John Bogle on the Future of Investing: The Rise of the Shareholders

[LowIQinvestor]

Found this article interesting...

 

Vanguard's Founder Sees Investors Demanding a Smaller, Simpler Financial System:

http://online.wsj.com/articles/john-bogle-on-the-future-of-investing-the-rise-of-the-shareholders-1404765274

[Guest longinvestor]

http://finance.yahoo.com/news/john-bogle-future-investing-rise-203400423.html

 

Same story, this works without a WSJ subscription.

 

I hope Bogle lives long enough to see much of the mutual fund industry approach his kind of fee structure. His vision will come true, hope he can see it happen. 

 

Biggest rip off in plain sight and a nation full of suckers. It is actually *&^%^ing unbelievable that trillions get usurped with so much evidence that it is all being pissed away. People seem to know how to shop bargains in everything else. Got to be because of the obfuscation by the beneficiaries.

[Uccmal]

I'll believe it when I see it.  My experience is that most people dont spend alot of time thinking about this.  It occurred to me 20 years ago that it was better to own the fund owner than any of their funds.  I have held IGM and Power Financial in some accounts for over 10 years. 

 

My parents have a financial advisor (i.e. fund salesperson) who manages their investments for them.  He is trustworthy, and generally upfront, but his goals are in direct conflict to theirs.  He gets a piece of the fund fee, every year.  Their returns are the market averages minus 2.5%.  My returns are well.. a little higher. 

 

To most people, saving money, on a new computer, is much more tangible.  We here on this board are certainly not most people. 

[Guest longinvestor]

I'll believe it when I see it.  My experience is that most people dont spend alot of time thinking about this.  It occurred to me 20 years ago that it was better to own the fund owner than any of their funds.  I have held IGM and Power Financial in some accounts for over 10 years. 

 

My parents have a financial advisor (i.e. fund salesperson) who manages their investments for them.  He is trustworthy, and generally upfront, but his goals are in direct conflict to theirs.  He gets a piece of the fund fee, every year.  Their returns are the market averages minus 2.5%.  My returns are well.. a little higher. 

 

To most people, saving money, on a new computer, is much more tangible.  We here on this board are certainly not most people.

 

Why I feel that I have a duty to tell folks that I know well. Will try at least. Unfortunately, most adults have to make up (have made up)their own minds. That is, what counts is their own experience versus someone else's. Experience comes after the experience, which with retirement is too late. Case in point, my B-in-L has been burnt by the market, brokers and advisors and is now all in T-bills. The pendulum for them has swung way over. Additional frugality has been forced upon them.

 

Been trying to capture 20-somethings' attention, those that I know have an open invitation to come to Omaha on the first Saturday of May, on my dime. Simple, right? Not. 

[rkbabang]

My parents have a financial advisor (i.e. fund salesperson) who manages their investments for them.  He is trustworthy, and generally upfront, but his goals are in direct conflict to theirs.

 

This is an important point.  Whenever someone's incentives are in direct contradiction to your own, you should not trust that person with anything which you value.  It doesn't matter one wit if he is a good and decent person, everyone will do what is in their own best interest. Any system or arrangement where someone else needs to go against his own best interest for you to benefit, will not work well for you.

 

Whenever I look at something that isn't working, whether it be a system (such as a government) or a professional arrangement (such as with a financial adviser) I ask myself what the incentives are for each person involved.  Usually the problem can be seen clearly from that point of view.  If the incentive are perverse in someway (i.e. requiring someone to do what isn't in his best interest to do) than the system or relationship can never be made to work.

 

[RichardGibbons]

If the incentive are perverse in someway (i.e. requiring someone to do what isn't in his best interest to do) than the system or relationship can never be made to work.

 

Hmm, OK, here's a perverse counterexample: parenting. Raising kids take up piles of money and time, yet I think many parent/child relationships work well.

[ukvalueinvestment]

Can you expand on that?

 

Surely parenting comes with an ROI - the happiness of seeing your kids grow up as well rounded individuals, successful in their own way?

[rkbabang]

If the incentive are perverse in someway (i.e. requiring someone to do what isn't in his best interest to do) than the system or relationship can never be made to work.

 

Hmm, OK, here's a perverse counterexample: parenting. Raising kids take up piles of money and time, yet I think many parent/child relationships work well.

