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The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions
The index fund was just one innovation fueled by The Vanguard Group founder Jack Bogle's radical idea in 1975 to make investors the actual owners of his new fund company. The end result was powerful: a fund company for the people and by the people. But Bogle's impact and this great cost migration reaches well beyond index funds into many other areas, such as active management, ETFs, the advisory world, quantitative investing, ESG, behavioral finance, and even trading platforms. The Bogle Effect takes listeners through each of these worlds to show how they--and the investors they serve--are being reshaped and reformed. While hundreds of fund providers have copied the index fund that Vanguard made popular no one is yet to copy its mutual ownership structure. Why? This book explores what made Bogle such an anomaly--seemingly immune to the overwhelming magnet of ambition that dictates Wall Street. The Bogle Effect is animated by the author's hours of one-on-one, exclusive interviews with Bogle in the years before he passed, which reveal his philosophy, vision, intellect, and humor.
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Published April 26, 2022
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Displaying 1 - 29 of 29 reviews
December 23, 2022
Topic: would give 10 stars if I could. Hard to argue that anyone has been more of a disruptor, innovator, contrarian or force for good in American investing than John Bogle…literally saving Americans over a trillion dollar in fees. The low fee movement also was far from inevitable.
Book: knocked off 1 star because it was a bit dry, disorganized, and too long in places. But still well-researched, fairly balanced and educational. Liked the acknowledgement at the end that the Bogle Effect has only reached the half of Americans who own stocks and thus we have work to do to create more paths to wealth creation for all.
Audiobook: truly terrible. Maybe the worst I’ve ever listened to. The narrator reads all the numbers in each tables aloud (and there are a lot of tables…at least 30 minutes in total worth of table reading). Just why?
Interesting facts:
- Vanguard makes of 29% market share of US fund assets but only 5% of the industry’s revenue due to low fees
- The idea for indexing stemmed from Bogle’s Princeton senior thesis!!
- The invention of the “mutual ownership structure” was more critical to Vanguard’s success than indexing
Favorite Bogle quote:
- “The first sign that Vanguard’s mission has created a better world for the investor will be when our market share begins to erode.”
Book: knocked off 1 star because it was a bit dry, disorganized, and too long in places. But still well-researched, fairly balanced and educational. Liked the acknowledgement at the end that the Bogle Effect has only reached the half of Americans who own stocks and thus we have work to do to create more paths to wealth creation for all.
Audiobook: truly terrible. Maybe the worst I’ve ever listened to. The narrator reads all the numbers in each tables aloud (and there are a lot of tables…at least 30 minutes in total worth of table reading). Just why?
Interesting facts:
- Vanguard makes of 29% market share of US fund assets but only 5% of the industry’s revenue due to low fees
- The idea for indexing stemmed from Bogle’s Princeton senior thesis!!
- The invention of the “mutual ownership structure” was more critical to Vanguard’s success than indexing
Favorite Bogle quote:
- “The first sign that Vanguard’s mission has created a better world for the investor will be when our market share begins to erode.”
September 14, 2024
It’s an educational read and hits on various important topics but (in my humble opinion) it was kind of repetitive and I had a hard time wanting to finish it.
October 19, 2022
No man has done more for retail investors than Jack Bogle, yet it is other people in the finance industry, such as Warren Buffett, that get more attention and praise. Perhaps this is because WB is one of the richest investors of all time and people aspire to accumulate wealth like him. While Warren Buffett got rich alongside investors, Bogle sacrificed huge riches for the sake of retail investors. He passed a life of relatively huge fame and fortune to lower fees for the everyday person and develop a surefire way for them to build wealth through the index fund. It is for this reason that all market participants should read about Bogle and I think this a great place to start.
Want to read
July 27, 2022John Nash
December 4, 2023
I got a bit tricked by this one, but I don’t mind.
This bills itself as – and starts out as – the biography of Jack Bogle, founder of the Vanguard financial group. By the time it’s over, it’s less about his life than about his philosophy of investing and how it transformed (and continues to transform) the industry. We finish learning the outlines of Bogle’s life early here, but we continue to get his insights and arguments throughout.
Balchunas tells us he’s not setting out to write a hagiography, and I think he does a nice job of balancing different perspectives, but you can see why he’s tempted to give us the life of St. Jack.
For those who don’t know – and I suspect that will be a shrinking number as the decades go past – Bogle combined two ideas to create a new product, which became the largest financial product in the world. First – and more importantly according to Balchunas – he took the structure of the mutual fund, in which investors owned not just the shares they bought but the company doing that buying. Second, he applied the concept of the index fund, in which a large fund buys proportionate shares of every company in the index.
