I would always advise young people to follow their star - not my star. They have to live their own life. If they decide they want to go into the investment business, do it, but make it a better business than it is today.
John C. BogleRead
When our financial system - essentially our money managers, marketers of investment products and stockbrokers - put up zero percent of the capital and assume zero percent of the risk yet receive fully 80% of the return, something has gone terribly wrong in our financial system.
Interpretation
What this quote means
The quote critiques the financial system where managers profit significantly without bearing risks.
John C. Bogle highlights a fundamental issue in the financial industry where money managers and brokers often reap substantial rewards despite not investing their own capital or taking any risk. This disparity suggests a flaw in the system that prioritizes profit for a select few while possibly neglecting the interests of investors, leading to questions about fairness and accountability in financial practices.
Themes
Financial SystemInvestmentRiskReturnMoney Management
In practice
Example use cases
In a presentation about financial ethics, use this quote to highlight the discrepancies in profit and risk within the industry.
More from John C. Bogle
All quotes βEntrepreneurs or international conglomerateurs, or large financial institutions buy or create mutual fund management companies to create a return on their own capital. It's capitalism at work, where the rewards tend to go to the managers rather than the investors.
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Net return is simply the gross return of your investment portfolio less the costs you incur. Keep your investment expenses low, for the tyranny of compounding costs can devastate the miracle of compounding returns.
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Investing is a virtuous habit best started as early as possible.
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Wise investors won't try to outsmart the market.
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The Vanguard Experiment was designed to prove that mutual funds could operate independently, and do so in a manner that would directly benefit their shareholders.
John C. BogleRead
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