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Jack Bogle, the Man Who Revolutionized Investing, Dies At 89 (marketwatch.com)
Thelasko shares a report from MarketWatch: You can thank Thomas Edison for the light bulb casting light in your home, Henry Ford for your affordable, mass-produced car, and Apple's Steve Jobs for the astonishing computer in your pocket. And Jack Bogle, who died Wednesday [at the age of 89]. The low-cost mutual funds he helped pioneer at Vanguard aren't as sexy or dramatic as other inventions. And you can't really touch or see them. But their effect on everyday lives has been enormous. Bogle's low-cost index funds, and the imitators they have inspired, may have saved ordinary Main Street Americans a staggering $250 billion, or more, in mutual fund fees over the last forty years. According to the Investment Company Institute (ICI), there are now about 450 index mutual funds with around $3.4 trillion in assets. There are also 1,800 exchange-traded funds, also with around $3.4 trillion in assets.
He didn't invent shit. Pocket computers existed years before the iphone.
But, still wondering, at what point the Index funds could be gamed?
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
If you are one of those fund managers who makes massive fees, you won't be thanking him. Curiously these index funds exploit the efficiency of the market created by traders and actively traded funds and reduce it by creating vast category of new investors that don't contribute to the valuation effort.
My hypothesis is that a secondary effect of them is to improve the performance of those who are prepared to research. The tertiary effect is that people drift back to actively managed funds. The net effect is that the market achieves balance, not only between those who buy and sell, but also between those who spend time and money trying to value the market and those who can't be arsed.
Boring, low-cost mutual funds like the Vanguard funds are how about 10 million Americans have become millionaires. Mustn't they've held Vanguard or similar funds inside their 401K or other retirement plan. That's most millionaires.
Other interesting facts about millionaires:
33% of millionaires never made $100,000 in any year.
Most made less than $150K.
Millionaires are no more likely than the average American to have received any inheritance. (21% f people, and 21% of millionaires, inherit any money).
Less than 1% of millionaires made most of their money in one year, from a particular event. 99% consistently invested over the long term.
Most commonly held jobs of millionaires:
Engineer
Accountant
Teacher
88% of millionaires have a bachelor's degree, 52% have a graduate degree. About half are first time graduates - their parents didn't have a degree.
Of those will have a degree, most went to state schools rather than private schools, and 68% worked their way through school rather than taking out loans.
Keep chirping about trump, aspie
Exactly how was he responsible for that? He offered a simpler product, at lower cost, to people that were losing other investment and retirement options for reasons he had no control over (the death of pensions). Nobody was forced to use his products. I agree the state of the American retirement system has gone downhill, but you can hardly blame him for making the slower shallower.
$_ = "wftedskaebjgdpjgidbsmnjgcdwatb"; tr/a-z/oh, turtleneck Phrase Jar!/; print
Where I'm from, a millionaire is someone who owns a two bedroom condo.
Two bedroom condos is Silicon Valley
I have to agree. Looking at income mobility data and the industries and circumstances that are producing NEW millionaires makes the point crystal clear. For example, you don't need to benefit from an inheritance to realizes benefits from having a rich (or even richer-than-average) family. Also, the distribution of those who tend to accumulate wealth is massively skewed. So while you MAY be one of the lucky ones to not have their entire portfolio dissolve when the next financial crises occurs, your path to being rich is still poor, by the standards of the truly wealthy.
Yeah, but being a millionaire means very little now, you own your own home and little more. Yeah there are plenty of people who don't but you are by no means rich.
Also although actively managed funds are a rip off they charge you for their "expert" knowledge but generally under perform the market, and charge you a percentage of what you invested. To be fair they should charge a percentage of what they earn't over the market average (how you would expect monkeys to perform), and if they are below give you the same percentage back.
Still the cost of passive funds is to high what exactly do they need to do apart from setup the index and get a computer to buy the stock, it should be cents to invest with no ongoing fee. But fund managers/bankers make real fortunes just moving peoples money around and they like it that way.
The data indicates that having typical middle-class parents raise you, driving to Starbucks in a car loan does tend correlate with the kids doing the same thing. So there is a correlation there - up to typical middle class status.
Those who do a lot better, millionaires and multi-millionaires, do *not* tend have rich parents, in fact the opposite is true. Multi-millionaires tend strongly to be people who budget and save, and that correlates with *lower* than average income of their parents when they grew up. Those who grow up with upper middle class parents tend to hand out money freely to Starbucks and Apple, and end up in debt or with little wealth. 80% of millionaires came from families that are middle class or lower.
Let's look at the mega-rich you mentioned. The Forbes 400 is perhaps the best known and best research list of the wealthiest Americans. Of the super-rich (Forbes 400), more had poor parents than had parents that were super rich. Most of these mega-rich built on what their parents or other family members had done. Fred was a millionaire, his son Donald is a billionaire (and a fuckwad).
One thing the mega rich tend to have in common in that they most often don't have hobbies they are passionate about, close friends, or much else other than money; they have focused on building their business empire and sacrificed other things. That's why I don't want to try to be mega rich. I'm good with $2 million, which doesn't require giving up time with my family - I just drink coffee at home with family rather than at Starbucks.