Balchunas tells us how that started as a bit of an F-you to the bosses of the company that fired him, not realizing that – while he didn’t work for them anymore – he retained control of some of the company’s funds. In the conflict he had with them, he put forward the revised structure that became Vanguard and that allowed him to divert profits that would have gone to the firm back to the investors in the form of reduced transaction and administrative costs.
The result was a virtuous cycle. The more customers Bogle attracted with his lower costs, the more he could lower the costs. In an industry that once had no real competition – at least not competition geared toward lowering costs rather than promising larger returns – it changed everything.
Balchunas shows that, while more of that story was accidental than Bogle later asserted, the result was the same. Siding with many of the top academic economists in the country, he became convinced that that the key to profitability was those lower costs. The average managed fund turns out to beat the market average only about a fifth of the time – and it’s different funds that do it each year. If you can find a way to get that “average” year after year, then you’ll do better not just than 80 percent of the others but than almost anyone with long-term exposure to the market.
Bogle produced data and charts showing how even a difference as small as half-a-percentage point in fee costs could double an investor’s profits over the course of decades. By forcing lower costs – through economies of scale, discouraging active trading, and relying on the theory of the efficient market pricing philosophy underlying the index fund strategy – he generated staggering savings. Balchunas estimates the cost at $1.5 trillion! It’s arguably the greatest transfer of wealth in history – money that would have gone to financial services corporations if, in the absence of his work, the economy had grown as it has.
I kept thinking of my own metaphors as I read. My favorite is that Vanguard is, effectively, the Wikipedia of financial services. Wikipedia is one of the most visited sites on the net, but no one owns it. You couldn’t start anything like it today because who would pay for it. But, at a crucial moment, Jimmy Wales and his team had a vision on behalf of all of us rather than for their own profit. Monetized in a selfish way, either would mean fortunes for a handful of owners. Shared with the world as they are, they mean increased wealth for everyone else.
Balchunas generally writes well. I confess to a bit of irritation at his habit of slapping quotes in the middle of a paragraph rather than weaving them into his narrative. I confess as well that it can be frustrating to “read” some of his charts on the audiobook.
As a bottom line, though, I found my mind stretched, and I was impressed with myself (through his tutelage) for understanding some of the contemporary debates about indexing getting too large and the parallel role of ETF’s.
I learned a lot here, even if less of it than I imagined was about Bogle himself.
This bills itself as – and starts out as – the biography of Jack Bogle, founder of the Vanguard financial group. By the time it’s over, it’s less about his life than about his philosophy of investing and how it transformed (and continues to transform) the industry. We finish learning the outlines of Bogle’s life early here, but we continue to get his insights and arguments throughout.
Balchunas tells us he’s not setting out to write a hagiography, and I think he does a nice job of balancing different perspectives, but you can see why he’s tempted to give us the life of St. Jack.
For those who don’t know – and I suspect that will be a shrinking number as the decades go past – Bogle combined two ideas to create a new product, which became the largest financial product in the world. First – and more importantly according to Balchunas – he took the structure of the mutual fund, in which investors owned not just the shares they bought but the company doing that buying. Second, he applied the concept of the index fund, in which a large fund buys proportionate shares of every company in the index.
Balchunas tells us how that started as a bit of an F-you to the bosses of the company that fired him, not realizing that – while he didn’t work for them anymore – he retained control of some of the company’s funds. In the conflict he had with them, he put forward the revised structure that became Vanguard and that allowed him to divert profits that would have gone to the firm back to the investors in the form of reduced transaction and administrative costs.
The result was a virtuous cycle. The more customers Bogle attracted with his lower costs, the more he could lower the costs. In an industry that once had no real competition – at least not competition geared toward lowering costs rather than promising larger returns – it changed everything.
Balchunas shows that, while more of that story was accidental than Bogle later asserted, the result was the same. Siding with many of the top academic economists in the country, he became convinced that that the key to profitability was those lower costs. The average managed fund turns out to beat the market average only about a fifth of the time – and it’s different funds that do it each year. If you can find a way to get that “average” year after year, then you’ll do better not just than 80 percent of the others but than almost anyone with long-term exposure to the market.
Bogle produced data and charts showing how even a difference as small as half-a-percentage point in fee costs could double an investor’s profits over the course of decades. By forcing lower costs – through economies of scale, discouraging active trading, and relying on the theory of the efficient market pricing philosophy underlying the index fund strategy – he generated staggering savings. Balchunas estimates the cost at $1.5 trillion! It’s arguably the greatest transfer of wealth in history – money that would have gone to financial services corporations if, in the absence of his work, the economy had grown as it has.
