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
The miracle of compounding returns has been overwhelmed by the tyranny of compounding costs.
Interpretation
What this quote means
Bogle highlights the importance of managing costs in investing, as they can significantly erode returns over time.
In this quote, John C. Bogle emphasizes how the powerful effects of compounding returns on investments can be easily negated by the rising burden of compounding costs. This serves as a caution to investors, pointing out that while returns can grow exponentially over time, excessive costs can diminish those benefits and lead to poorer financial outcomes. Hence, it is essential to keep investment costs low to maximize the benefits of compounding.
Themes
CompoundingReturnsCostsInvestingFinance
In practice
Example use cases
During a financial seminar, I shared Bogle's quote to underscore the significance of cost management in investments.
More from John C. Bogle
All quotes βWhen 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.
John C. BogleRead
Entrepreneurs 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.
John C. BogleRead
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.
John C. BogleRead
Investing is a virtuous habit best started as early as possible.
John C. BogleRead
Wise investors won't try to outsmart the market.
John C. BogleRead
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