Have you ever attended a reception and found yourself engaged in mundane conversations until you stumbled upon a group of like-minded individuals? People who laugh and talk as if they’ve been friends forever. Well, guess what? That exact scenario happened to me! These individuals call themselves Bogleheads, named after John C. “Jack” Bogle, the founder of Vanguard Group and the pioneer of the index fund. His low-cost, buy-and-hold investment strategy has transformed regular investors into millionaires.
I recently discovered that I am a true Boglehead, even though I’ve followed Bogle and his investment philosophy for years. On my bookshelf sits a Bogle bobblehead, a token I received in exchange for the book, “The Bogleheads’ Guide to Investing.” Whenever I read news articles about Sam Bankman-Fried’s trial, the accused individual who allegedly defrauded customers and investors of billions of dollars through his collapsed cryptocurrency exchange FTX, I can’t help but think about Bogle and the Bogleheads.
Sam Bankman-Fried was one of the most enthusiastic promoters of cryptocurrency, which appeals to investors seeking quick wealth. They thrive on the excitement of taking risks and investing in speculative assets like crypto. In contrast, Bogle was a contrarian who challenged Wall Street and the investment community by advocating for cost-efficient index funds. Although stock pickers initially ridiculed his idea, index funds eventually dominated the investing world.
Bogle often emphasized that only a small percentage of individual stock-pickers can outperform the S&P 500 over the long term. He believed that index funds, which replicate market indexes, offer a more affordable way to build wealth. Bogle wanted investing to be simple and accessible to all.
Being a Boglehead is akin to embodying the tortoise in the children’s fable, “The Tortoise and the Hare.” As you may recall, the hare mocked the tortoise for its slow and steady approach to racing. The hare boasted about its speed and even took a nap due to overconfidence. However, the tortoise stayed focused, steadily making its way towards the finish line. And as the fable goes, you know what happened next.
Recently, my husband, two daughters, and I were invited to speak at a Bogleheads conference in Maryland, organized by the John C. Bogle Center for Financial Literacy. Next year, the conference will be held in Minneapolis. (Full disclosure: I own Vanguard mutual funds in my 401(k) plan and other investment portfolios.)
“Jack Bogle believed that every investor, including small investors, deserves a fair chance to earn returns from the market,” said Christine Benz, the president of the board of the John C. Bogle Center for Financial Literacy. “This conference aims to extend that legacy.”
Bogleheads are dedicated to helping people understand the importance of investing and attaining financial security. They embrace Bogle’s philosophy outlined in his book, “Enough: True Measures of Money, Business, and Life.” Bogle emphasized that not knowing what “enough” means undermines our professional integrity, turning investment advisors into salespeople.
This year, conference attendees could choose between the 101 track, which focused on investing fundamentals, and an advanced track covering topics like maximizing Social Security benefits, real estate investments, retirement portfolio structuring, and Roth conversions.
Although my children are excellent savers, they are hesitant about investing due to the volatility of the stock market. They’ve been resistant to reading investment books or articles that we’ve suggested. But after much persuasion, they finally agreed to discuss our family’s adoption of the Boglehead philosophy.
Let me tell you, my heart nearly burst with joy because something finally clicked for our girls, especially our oldest daughter, who is 28. While attending the panel discussions with investment experts, she started texting me. She, along with her sister and father, was sitting behind me.
Me: “Treasury Inflation Protected Securities. TIPs are designed to safeguard against inflation.”
Me: “Inflation Protection Bonds. They also provide a hedge against inflation. You see, inflation reduces the value of money as prices rise. If your money doesn’t keep up with inflation, you won’t have enough to afford necessary items like groceries or a car.”
Her: “Small cap, medium cap”
Me: “Small cap refers to small companies with the potential for significant growth, thus generating higher returns for investors. Mid-cap refers to medium-sized companies. Apple, for instance, started as a small-cap company and eventually became enormous.”
The flurry of one-word questions without question marks continued as she heard other investment terms mentioned by the speakers. While I answered one question, she whispered another query to her dad. Her younger sister, who is 23, leaned in to hear his explanations.
They were listening. They were engaged. Thanks to the Bogleheads, they became eager to learn and better-informed investors who understood the importance of patiently waiting to grow their wealth, while being content with having “enough.”
If you have personal finance questions for Washington Post columnist Michelle Singletary, feel free to call 1-855-ASK-POST (1-855-275-7678).
I recently paid off my mortgage in the spring of 2023 by making extra payments and taking advantage of a mortgage recast. Although it slightly lowered my perfect 850 credit score and sparked some debate among readers, it was one of the best financial decisions I’ve ever made.
If you’re in the habit of carrying credit card debt, it’s time to stop. Contrary to popular belief, carrying credit card debt won’t boost your credit score. If you’re looking to get out of credit card debt, consider a balance transfer.
For a comprehensive look at my timeless money advice, check out Michelle Singletary’s Money Milestones. It provides guidance for every stage of life, whether you’re just starting your career or planning for retirement.
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