I kept thinking of my own metaphors as I read. My favorite is that Vanguard is, effectively, the Wikipedia of financial services. Wikipedia is one of the most visited sites on the net, but no one owns it. You couldn’t start anything like it today because who would pay for it. But, at a crucial moment, Jimmy Wales and his team had a vision on behalf of all of us rather than for their own profit. Monetized in a selfish way, either would mean fortunes for a handful of owners. Shared with the world as they are, they mean increased wealth for everyone else.
Balchunas generally writes well. I confess to a bit of irritation at his habit of slapping quotes in the middle of a paragraph rather than weaving them into his narrative. I confess as well that it can be frustrating to “read” some of his charts on the audiobook.
As a bottom line, though, I found my mind stretched, and I was impressed with myself (through his tutelage) for understanding some of the contemporary debates about indexing getting too large and the parallel role of ETF’s.
I learned a lot here, even if less of it than I imagined was about Bogle himself.
February 17, 2023
Eric Balchunas does an outstanding job explaining to his readers who John Bogle is and why he matters. If you know the Bogle name, you should read this book. If you have money in a 401k, 403b, a brokerage account or any other investment, you should read this book.
Jack Bogle was an insider who thought, and acted, like an outsider in the Wall Street world, and we are all better off for it. I'm personally fortunate to have been introduced to Vanguard and its low cost index funds back in 1990 and I'm still with them now. But you don't have to be a Vanguard customer or even own shares in a Vanguard fund, to benefit from what Bogle accomplished.
Nearly on his own and in defiance of the status quo, Bogle created the entire index fund business from scratch. He stood up for the retail investor when there was no reason to do so, and every incentive for him not to. While he wasn't a perfect person by any means, or always right in everything he did, his mission to lower costs for everyone else has done more to save the small investor money than any other person in the financial industry, bar none.
Balchunas did a heck of a good job researching his subject and he tells an exciting story, at least as exciting as a data-driven financial book can be. Be prepared for charts and graphs and numbers, but far from stultifying, the driving force of the story is Jack Bogle himself, an irritating man, a generous man, and one to whom many of us owe a debt of gratitude. This book explains why. Read it.
Jack Bogle was an insider who thought, and acted, like an outsider in the Wall Street world, and we are all better off for it. I'm personally fortunate to have been introduced to Vanguard and its low cost index funds back in 1990 and I'm still with them now. But you don't have to be a Vanguard customer or even own shares in a Vanguard fund, to benefit from what Bogle accomplished.
Nearly on his own and in defiance of the status quo, Bogle created the entire index fund business from scratch. He stood up for the retail investor when there was no reason to do so, and every incentive for him not to. While he wasn't a perfect person by any means, or always right in everything he did, his mission to lower costs for everyone else has done more to save the small investor money than any other person in the financial industry, bar none.
Balchunas did a heck of a good job researching his subject and he tells an exciting story, at least as exciting as a data-driven financial book can be. Be prepared for charts and graphs and numbers, but far from stultifying, the driving force of the story is Jack Bogle himself, an irritating man, a generous man, and one to whom many of us owe a debt of gratitude. This book explains why. Read it.
June 26, 2022
สำหรับผมแล้ว Jack Bogle คือนักลงทุนต้นแบบของผม แน่นอนว่าผมไม่ได้ลงทุนใน Index Fund เพียงอย่างเดียว แต่วิธีการที่ ลุง Jack เสนอมาตั้งแต่ปี 1975 นั้น มันเรียบง่าย สวยงาม และโคตรจะมีประสิทธิภาพเลยต่อคนทุกคนที่อยากนำเงินที่เก็บออมมาไปลงทุนให้เกิดผลงอกเงยจนนำไปสู่ปลายทางคือการมีอิสรภาพทางการเงินได้อย่างสบายใจและมีความกังวลไม่มากนัก
วิธีจริง ๆ นั้นง่ายมากครับ ลงทุนในกองทุนอิงดัชนีค่าธรรมเนียมต่ำในประเทศที่มีเศรษฐกิจที่เป็นตลาดเศรษฐกิจที่เจริญแล้ว และถือมันไว้ตลอดชีวิต และง่ายที่สุดก็คือ ซื้อถัวเฉลี่ยทุกเดือน และทำไปตลอดชีวิต และที่สำคัญเลิกเปิดดู port การลงทุนไปเลยก็ได้ ทำแค่นี้จนถึงวัยเกษียณ (ผมสมมติว่าคุณลงทุนทุกเดือนด้วยเงิน 10,000 บาทเป็นเวลา 30 ปี นะ) ถ้าคุณมีวินัยมากพอนะ เชื่อเถอะครับ วันที่คุณเกษียณ คุณสามารถมีได้ก็ประมาณ 10 กว่าล้านบาทได้
