John Clifton Bogle was born in May 1929 and died in January 2019 at the age of 89. He was a renowned American Investor and a business advisor for startups across the world. He was also popular for his multiple philanthropic works. The first Index Fund was created by Bogle. He was also the chief executive of The Vanguard Group.
As per records in 2012, his net worth was US$80. He was married to Eve Bogle with 6 children. Bogle was also renowned for his inspirational publications. One of his popular books, “Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor,” is considered a classic and bestseller in the investment industry.
Early life
John Bogle was born in May 1929 in New Jersey. His parents were William Yates Bogle, Jr. and Josephine Lorraine Hipkins.
John’s childhood was full of challenges, which makes his story inspiring to investors across the world. The family incurred major losses that led to major depression. His dad fell into alcoholism that attributed to a divorce. The family had to sell the home and resort to lower livings standards with respect to a size that could barely fit the family of 8 people.
Education
Bogle had a twin, David, they both attended Manasquan High School within New Jersey. The two-posted exemplary performances year after year that led to a scholarship in Blair Academy. This was the beginning of success for John Bogle. He was exposed to bright and creative minds that opened up his mind into business. John was particularly good in Mathematics and sciences; he was mostly fascinated by computations and numbers.
He later graduated from Blair Academy with impressive grades that earned him a position at the Princeton University. The firm foundation and passion in computations led to him to pursue economics and investment at the university.
While he was in the university, he familiarized with the mutual fund industry, which was also a basis of his thesis. Bogle’s thesis, “The Economic Role of the Investment Company,” has been the basis of most successful business establishments. Bogle spent most of his time in junior and senior school to develop the thesis.
In 1951, he earned his undergraduate degree. While pursuing his undergraduate, he was also attending weekend and evening classes at the University of Pennsylvania.
Investment Career
After his graduation at Princeton University, he chose to focus his career on banking and investments. He had his first chance to work with Wellington Fund as the manager, his exemplary performance while in the company boosted his reputation hence growth in the industry. Bogle’s boss is on the record for demonstrating confidence in Bogle’s skills in fund management.
The consistency in performance and passion for investment funds led to his promotion to assistant director of the company in 1955. The promotion exposed him to more resources and opportunities in the field. He had an opportunity to make more critical decisions based on the performance of the company at the time. Bogle had more control over the investment decisions of the company.
Performance
During his tenure, he demonstrated high levels of creativity by developing initiatives that challenged Wellington’s management to change its structures. Previously, the Wellington Fund was focused on a single fund. While it was profitable for the firm, it was a common strategy that was losing its effectiveness fast. Bogle had a different perspective of the investment fund industry; he led the company in the establishment of a new fund strategy.
Establishment of a new fund was a game changer in the industry. It was also a turning point for Bogle’s career. Most professionals in the industry today are implementing policies and theories developed by John Bogle. The practicability of his investment strategies attributes to its popularity across the world.
In 1970, Bogle replaced Morgan as chair of Wellington Fund. It was a unanimous agreement by the board because of the exemplary performance and strategies that attributed to huge growth margin of the firm. Bogle was open to criticism and ready to learn from his mistakes; this was a unique attribute in his career that led to his fast growth in the industry.
In 1974, he founded the Vanguard Company, which still ranks highly in the investment funding industry. Vanguard Company has led to the establishment of a hundred other companies in the Investment world. He has featured severally in listings of top investment personalities across the world; in 1999, he was listed among the top four investment giants across the world.
Two years later, he founded the First Index Investment Trust as an extension of vanguard Company. It was the first Index mutual fund available to the public for individual investors. The company was ranked alongside Gutenberg printing as top merger companies.
Bogle developed heart complications in the late 1990s. He has to resign his active role as CEO of Vanguard. He handpicked John Brennan as the successor but later had a successful heart transplant. He came back to active business to head the Bogle Financial Markets Research Center. It was a firm established within the Vanguard framework.
Investment Philosophy
Instead of the traditional way of running funds through charging high costs and beating the index, he focused on mimicking the index performance. Making decisions based on a performance recorded over a long period led to high returns and low-cost implications. The costs were lower than actively managed funds.