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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.
Where I'm from, a millionaire is someone who owns a two bedroom condo.
Two bedroom condos is Silicon Valley
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.
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%.
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)