มันง่ายแค่นี้แหละครับ สำหรับการเป็นนักลงทุนแบบ Passive Index Investor และศาสดาของการลงทุนในรูปแบบนี้ก็คือ John C. Bogle ครับ
วิธีจริง ๆ นั้นง่ายมากครับ ลงทุนในกองทุนอิงดัชนีค่าธรรมเนียมต่ำในประเทศที่มีเศรษฐกิจที่เป็นตลาดเศรษฐกิจที่เจริญแล้ว และถือมันไว้ตลอดชีวิต และง่ายที่สุดก็คือ ซื้อถัวเฉลี่ยทุกเดือน และทำไปตลอดชีวิต และที่สำคัญเลิกเปิดดู port การลงทุนไปเลยก็ได้ ทำแค่นี้จนถึงวัยเกษียณ (ผมสมมติว่าคุณลงทุนทุกเดือนด้วยเงิน 10,000 บาทเป็นเวลา 30 ปี นะ) ถ้าคุณมีวินัยมากพอนะ เชื่อเถอะครับ วันที่คุณเกษียณ คุณสามารถมีได้ก็ประมาณ 10 กว่าล้านบาทได้
มันง่ายแค่นี้แหละครับ สำหรับการเป็นนักลงทุนแบบ Passive Index Investor และศาสดาของการลงทุนในรูปแบบนี้ก็คือ John C. Bogle ครับ
March 23, 2024
THE BOGLE EFFECT is a revelatory biography of the man who democratized finance for retail investors, Vanguard founder John Bogle. Author Eric Balchunas, a senior analyst at Bloomberg, covers the origins of Vanguard as an investment company, Bogle’s philosophy of engaging non-institutional money through investments in mutual funds, and his “effect” on transforming an industry that now offers a seemingly infinite number of financial products for individual investors. Bogle’s effect, as captured by this biography, is an unwavering disposition to provide value to investors with even minimal investment acumen or wherewithal, through low fee indexed investment products that embody the stock market at large. Bogle’s convictions, exceptional in light of the prevailing sentiment against courting retail investors at the time of Vanguard’s founding, have transformed an industry for the better.
November 29, 2022
There just isn’t anyone like Jack Bogle. This book started out a little like a light biography, a little about Bogle with quotes peppered in from those who knew him well. But before you know it, it is diving into the issues that kept Bogle up at night - fees, active/passive management, ETFs, smart index’s, etc. Eric Balchunas provides overview of these subjects all told through Bogle’s lens. He is far in addressing what Bogle got right (which is a lot) as well as what he got wrong (ETFs, international index’s, etc.). I ended up learning quite a bit about the nuances of investing while also learning a bit about the legend of Jack Bogle. Even those who disagreed with Jack, respected him. We are all better off for what he made and how it impacted the larger world of finance.
July 4, 2022
audbile.com audio book
narrator was ok but I feel 10% of the audiobook was him reading outloud the exhibits and charts Eric put into the book. It would of been much better to include these charts as a PDF attachment that we could refer to rather than hear the narrator repeat the funds and related statistics.
This was a relatively quick listen to finish the book. He goes over the history of the industry, a brief bio on John Bogle, and then explores how the industry has been faring since Bogles death in 2019. It was ok but nothing too earth shattering. More of an industry biopic on the asset management industry and the impact John Bogle had on it.
narrator was ok but I feel 10% of the audiobook was him reading outloud the exhibits and charts Eric put into the book. It would of been much better to include these charts as a PDF attachment that we could refer to rather than hear the narrator repeat the funds and related statistics.
This was a relatively quick listen to finish the book. He goes over the history of the industry, a brief bio on John Bogle, and then explores how the industry has been faring since Bogles death in 2019. It was ok but nothing too earth shattering. More of an industry biopic on the asset management industry and the impact John Bogle had on it.
January 20, 2023
Read this to understand the indexing/index fund industry better, and to see how the mutual business structure benefited Vanguard, and the general investor.
I got what I wanted to understand about the indexing industry. However, the book was a bit repetitive and verbose towards the end. I would definitely recommend it to anyone who wants to understand Bogle, his circumstances, and the rise of Vanguard on the whole, as well as the Index Fund/ETF industry. Finally, the book also provides a good illustration of a situation where a business model is adapted to suit the needs of customers.
