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
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.
Interpretation
What this quote means
The net return on an investment is what's left after costs are deducted, and minimizing expenses is crucial for maximizing returns.
This quote by John C. Bogle emphasizes the importance of understanding investment returns as the gross return minus costs. He warns that high investment expenses can erode the benefits of compounding returns, a powerful phenomenon in finance that allows your investment to grow exponentially over time. By keeping costs low, investors can more fully realize the potential of their investments and enhance their long-term financial success.
Themes
InvestmentExpensesReturnsCompoundingFinance
In practice
Example use cases
Use this quote in a financial literacy seminar to highlight the importance of managing investment costs.
More from John C. Bogle
All quotes →When 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.
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Investing is a virtuous habit best started as early as possible.
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Wise investors won't try to outsmart the market.
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The Vanguard Experiment was designed to prove that mutual funds could operate independently, and do so in a manner that would directly benefit their shareholders.
John C. BogleRead
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