Before jumping into this week’s post, I want to provide a quick update on what is going on at Can I Retire Yet?. Life has been hectic in my world. So publishing has been sparse and will continue to be over the next couple of weeks.
I am in the home stretch of preparing for my CFP exam. Last week I had the opportunity to speak at the Bogleheads conference. In the midst of my preparations for both, COVID finally caught up to me recently. It decided to make up for lost time.
I’m feeling better and I plan to make up for lost time on the blog following the exam. I’ve learned a lot over the past couple months. Much of this information is captured in partially written blog posts that I haven’t managed to find the focus to finish to the standard I expect of myself.
But I did want to publish this quick post to give my impressions from my first (spoiler alert, but definitely not last) