Did anyone tax loss harvest much in this environment? I feel like that would have been tough, keeping up with all the accounting of specific ID in a timely enough manner to be actionable through snail mail.
We didn't have much invested at that time and it was mostly in retirement accounts. If I recall correctly, either the monthly/quarterly statement or transaction statement said what the cost basis was and I think you had to track it yourself. The custodian didn't start reporting the cost basis to the IRS until 2011, which is way after the internet existed.

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Re: what was vanguard like before the internet?

Post by sport » Sat Oct 19, 2019 10:35 pm

In 1971 I decided that I wanted to invest in a mutual fund. However, I knew nothing about them. So, I went to a broker and he recommended Fidelity Trend Fund for me. So, I opened an account and sent in regular purchases by paper check. The only problem was there was a load of 8.75% ! If I would send in $100, my account would show a purchase of $91.25. I was perfectly willing to pay the load on the initial purchase, because the broker earned some money by leading me to a good fund. However, for all succeeding purchases, the broker was not doing anything and was getting paid anyway. This just did not seem right. I did not even have a brokerage account. My statements came directly from Fidelity.

So, I did some investigating and learned there were no-load funds. I went to the library and found a good book that advised that no-load funds were just as good as load funds; the only difference was the load. Accordingly, after 3 months of contributing to Fidelity Trend. I opened an account at T. Rowe Price in their Growth Fund. I became unhappy with that fund and TRP due to poor performance. However, the performance really just mirrored a poor stock market during the 1970's. I was ignorant and should have been buying more when the market was down, but I stopped investing for a few years. When I wanted to get back into investing, I looked at the past performance of various funds and settled on Vanguard Windsor Fund. I mailed in my initial deposit on a really bad day in the market in 1980. I have been a Vanguard investor ever since. Thanks to the Bogleheads, I learned about proper diversification and have become a somewhat knowledgeable mutual fund investor.

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Re: what was vanguard like before the internet?

Post by criticalmass » Sat Oct 19, 2019 10:39 pm

We sent a telegram with our orders, then walked to the railway station to send the cash via the Western Union office.....

It was the 1980s/70s/90s, not the 1880s, so the telephone and prepaid envelopes full of checks worked well. I used MBNA's high yield money market in much the same way. (That account wouldn't get internet access until BoA bought MBNA circa 2006). Vanguard had their web page open for users by 1996-1997, and even many banks didn't have their accounts online yet. Quicken and MS Money access was more common in the early days of the web and SSL.

Vanguard had a *lot* more folks answering the phone in those pre Internet days. The asset sizes were much smaller. For both of these reasons, expenses were higher then than now, but still lower than everyone else.

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Re: what was vanguard like before the internet?

Post by Grt2bOutdoors » Sat Oct 19, 2019 10:49 pm

Advertising in the Wall Street Journal with an 800 number to call. Pick up the phone and have them mail you an application and a prospectus. Minimum investment for all funds except the STAR fund was $3,000 (STAR was $1,000) and this was back in the late ‘80s. Inflation adjusted it was a lot higher.
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Re: what was vanguard like before the internet?

Post by stlutz » Sat Oct 19, 2019 11:03 pm

I remember when I started with VG in the late 90s that you could only an exchange between index funds only by US Mail.

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Re: what was vanguard like before the internet?

Post by Random Musings » Sat Oct 19, 2019 11:34 pm

I remember mailbox in forms and a check to open up my money market fund t Vanguard from money I saved up during high school. Prices for funds were sometimes in newspapers and Barron's had them. By the time I started working in the mid 80's, 401k's were around and I was lucky to have Vanguard as our provider in my second job. Choices then were a money market fund, Wellington, Morgan Growth, Windsor Fund, Index 500, Total Bond, International Growth and perhaps a few others. I remember STAR and extended market index were also choices I had in the 80's as well. Fund Choices in the plans were definitely more limited and you either used the mail or the phone. However, since I never been an active trader, the mail and phone worked just fine. Factor loadings, what the H*^l is that?

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Re: what was vanguard like before the internet?

Post by sport » Sun Oct 20, 2019 12:06 am

Grt2bOutdoors wrote:
Sat Oct 19, 2019 10:49 pm
Advertising in the Wall Street Journal with an 800 number to call. Pick up the phone and have them mail you an application and a prospectus. Minimum investment for all funds except the STAR fund was $3,000 (STAR was $1,000) and this was back in the late ‘80s. Inflation adjusted it was a lot higher.
When I made my first purchase of Windsor Fund in 1980, the minimum investment was $500. I don't remember when it increased to $3000.

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Re: what was vanguard like before the internet?

Post by 2pedals » Sun Oct 20, 2019 12:16 am

Technology has changed our lives. I think if you weren't around before the first handheld calculator I think it would be hard for someone to relate.

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Re: what was vanguard like before the internet?

Post by Klewles » Sun Oct 20, 2019 1:08 am

Started with Vanguard in the late 1980's. As others have said, phone and mail worked fine -- who knew there was any other way?

At the risk of sounding like a cranky old guy (which I am): the quality of service at VG was much better then than it is now.

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Re: what was vanguard like before the internet?

Post by RickBoglehead » Sun Oct 20, 2019 6:09 am

Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet. Today, I feel like index funds are a no brainer for do it yourselfers. You don't need some middle man financial advisor to help you, you just log onto vanguard and buy. But what did you do prior to that being an option? Did you have to go through some middle man? How did he get paid? Maybe it was quite simple and I am not understanding something. But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?

cheers

Hulk
Vanguard didn't PUSH anything.

I worked in the industry in the late 80s. I interviewed with now former CEO McNabb when he was head of Marketing. He laughed when we discussed how I could help. Basically, Fidelity or Merrill Lynch ran a big ad in the WSJ, Vanguard ran a tiny ad with the 800# on the opposing page. They did little direct mail.

As I recall, Merrill was #1, Fidelity was #2, and Vanguard was much smaller. Magellan was THE mutual fund.
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Re: what was vanguard like before the internet?

Post by averagedude » Sun Oct 20, 2019 6:34 am

In a way, it was better in the old days. I only checked my balances 4 times a year when i got a statement, instead of 52+ times a year.

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Re: what was vanguard like before the internet?

Post by Grasshopper » Sun Oct 20, 2019 6:50 am

My first MF was Windsor mailing my check in with a prepaid envelope. I think it was a while before Vanguard would let you view your account on line, but you could only do this with with an AOL account. I guess that Vanguard didn't trust the "web" but America On Line had a direct connection to Vanguard.

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Re: what was vanguard like before the internet?

Post by UpperNwGuy » Sun Oct 20, 2019 6:54 am

RickBoglehead wrote:
Sun Oct 20, 2019 6:09 am
As I recall, Merrill was #1, Fidelity was #2, and Vanguard was much smaller. Magellan was THE mutual fund.
Magellan was a household word back then. All of us knew about Magellan even if we didn't do any investing.

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Re: what was vanguard like before the internet?

Post by fourwheelcycle » Sun Oct 20, 2019 7:15 am

tfb wrote:
Sat Oct 19, 2019 7:08 pm
Landline phone and USPS mail. Vanguard had deposit slips. You mail a check and fill in the fund number on the deposit slip. Vanguard still has those fund numbers but most people don't refer to the fund numbers any more. If you wanted to check your balance or trade from one fund to another, you called a voice response phone system.
This. I started with Vanguard in the early 1980s, mostly by phone and mail as I recall. At that time they did have one physical office in our state, which I think I went to once or twice when I had other business near their office. We also had checks and a VISA debit card for our account. I remember we could go into a bank on vacation to get a cash advance on the debit card and there would be no interest charge, compared to an immediate interest charge if we did the same thing with our regular BoA credit card. At some point, certainly by the end of the 1980s, everything switched to the internet and Vanguard closed their only physical office in our state.
Last edited by fourwheelcycle on Sun Oct 20, 2019 7:20 am, edited 1 time in total.

livesoft
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Re: what was vanguard like before the internet?

Post by livesoft » Sun Oct 20, 2019 7:19 am

Even in the early 1980's Vanguard and others had automatic investing programs (AIP) where they would take money from one's checking account at monthly (or other) intervals to invest. Many companies had a lower initial minimum purchased if one signed up for their AIP to invest monthly.

And they all sent one post-paid envelopes to use to mail in checks. I think nowadays one might have to put their own postage on mail-in envelopes, but I haven't seen one in a while.
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Re: what was vanguard like before the internet?

Post by gd » Sun Oct 20, 2019 7:24 am

Hulk wrote:
Sat Oct 19, 2019 6:58 pm
For all you index investor out there who are long in the tooth, just curious what you did pre internet. ... But how the heck did Bogle push index funds in the 80s if the internet wasn't there and a human wasn't paid to help. How was it still cheap if a human did help?
The occasional magazine or newspaper article or ad would provoke a phone call or postal mail request for info. You'd get a brochure describing the company, products, and sales pitch, probably with an application. Everything else was postal mail, with some telephone exchanges. It worked fine.

Ask yourself how many of your financial transactions need to be done that minute, vs. in two days. That's need, not want for immediate gratification.

And they didn't pay for a huge internet infrastructure- how much, exactly, does that cost the company?

It reminds me of reading Sherlock Holmes stories, noting how often he'd send telegrams across London with boys delivering, and was always discussing train schedules to towns outside the city. Nice that you're thinking about this, keep going and expand your horizon.

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Re: what was vanguard like before the internet?

Post by RickBoglehead » Sun Oct 20, 2019 7:28 am

fourwheelcycle wrote:
Sun Oct 20, 2019 7:15 am
tfb wrote:
Sat Oct 19, 2019 7:08 pm
Landline phone and USPS mail. Vanguard had deposit slips. You mail a check and fill in the fund number on the deposit slip. Vanguard still has those fund numbers but most people don't refer to the fund numbers any more. If you wanted to check your balance or trade from one fund to another, you called a voice response phone system.
This. I started with Vanguard in the early 1980s, mostly by phone and mail as I recall. At that time they did have one physical office in our state, which I think I went to once or twice when I had other business near their office. We also had checks and a VISA debit card for our account. I remember we could go into a bank on vacation to get a cash advance on the debit card and there would be no interest charge, compared to an immediate interest charge if we did the same thing with our regular BoA credit card. At some point, certainly by the end of the 1980s, everything switched to the internet and Vanguard closed their only physical office in our state.
End of the 1980s? No, I was in the industry until 1990 and no one had websites. Way back machine shows 1997. Fidelity was first, and that was 1995.

From Fidelity's site:

1995 - Fidelity becomes an Internet pioneer as the first mutual fund company to create a home page on the World Wide Web.

gd wrote:
Sun Oct 20, 2019 7:24 am

The occasional magazine or newspaper article or ad would provoke a phone call or postal mail request for info. You'd get a brochure describing the company, products, and sales pitch, probably with an application. Everything else was postal mail, with some telephone exchanges. It worked fine.
Called a "fulfillment kit". Include a prospectus, a letter, application, and any state-specific requirements.
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Re: what was vanguard like before the internet?

Post by Brianmcg321 » Sun Oct 20, 2019 8:04 am

I remember way back when I called Vanguard from my telephone which was hooked to a wall to open an account.

The nice man on the other line inquired on what funds I'd like to open my account with.

A week later, I received a large envelope with 3-4 prospectuses on paper (these are the things that are posted online now, that you don't read, but you click a check mark saying you did).

I was told I had to read each one and then mail in my check with the deposit slip.

Just recently while on vacation at the beach on my iPhone I transferred a 401k from a previous employer and did some rebalancing of my AA, all with a couple of clicks, and I didn't have to interrupt the podcast I was listening to. :beer
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Re: what was vanguard like before the internet?

Post by fourwheelcycle » Sun Oct 20, 2019 8:24 am

RickBoglehead wrote:
Sun Oct 20, 2019 7:28 am
fourwheelcycle wrote:
Sun Oct 20, 2019 7:15 am
At some point, certainly by the end of the 1980s, [/b]everything switched to the internet and Vanguard closed their only physical office in our state.
End of the 1980s? No, I was in the industry until 1990 and no one had websites. Way back machine shows 1997. Fidelity was first, and that was 1995.
My wife already knows my memory is going - now you do too! I think of post-1990 as the modern era, so I thought Vanguard must have been on the internet by then.

