Are You Taking Kickbacks, Barefoot?

Hello,

I have a simple question: does Scott or his team receive payments from Vanguard to recommend their products?

Peter

Hi Peter,

I have a simple answer to your simple question: NO!

But your question does give me a nice segue into something I really want to talk about:

Jack Bogle, the founder of both Vanguard and the first ever index fund (the S&P 500 — you’ve probably heard of it), died a few weeks ago.

Literally the day before his death I put in a request to interview him, hoping to hear his wisdom on what could be done about the embarrassment that is our fee-gouging retirement industry.

Sadly, it wasn’t to be.

But he’s a legend and you need to hear his story.

Jack Bogle was a rebel who set up Vanguard in 1975 as a non-profit.

Vanguard could have made him one of the richest people on earth. But it didn’t. Instead, he put investors first, with an unrelenting focus on lowering fees.

Warren Buffett regarded Bogle as his hero, saying:

“If a statue is ever erected to honour the person who has done the most for American investors, the hands-down choice should be Jack Bogle.”

Last year the Vanguard index fund beat around 85% of the 100 large cap Aussie fund managers. So faced with this overwhelming evidence why don’t our Aussie super funds embrace low-cost index investing?

In fact, that’s the exact question I was going to ask Jack.

Now I don’t want put words in his mouth, but my guess is that he’d point to the collective $30 billion a year in fees trousered by our super funds.

Or to quote the man himself:

“The miracle of compounding returns is overwhelmed by the tyranny of compounding fees.”

RIP Jack!

Scott

Reminder: I first wrote about this years ago and highlighted the low costs. Today there are better deals on offer. How do I know? Because my readers constantly email me about them! So before you do anything, do a quick google.