The 10 Biggest Life Lessons Jack Bogle Ever Taught Us

Jack Bogle may not be the most common household name but serious investors know it well. He was the CEO of Vanguard Group, an investment firm he founded in 1974. Born just six months before the Great Depression of 1929, he recently passed away on January 16th leaving behind a legacy of principle, commitment, and six children. It is worth taking a look at some of the life lessons he taught that helped thousands of people become successful and prosperous.

1. On investing: it is not as difficult as it looks.

These days there are many people who look at the rate of return on bank accounts and ask themselves why bother putting any money there. Which leaves investing, but it is something many people find complicated or intimidating. Bogle offers an encouraging perspective for those in this group. Successful investing, like life, involves doing a few things right and avoid making serious mistakes. You don’t have to do everything right all the time, and mistakes are just part of the learning process.

2. Simplicity is the fallback position to take.

Problems are a part of everyday life, so when things start to get complicated or confusing, simplify. You will be able to see your path more clearly. There is no escaping the forward motion of change, but the more you try to add things to the situation to try and solve the problem, the worse things tend to get. Though we are to keep in mind that there is a difference between people and things, the rule is: more is more.

3. Time is the all-important critical factor in life.

Time is much like the weather: everyone talks about it but no one can do anything about it. The reality is regardless of your race, financial state, age, or just about any other factor everyone has 24 hours in a day. How you use those 24 hours will largely determine how your life ends up. Many people are so focused on the now that they don’t realize the “now” has just become part of their past and the future stands right before them.

4. Everything is about risk and reward.

Every decision we make involves taking some type of risk, so it requires us to weigh out if the risk is worth the potential reward. This doesn’t require a lot of education but does require you to pause and think before you act. For example, a man decides to rob a bank and he gets away with $50,000. Then he is caught and sentenced to 10 years in prison. The reward is hardly worth the risk because $50,000 divided by 10 is $5,000, an amount he could have made working for minimum wage, part time at McDonald’s. The actual reward ends up being far less than the -$5,000 because he loses 10 years of his life and probably won’t even be able to be hired at a McDonald’s making minimum wage.

5. When investing money remember the eternal triangle.

Risk and return are two sides of that triangle, with the third being cost. The more you invest in a stock or other financial instrument, the higher the expected return should be. This is something that is always true, so whether you are starting out investing with $1000 or $100,000 you need to manage the risk to the best of your ability. Decide what is your rate of return goal, then diversify your portfolio and spread your risk to minimize losses.

6. You don’t know everything.

Another way of putting this is that you need to be in a state of constant learning. Anyone who seriously invests a meaningful amount of money will be keeping track of that money on a regular basis. The stock market can go crazy, and if you are looking to continue investing then keeping abreast of the market becomes even more important. Ask yourself why so many people play the lottery. The reason is that it requires no knowledge investment on their part. Just check out how many people have won the lottery and are now barely getting by. Life is a constant learning process.

7. Do not underestimate anyone or anything.

Another way to put this is don’t overestimate yourself or your abilities. The fact is that there are people out there who are smarter, stronger, wealthier … you name it. The problem is most of the time you don’t know who they are, making every new person someone who potentially will be one up on you. To properly deal with this and avoid losses, acquire a fair amount of humility and give the proper respect to every new person you encounter.

8. Avoid reading too much into historical trends.

Bogle talked about this from a financial perspective, but it applies to our lives as well. Just because you haven’t won the lottery in 20 years even though you play it every day does not increase your chances of winning. Flip it over to life and just because you have been successful doesn’t mean you will continue to be. Turn this on its head and you move forward knowing that years of failing to meet your own expectations doesn’t mean it has to stay that way. You should pay attention to the trend and adjust your life accordingly, but don’t expect tomorrow to be the same as today.

9. The end of the day is not the end; the end is the end.

However your day ends up remember that there is always tomorrow. If tomorrow doesn’t come then the end has arrived. Until your reach that end point, keep living your life as normally as possible. Don’t get too high or too low because there is always tomorrow and things are likely to change.

10. Beware of averages.

From a mathematical viewpoint, the reasons averages exist is because they eventually will turn out to be right. On the other hand, an average is determined over a period of time, so if you’re riding high then continue the ride as long as possible because you don’t know when the low will hit and bring you down to the average. If you stop and think about it, it is possible to have a lower average because you didn’t maximize your highs.


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