I got what I wanted to understand about the indexing industry. However, the book was a bit repetitive and verbose towards the end. I would definitely recommend it to anyone who wants to understand Bogle, his circumstances, and the rise of Vanguard on the whole, as well as the Index Fund/ETF industry. Finally, the book also provides a good illustration of a situation where a business model is adapted to suit the needs of customers.
March 25, 2024
I was skeptical of liking this book going into it. How could a book written about someone's legacy possibly keep me reading? I was quickly proven wrong. This book captivates you and makes you want to read more about the impacts Bogle had and still is having on our financial world. I had only heard about the father of indexing before reading this book. But now that I've read this book, I have much more appreciation for what Jack Bogle has done for all of us. This book is a phenomenal read if you yourself are interested even a little in personal finance and would like to know how Jack Bogle has made an impact on all our retirements and investing lives.
August 26, 2024
Absolutely loved reading this book, it was a wonderful and introduction to John Bogle and the work that he has done to change the personal finance spaces in service of equity and support for average and modern investors.
I appreciate how the book had history, commentary, and financial analysis! Eric Balchunas has a history as a ETF analyst at Bloomberg and he focuses on passive fund research which positions very interesting to have both been in conversation with Bogle before death and a subject matter expert on many of the areas that Bogle and Vanguard fundamentally changed financial systems.
I appreciate how the book had history, commentary, and financial analysis! Eric Balchunas has a history as a ETF analyst at Bloomberg and he focuses on passive fund research which positions very interesting to have both been in conversation with Bogle before death and a subject matter expert on many of the areas that Bogle and Vanguard fundamentally changed financial systems.
May 28, 2022
A fantastic Tribute to Jack Bogle
While I always recommend reading the primary sources ( in this case, all of Jack Bogles books), I also recommend this book. It captures the essence of who Jack Bogle was and why this world is so lucky we had him for so long. While not perfect, he, single-handedly, changed an industry and enabled many people, myself included, to retire comfortably. He “democratized” wealth and the good news is the prescription is so simple.
While I always recommend reading the primary sources ( in this case, all of Jack Bogles books), I also recommend this book. It captures the essence of who Jack Bogle was and why this world is so lucky we had him for so long. While not perfect, he, single-handedly, changed an industry and enabled many people, myself included, to retire comfortably. He “democratized” wealth and the good news is the prescription is so simple.
August 6, 2022
Yes it's a book about Bogle and Vanguard but it's much more than that. It gives a lot of incredibly sensible financial advice, backed by industry data and respected voices. Well worth a read for anyone remotely interested in building wealth and investing, especially the upcoming generation of investors.
July 15, 2023
Vanguard is the Gold Standard for a low-cost portfolio. We have so much to thank this one individual for all of the battles he fought in order to save us all of the money we could have lost from high fees from Mutual Funds &/or ETFs. Jack Bogle truly championed the worthy cause of looking out for the citizen investor "economically, efficiently, & honestly".
February 20, 2023
Story of Bogles life was very interesting, and the different stages of Vanguards’ rise too. However, way too many quotes from people that knew him for my taste - makes it read more like a newspaper article than a book.
December 10, 2023
It's a new book on John Bogle, founder of Vanguard. The initial part was interesting wherein he talked about rise of Vanguard and Fund Mgmt industry. I think the book overemphasized on lot of things, would prefer reading books of John Bogle than this.
July 9, 2022
One of my favorite reads of the last couple years. This man really helped change an industry, to the benefit of many, many average people. What a great legacy!
July 27, 2022
A pseudo-memoir on the life work of Jack Bogle, his advocacy for the index fund, and the rise of Vanguard.
August 8, 2022
It’s interesting for sure. Would recommend, but only to very specific people. I don’t think this has mass appeal
Read
September 21, 2022Good thoughts and insight on Bogle, too much ETF talk and self promotion
December 7, 2022
Should have been an essay and not a book.
January 1, 2023
Boring. Unedited. Bleck.
May 18, 2023
Interesting to learn more about Bogle and Vanguards rise. The narrator struggled to make it clear when he was reading a quote and when it was the authors voice.
March 8, 2025
This book didn't contribute to my financial knowledge. If you are just starting to discover the world of financial investment, it can be a good book, although it written in a very boring manner.
July 13, 2023
The book is pretty interesting and has some good information, 4 stars. Audiobook is 2 stars, the narrator literally reads charts that are in the book for minutes at a time. Probably of the 11 hour runtime of the book, nearly an hour and a half is this guy reading charts.
February 23, 2023
it should be three pages. "invest in Vanguard". The biography of Bogle is really interesting though.
January 21, 2024
This is more like a biography book Bogle, not an investing book
Displaying 1 - 29 of 29 reviews