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Re: what was vanguard like before the internet?

Post by sport » Sun Oct 20, 2019 10:00 am

The mutual fund industry was not the only area that did not have computers. Now, the stock market will make a major move within 10 or 15 minutes (perhaps less). In the "old days" these moves would take several days. When I had some money to invest, I would watch the market and when it looked like it was starting to go down, I would put my investment in the mail. It would take 2 or 3 days for the check to get to Vanguard and that was about the length of time it took for the market to finish its short term drop. Yes, it was market timing, but the times were very short and the size of the investments were very small. I often guessed correctly and was able to make my purchases at prices a little lower than random mailing would achieve.

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Re: what was vanguard like before the internet?

Post by Hockey10 » Sun Oct 20, 2019 10:10 am

I remember the ads for Vanguard in publications such as the WSJ, Money, Forbes, Fortune, and Business Week. I also remember mailing a check for $2,000 to my Vanguard IRA account each year starting in the early 1980s. I don't remember ever calling Vanguard in those days. Everything was done by snail mail.

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HueyLD
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Re: what was vanguard like before the internet?

Post by HueyLD » Sun Oct 20, 2019 10:23 am

May I ask a related question?

What was Vanguard like before the days of calculators?

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Re: what was vanguard like before the internet?

Post by Grt2bOutdoors » Sun Oct 20, 2019 10:28 am

sport wrote:
Sun Oct 20, 2019 12:06 am
Grt2bOutdoors wrote:
Sat Oct 19, 2019 10:49 pm
Advertising in the Wall Street Journal with an 800 number to call. Pick up the phone and have them mail you an application and a prospectus. Minimum investment for all funds except the STAR fund was $3,000 (STAR was $1,000) and this was back in the late ‘80s. Inflation adjusted it was a lot higher.
When I made my first purchase of Windsor Fund in 1980, the minimum investment was $500. I don't remember when it increased to $3000.
Around 1989, I recall it was $3k. I didn’t have the minimum so went with TRowe Price at $50 a month with their automatic asset builder feature. Later on, I moved to Vanguard when I had enough to get started with them.
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Re: what was vanguard like before the internet?

Post by fru-gal » Sun Oct 20, 2019 10:36 am

I used to mail monthly checks to Twentieth Century. They had a lot of information for small investors. Plus there were magazines with lots of articles.

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Re: what was vanguard like before the internet?

Post by Spirit Rider » Sun Oct 20, 2019 11:03 am

HueyLD wrote:
Sun Oct 20, 2019 10:23 am
May I ask a related question?

What was Vanguard like before the days of calculators?
Vanguard (1975) didn't predate calculators. Even desktop electronic calculators were available in the mid-60s

I bought a TI SR-50 calculator in 1974 for about $200. It was a hand held electronic scientific calculator with bright red 7-segment LEDs and was built like a tank. The SR stood for "slide rule". Talk about a labor saving device.

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Re: what was vanguard like before the internet?

Post by Grt2bOutdoors » Sun Oct 20, 2019 12:17 pm

fru-gal wrote:
Sun Oct 20, 2019 10:36 am
I used to mail monthly checks to Twentieth Century. They had a lot of information for small investors. Plus there were magazines with lots of articles.
Had them too, I started with $25 a month( but they would open up an account for $1. The only thing is their expense ratio was high at 1%), then moved to TRowe Price, then Vanguard.
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Re: what was vanguard like before the internet?

Post by motorcyclesarecool » Sun Oct 20, 2019 12:55 pm

Big Dog wrote:
Sat Oct 19, 2019 7:23 pm
Telephone and US mail. once an account was setup, Vanguard provided deposit slips and even franked (postage paid) envelopes to mail checks in to Valley Forge.
This! I used to feel like I was swimming in postage paid envelopes! Any mailing from Vanguard included at least one, and deposit slips. That was the biggest difference in the pre-internet age. My grandfather gave me $1000 on the condition that I put it in the STAR fund. He gave me one of his old Morningstar backstops. He got me going in this habit.
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