John "Jack" Bogle founded Vanguard Group
in 1974 on the idea that low-cost index funds, which reflect the
performance of the entire stock market, would outperform actively
managed funds.
He turned out to be right. Index
funds consistently outperform most high-fee mutual funds; investing
gurus like Warren Buffett fervently endorse them;
and Bogle's company, Vanguard, is now one of the world's largest
financial institutions, with nearly $3 trillion assets under management.
For his new book "Money: Master The Game," Tony Robbins asked the investing legend what money means to him. The famously thrifty Bogle, who is 85 and still works every day, had the perfect response.
"I look at money not as an end but as a means to an end," Bogle said.
To underscore his point, Bogle told a great story about the writers Kurt Vonnegut and Joe Heller.
"They meet at a party on Shelter
Island," he said. "Kurt looks at Joe and says, 'That guy, our host over
there, he made a billion dollars today. He's made more money in one day
than you made on every single copy of 'Catch-22,' [Heller's novel].'"
"And Heller looks at Vonnegut and says, 'That's OK, because I have something he, our host, will never have. Enough."
The investor knows something that many of us forget: Striving for more will never be as satisfying as having enough.
CW8888:
How about you?
Have you work out your magic number?
How much is enough for your family to maintain sustainable retirement income for life?
Posts
Hello CW,
ReplyDeleteTo answer your last question, I would deem to be 'sustainable' when my passive income can pay for all of my monthly expenses.
I would deem to have 'enough' when my portfolio can generate such an equivalent amount of passive income consistently year after year.
Do you compute future monthly expenses with inflation e.g. 2 to 3% rate?
DeleteThat's a good question. I didn't factor in the assumption. In fact, everything now is still fuzzy for me. I would expect my expenses to increase dramatically as my sons grow up. Right now, I am only focused on building up the portfolio.
DeleteI think at this stage your asset value (net worth) has higher weightage than cash flow; but I suspect you are likely to disagree as your blog's nick say so. LOL
DeleteHaha, possibly so. But I have never really measured my net worth. I suspect it is negative because I am still a slave to my housing mortgage. :(
DeleteIt is okay. Usual problem for married man with kids. How about looking at portfolio's asset vale. :-)
DeleteActually, high asset value can be converted to sustainable cash flow when it becomes necessary to do so.
Read? The Most Important Number
DeleteContent is the key, it's needs versus wants. Once you worked out what you need hence you have enough.
ReplyDelete