 

I think you misunderstand what I am saying.  I want to raise my kids and I equate their well being with my own (I have been wired to think such through millions of years of evolution).  Now if you put me in a situation where society benefits only if I do some harm to my children, or even just put other people's kids above my own, the results will not be good (for society anyway).

 

[RichardGibbons]

Can you expand on that?

 

Surely parenting comes with an ROI - the happiness of seeing your kids grow up as well rounded individuals, successful in their own way?

 

Yes, but raising kids is a lot of work.  One could equally make the argument "surely helping people build their retirements comes with an ROI - the happiness of seeing your customers having a financially-secure retirement where they have the assets to realize their retirement dreams". 

 

Really, if you start looking at things from "intrinsic reward" incentives, then you've basically conceded rkbabang's argument anyway.  You could say that many politicians govern well because of the intrinsic rewards of improving their country and the well-being of their fellow citizens, which I think rkbabang wouldn't agree with at all.

 

Rkbabang, I think understand your position.  Parenting is a counterexample that refutes your rule, so you'll pretend that you and your kids are one entity instead of modifying your world view.  That said, I understand it.  If you concede that parents can act against their own best interests on behalf of their kids, then it's possible that other people might sometimes act against their own best interests as well.

 

(FWIW, I think you are mostly right that people usually act in their own best interests.  I just recoil against black and white world views.)

[rkbabang]

Can you expand on that?

 

Surely parenting comes with an ROI - the happiness of seeing your kids grow up as well rounded individuals, successful in their own way?

 

Yes, but raising kids is a lot of work.  One could equally make the argument "surely helping people build their retirements comes with an ROI - the happiness of seeing your customers having a financially-secure retirement where they have the assets to realize their retirement dreams". 

 

Really, if you start looking at things from "intrinsic reward" incentives, then you've basically conceded rkbabang's argument anyway.  You could say that many politicians govern well because of the intrinsic rewards of improving their country and the well-being of their fellow citizens, which I think rkbabang wouldn't agree with at all.

 

Rkbabang, I think understand your position.  Parenting is a counterexample that refutes your rule, so you'll pretend that you and your kids are one entity instead of modifying your world view.  That said, I understand it.  If you concede that parents can act against their own best interests on behalf of their kids, then it's possible that other people might sometimes act against their own best interests as well.

 

(FWIW, I think you are mostly right that people usually act in their own best interests.  I just recoil against black and white world views.)

 

It isn't black and white, nothing ever is. There are 99.99999% of politicians and then there is Ron Paul, there are parents who give away or even kill their kids, and yes, there are probably good financial advisers who put their clients' interests before their own.  But you are refusing to accept that sometimes there are general rules that apply almost universally.  Also, I don't think the parenting thing was a cop out.  There has not been millions of years of evolution to make human beings want to help others with their retirement savings.

[oddballstocks]

Can you expand on that?

 

Surely parenting comes with an ROI - the happiness of seeing your kids grow up as well rounded individuals, successful in their own way?

 

Yes, but raising kids is a lot of work.  One could equally make the argument "surely helping people build their retirements comes with an ROI - the happiness of seeing your customers having a financially-secure retirement where they have the assets to realize their retirement dreams". 

 

Really, if you start looking at things from "intrinsic reward" incentives, then you've basically conceded rkbabang's argument anyway.  You could say that many politicians govern well because of the intrinsic rewards of improving their country and the well-being of their fellow citizens, which I think rkbabang wouldn't agree with at all.

 

...

 

I've come to a conclusion that EVERYTHING is hard work.  At least if you want to do it well and do it right.  You can be a lazy parent, but even a lazy parent requires work.  And your kids turn out poorly.  You can be a lazy employee, but it's still work.  It's harder to work on not working than it is to do the real work sometimes.  A good marriage is hard, good finances are hard, even taking a good vacation is hard.

 

That doesn't mean we shouldn't do it.  Sometimes the hard work creates results infinitely better than the effort put in.  Tackling something new and complex can be character building.  In the case of parenting it there isn't a silver bullet, or special technique that makes things right.  It's being a role model and working with your kids daily that generates well adjusted adults.

 

Maybe others have had a different experience.  I only know one person who was given everything on a silver platter, and the same things that are hard for me (family, marriage, work) are hard for him as well.  Money and family connections don't solve those things, if anything they might complicate it even more.

