In 1978, Jack Bogle made history by creating the first index mutual fund at his newly founded firm, The Vanguard Group. 

Thirty-two years later, Vanguard is the largest mutual fund family with over $1 trillion in assets under management, the philosophy that Vanguard embraced, passive investing, now represents approximately 15 percent of all investment assets, and Jack Bogle is rightly considered an elder statesman of the financial services industry. 

In his most recent book, Enough: True Measures of Money, Business and Life, Bogle seizes the bully pulpit to deliver timeless advice on subjects that the business community seems to increasingly overlook.

The opening sequence is both funny and telling.  Bogle recounts a conversation between two heralded American authors at party in the Hampton’s thrown by a hedge fund billionaire. 

Kurt Vonnegut (Catcher in the Rye) asks Joseph Heller (Catch-22) if he’s upset that the party’s host makes more money in a day than each of them earned throughout their lifetime from their literary contributions.  Heller responds, “I have something that [the host] will never have … enough.”

This introduction marks a smart beginning to the brief, but tightly written facts, figures, information, stories, quotations and understanding that is only earned through decades of experience.

The first section, Money, principally focuses on two things: the merit of investing over speculation and the many travails of the financial services industry. 

In addition to referencing Benjamin Graham’s classic book, The Intelligent Investor, Bogle turns to economist (and noted speculator) John Maynard Keynes, who wrote that investing is ‘forecasting the prospective yield of an asset over its entire life,’ and speculation is ‘the activity of forecasting the market.”  Bogle argues that the aggregate result of speculation is less than zero but that investing can deliver solid returns over time.

The list of troubles that Bogle finds in the financial services industry is seemingly endless, and, unfortunately, accurate.  He cites the unreasonably high costs compared to the value delivered, the needless complexity of financial strategies and instruments, and the inherent conflict of interests built into Wall Street’s infrastructure. 

Despite all of the facts and figures, he sums this last point up most succinctly with the apocryphal story of a trader who tells his boss, ‘The bad news is that we lost a lot of money.  The good news is that it wasn’t ours.’

The second section, Business, Bogle discusses the problem of leadership in corporate America today.  He argues that individual investors no longer hold meaningful amounts of stock directly and therefore, leave the difficult task of corporate governance to the institutional investors manage their funds.  This creates the classic agent-owner problem, where the agent doesn’t care nearly as much as the owner would about the activities of management.    

Bogle argues that the lack of management’s accountability to shareholders created egregious compensation packages for executives.  Improvements in earnings, cash flow or dividends over long periods of time should be the basis for executive pay.  This would force management to focus on the intrinsic value of the business instead of the stock price. 

The third section, Life, Bogle concentrates on the truly important things in life, like family, friendship, community, character, citizenship, thrift, virtue, reason and religion.

It is clear that he genuinely believes in these qualities, because he appears to have lived by these high standards.  When he created Vanguard, he established the company as a mutual, owned by the shareholders.

Perhaps he underestimated the power of his idea, but the decision to operate as a mutual instead of as a privately held organization like Fidelity probably cost him $1 billion or more in personal net worth.  Yet, he doesn’t offer a trace of regret and instead takes pride in his decision since it allowed his fund company to act in the best interest of its shareholders. 

Jack Bogle is an inspiring figure, not just as a visionary pioneer in investment management, but also as a role model that we can all look up to.

Recommendation: Strong Buy

Enough: Trust Measures of Money, Business and Life

By: John C. Bogle

John Wiley & Sons, Inc Hoboken, New Jersey, 2009

ISBN: 978-0-470-44189-3