To honour Jack Bogle’s life and work, this is how he compares his investment ideas with those of Benjamin Franklin …
John Bogle and Benjamin Frankin
As I consider my investment ideas in the context of those I have observed over the long sweep of history, I find, in retrospect, a remarkable le set of parallel principles that reflect the wisdom of Benjamin Franklin. Consider this collection of his sayings and mine.
On saving for the future:
Franklin: If you would be wealthy, think of Saving as well as Getting. Remember that time is money. Lost time is never found again.
Boggle: Not investing is a surefire way to fail to accumulate the wealth necessary to ensure a sound financial future. Compound interest is a miracle. Time is your friend. Give yourself all the time that you possibly can.
On the importance of cost control:
Franklin: Beware of little Expenses; a small Leak will sing a great Ship.
Bogle: Basic arithmetic works. Your net return is simply the gross return of your investment portfolio less the costs you incur. So minimise your investment expenses.
On taking risks:
Franklin: There are no Gains, without Pains. He that would catch Fish, must venture his Bait.
Bogle: Invest you must. The biggest risk is the long-term risk of not putting your money to work at a generous return, not the short-term (but nonetheless real) risk of market volatility.
On understanding what’s important:
Franklin: An investment in knowledge always pays the best interest. Learning is to the Studious, and Riches to the Careful. If a man empties his purse into his head, no man can take it away from him.
Bogle: To be a successful investor, you need information. If information about past returns earned by mutual funds – especially short-term returns – is close to meaningless, information about risks and costs is priceless.
On the markets:
Franklin: One man may be more cunning than another, but not more cunning than everybody else.
Bogle: Don’t think that you know more than the market; on one does. And don’t act on insights that you think are your own but are usually shared by millions of others.
Franklin: Great Estates may venture more, but little Boats should keep near shore.
Bogle: Whether your assets are great or humble, diversify, diversify, diversify in a portfolio of stocks and bonds. Then, only market risk remains. Investors of modest means should be especially cautious.
Franklin: Tis easy to see, hard to foresee
Bogle: It takes wisdom to know what we don’t know.
On looking after you own interests:
Franklin: If you would have a faithful Servant, serve yourself.
Bogle: You must never ignore your own economic interests.
And finally, on steadfastness:
Franklin: Industry, Perseverance, and Frugality make Fortune yield.
Bogle: No matter what happens, stick to your program. Think long term. Patience and consistency are the most valuable assets for the intelligent investor. “Stay the course.”
Yes, I freely concede that eighteenth-century Franklin had a far better way with words than twenty-first-century Bogle. But our near parallel maxims suggest that the principles of sensible saving and investing are time-tested, perhaps even eternal.