[RichardGibbons]

Yeah, I think that's a reasonable point of view, oddball.  In a way, even if your life is "easy", there are stressors.  Plus, you become accustomed to and bored with what you have.

 

Frankly, I think work is much better when you're working than when you're at work but not working....

[rkbabang]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

[RichardGibbons]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

Ok, this argument isn't even in the realm of making sense.  The form of your argument is, "to survive, you must eat.  Therefore, eating anything (cyanide, stop signs, airplanes, babies) is generally a good idea". 

 

The thing that amuses me the most is that you're one of the more right-wing people on the board, but this really sounds like an argument the pigs would make in "Animal Farm".

 

I also disagree with the premise that there's no way to get what you want without hard work.  It sounds like a very bleak life.  I think maybe you want very different things that me.

[rkbabang]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

Ok, this argument isn't even in the realm of making sense.  The form of your argument is, "to survive, you must eat.  Therefore, eating anything (cyanide, stop signs, airplanes, babies) is generally a good idea". 

 

The thing that amuses me the most is that you're one of the more right-wing people on the board, but this really sounds like an argument the pigs would make in "Animal Farm".

 

I also disagree with the premise that there's no way to get what you want without hard work.  It sounds like a very bleak life.  I think maybe you want very different things that me.

 

I think we are completely talking past one another here, so I'll end it.  I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board".  I don't believe in borders, I'm not religious, I'm not racists, nor homophobic.  I think all drugs should be legal and sold over the counter, and I agree with Rosie O'Donnel when she said soldiers are murderers and terrorists.  I'd love to see G.W. Bush and Obama convicted as mass murderers.  There aren't many things I would find insulting, but being called a right winger is one of them.

 

[wachtwoord]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

Ok, this argument isn't even in the realm of making sense.  The form of your argument is, "to survive, you must eat.  Therefore, eating anything (cyanide, stop signs, airplanes, babies) is generally a good idea". 

 

The thing that amuses me the most is that you're one of the more right-wing people on the board, but this really sounds like an argument the pigs would make in "Animal Farm".

 

I also disagree with the premise that there's no way to get what you want without hard work.  It sounds like a very bleak life.  I think maybe you want very different things that me.

 

I think we are completely talking past one another here, so I'll end it.  I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board".  I don't believe in borders, I'm not religious, I'm not racists, nor homophobic.  I think all drugs should be legal and sold over the counter, and I agree with Rosie O'Donnel when she said soldiers are murderers and terrorists.  I'd love to see G.W. Bush and Obama convicted as mass murderers.  There aren't many things I would find insulting, but being called a right winger is one of them.

 

I agree with all those things above and I would still prefer to be called a right winger over a left winger every day of the week and twice on Sunday. Also make sure you realize left and right (besides being one-dimensional and therefore highly inadequate to quality the complicated political landscape) is highly context specific. What is left in one place is right in the other.

 

Finally I'll confess to being a Libertarian. Everyone in my country would call that extreme right. ;)

[RichardGibbons]

I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board". 

 

Yeah, you're right.  Sorry.  That wasn't a fair way to characterize you at all. 

 

My mental model of why someone becomes right wing and why someone becomes left wing has been in flux for the past few months. As a side-effect of that, I used an incorrect heuristic.

 

Sorry.

 

[rkbabang]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

Ok, this argument isn't even in the realm of making sense.  The form of your argument is, "to survive, you must eat.  Therefore, eating anything (cyanide, stop signs, airplanes, babies) is generally a good idea". 

 

The thing that amuses me the most is that you're one of the more right-wing people on the board, but this really sounds like an argument the pigs would make in "Animal Farm".

 

I also disagree with the premise that there's no way to get what you want without hard work.  It sounds like a very bleak life.  I think maybe you want very different things that me.

 

I think we are completely talking past one another here, so I'll end it.  I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board".  I don't believe in borders, I'm not religious, I'm not racists, nor homophobic.  I think all drugs should be legal and sold over the counter, and I agree with Rosie O'Donnel when she said soldiers are murderers and terrorists.  I'd love to see G.W. Bush and Obama convicted as mass murderers.  There aren't many things I would find insulting, but being called a right winger is one of them.

