The Man Who Founded Vanguard And His 7 Investing Principles

This is Jack Bogle.

The founder of $7 trillion asset management company Vanguard.

He's practically the reason why index funds exist.

Here are the 7 investing principles he used to build this empire:

1 – Reversion To The Mean

Bogle believes that investments usually return to their historical averages.

He claims you shouldn’t focus too much on recent performance.

Everything averages out.

2 – Compound Interest

Jack preaches the importance of compound interest.

At 7% interest, money doubles every 10 years.

Leverage compound interest and watch yourself get rich.

3 – Buy Right & Hold Tight

The Vanguard founder says you should buy great investments and hold on.

Holding assets is a rollercoaster, make sure your emotions can handle it.

4 – Diversify

Jack says to forget the needle and buy the entire haystack.

Your winners will overperform your losers in the long run.

Most investors aren't equipped for active investing.

Passively buy the whole market instead.

5 – Minimize The Croupier's Take

Investing has hidden fees many investors fail to see.

Whether it's taxes, spreads, commissions, management fees, etc.

Jack suggests index funds over actively managed stock funds for this exact reason.

6 – You Can't Escape Risk

You can't avoid risk, you can only mitigate it.

Accept that risk will always exist, and invest anyway.

Alternatively, you can let your cash sit in the bank and erode in value.

There's no risk at the bank – a loss of purchasing power is guaranteed.

7 – Stay On Course

The best-kept secret of investing is that there is no secret.

It requires discipline, patience, emotional intelligence, and due diligence.

But it also requires the most uncommon gift of all – common sense..

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