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.
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
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
Similar quotes
Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
Peter LynchRead
Never pay the slightest attention to what a company president ever says about his stock.
Bernard BaruchRead
We tend to focus on assets and forget about debts. Financial security requires facing up to the big picture: assets minus debts.
Suze OrmanRead
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
George SorosRead
When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.
George SorosRead
If I was counselling an individual, and my purpose was to help that individual, the most important thing would be that you should save more. Because don't expect that your retirement will follow those trajectories that some advisers are telling you.
Robert J. ShillerRead