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
Similar quotes
The average investor's return is significantly lower than market indices due primarily to market timing.
Daniel KahnemanRead
You will either learn to manage money, or the lack of it will manage you.
Dave RamseyRead
When growth is slower-than-expected, stocks go down. When inflation is higher-than-expected, bonds go down. When inflation is lower-than-expected, bonds go up.
Ray DalioRead
Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay.
Charles DickensRead
Short term volatility is greatest at turning points and diminishes as a trend becomes established
George SorosRead
Indeed, bull markets are fueled by successive waves of prior skeptics finally capitulating as their fears fade. Eventually, fear turns to euphoria, and that's the stuff of bubbles.
Kenneth FisherRead