 

I agree with all those things above and I would still prefer to be called a right winger over a left winger every day of the week and twice on Sunday. Also make sure you realize left and right (besides being one-dimensional and therefore highly inadequate to quality the complicated political landscape) is highly context specific. What is left in one place is right in the other.

 

Finally I'll confess to being a Libertarian. Everyone in my country would call that extreme right. ;)

 

I don't particularly like "left wing" either, but I guess I prefer it to right wing.  I like libertarian, but I find most libertarians are still statists, so that doesn't quite fit me either.

Maybe "extreme libertarian", Anarcho-capitalist, or just anti-state.  I find that libertarians are only labeled right-wing by leftists, but are usually labeled left-wing by conservatives.

 

[rkbabang]

I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board". 

 

Yeah, you're right.  Sorry.  That wasn't a fair way to characterize you at all. 

 

My mental model of why someone becomes right wing and why someone becomes left wing has been in flux for the past few months. As a side-effect of that, I used an incorrect heuristic.

 

Sorry.

 

 

No problem.

[wachtwoord]

Whether it be your employment, your property, your hobbies, your money, or your family, there is usually no way to get what you want in life without hard work.  So contrary to your theory that raising children is not in a person's best interest simply because it entails effort, as every successful person knows intuitively, hard work usually is in your best interest.

 

Ok, this argument isn't even in the realm of making sense.  The form of your argument is, "to survive, you must eat.  Therefore, eating anything (cyanide, stop signs, airplanes, babies) is generally a good idea". 

 

The thing that amuses me the most is that you're one of the more right-wing people on the board, but this really sounds like an argument the pigs would make in "Animal Farm".

 

I also disagree with the premise that there's no way to get what you want without hard work.  It sounds like a very bleak life.  I think maybe you want very different things that me.

 

I think we are completely talking past one another here, so I'll end it.  I do want to clear up one thing though since you accused me of being something I detest.  I am not even close to being a right winger at all, never mind the one of the "more right-wing people on the board".  I don't believe in borders, I'm not religious, I'm not racists, nor homophobic.  I think all drugs should be legal and sold over the counter, and I agree with Rosie O'Donnel when she said soldiers are murderers and terrorists.  I'd love to see G.W. Bush and Obama convicted as mass murderers.  There aren't many things I would find insulting, but being called a right winger is one of them.

 

I agree with all those things above and I would still prefer to be called a right winger over a left winger every day of the week and twice on Sunday. Also make sure you realize left and right (besides being one-dimensional and therefore highly inadequate to quality the complicated political landscape) is highly context specific. What is left in one place is right in the other.

 

Finally I'll confess to being a Libertarian. Everyone in my country would call that extreme right. ;)

 

I don't particularly like "left wing" either, but I guess I prefer it to right wing.  I like libertarian, but I find most libertarians are still statists, so that doesn't quite fit me either.

Maybe "extreme libertarian", Anarcho-capitalist, or just anti-state.  I find that libertarians are only labeled right-wing by leftists, but are usually labeled left-wing by conservatives.

 

True Libertarians are waiting for the end of the archaic concept of a nation state  ;)

[rkbabang]

True Libertarians are waiting for the end of the archaic concept of a nation state  ;)

 

Yes, but unfortunately for us alive today, cultural evolution can move pretty slowly.  Look how long it is taking religion to die.  I think religion will be dead and buried once and for all long before the state even starts to decline.

 

[wachtwoord]

True Libertarians are waiting for the end of the archaic concept of a nation state  ;)

 

Yes, but unfortunately for us alive today, cultural evolution can move pretty slowly.  Look how long it is taking religion to die.  I think religion will be dead and buried once and for all long before the state even starts to decline.

 

I think it's the other way around. Chance of religion dying within 100 years is 0  while the demise of the nation state model might start within the 100 years.

[rkbabang]

True Libertarians are waiting for the end of the archaic concept of a nation state  ;)

 

Yes, but unfortunately for us alive today, cultural evolution can move pretty slowly.  Look how long it is taking religion to die.  I think religion will be dead and buried once and for all long before the state even starts to decline.

 

I think it's the other way around. Chance of religion dying within 100 years is 0  while the demise of the nation state model might start within the 100 years.

 

I hope you are correct, as currently the state does more harm.  I don't mind religion as much as long as it is doesn't get organised and powerful again.