Most millionaires were created by inflation. The process by which the banksters steal money from the elderly, basically depreciating their assets, whilst the bankster manipulate funds to promote inflation and generate income based upon that inflation.
Chaos - everything, everywhere, everywhen
For the last 100 years investing an (inflation-adjusted) $5000 per year into the S&P 500 yields between ~$768,000 and $2.2 million (in inflation-adjusted dollars) after 40 years, on average. So tell me how putting a few thousand per year into the stock market won't make me rich?
Mostly this just illustrates the shifting definition of being a millionaire. The still most common definition is someone with a million dollars in assets, but as you have pointed out that is no longer a significant amount of money. It represents about $30-40k per year in retirement income (increasing with inflation). But the term is more frequently being used to describe someone who consistently makes $1 million per year in income. This requires either a very high paying job or over $25 million in assets. It probably won't be long until the latter definition is more common, because it more accurately reflects what people have in mind when using the term millionaire.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
To my mind, borrowing a million dollars doesn't make you a millionaire, it just makes you in debt. So the definition uses for the figures above is *net worth*. That is, what you own minus what you owe. The figures I provided are people with a net worth of *at least* a million dollars. The average is about $2.5-$3 million, I don't recall exactly.
For most millionaires that simply comes down to what's in their 401K or IRA. They've paid off their mortgage and bought their car three years ago with cash, typically.
Call it what you will, this is the process used by over 80% of people who have at least a million dollars:
Typical salary $59,000.
Invest 15%* in boring ass index mutual funds for 25 years and you've got a million dollars.
Very simple, very boring, very effective.
* Employer match averages 5% with the worker investing 10%.
> It represents about $30-40k per year in retirement income (increasing with inflation).
Long term average market return is about 10% minus average inflation is 3.2%. Annual return without depleting your nest egg = $68,000.
It turns out that returns tend to be higher in years that inflation is higher and lower during periods of low inflation, so the real return (net of inflation) is more stable than you might think.
Put part of your money in safer, less volatile investments like bonds (not bond funds) and money market funds and you can easily figure on $50,000.
When average life span was 72, somebody 60 years old had a pretty short investment horizon, so they'd have more than half their money in bonds. These days, even a 70 year old plans for 15 years out, so more stocks makes sense. If you invested for 20-30 years while working, you've got a million so significant drop one year would just mean you spend $30,000 of the principal that year and your kids only get $970,000 when you die. Oh well.
Somebody who has saved up over a million dollars is probably not someone who is going to spend every penny of their investment income as soon as they hit retirement. Having an income of $60,000 doesn't mean you spend $60,000 every year (that's a habit broke people have - spend all of their income or a little more, like I've done before).
So yeah, you probably wouldn't want to spend $60,000 - that doesn't mean your income isn't $60,000. It just means you decided not to spend 100% of your income.
But just for fun, pretend you had zero rate of return for twenty years of retirement, which has never happened in the US, and you decided to spend $50,000 every year even with zero income. You've STILL got money to do that for twenty years. You'd end up not leaving anything to your kids, if in fact your retirement was a 20-year recession.
I wouldn't PLAN to spend my principal most years, but if you've got $1,000,000 at age 55 and $900,000 at age 65, you're still quite okay. You certainly CAN stabilize your income and allow your principal to go up and down a bit with the market.
Edison stole his invention, exploiting America's refusal to recognize intellectual property rights in other countries. So did many U.S. "inventors".
Ford was not the first to make cars, or even to make affordable cars. Ford was merely the best at getting his name touted.
Steve Jobs?? Bwahahaha! The least competent narcissist on the planet? He invented nothing. Nor did Apple come up with portable or handheld computers. Apple were late in the game and overpriced.
Don't revise history, just to pump up the obituary of someone. It makes a mockery of whatever they actually achieved.
Applaud REAL achievements.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
and then it's time to die. A million bucks probably not even enough to die with dignity after healthcare expenses
there is a no fee index fund, and I guess you could create your own with one of the no-fee startups
That particular example doesn't matter, I don't have a horse in that race.
I will note that you can't estimate the value of the company based on how many apartments they had - you have to subtract the mortgages on those apartment buildings. If the company buys a building for $20 million (because the competing bidder only offered $17 million), using a mortgage of $17 million, the value of the company is somewhere between $0 and $3 million. $20M asset - $17M loan against it = $3M value.
Also note that Donald Trump was the president of the company in 1973, so it wouldn't be accurate to choose that as the "before Donald" valuation.
But again that's because the point. The point is, of the ultra rich:
More ultra-rich had broke parents than had ultra-rich parents.
Most ultra-rich people started with a business their family had and grew it.
Which again is kinda beside the main point, because I don't think many of us want to be obsessive about money, which seems to be key to becoming ultra-rich. We want to be comfortable, money-smart without being totally money focused.
Trump is the first common-sense patriotic President since Reagan. He's setting up conditions that allow the country to recover, and that's driving traitors like you crazy.
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You pulled that number out of your rear. About 4% of Americans are millionaires, and many of those who aren't now, will be as they grow older. In all likelihood, more millionaires are long-term investors than not.
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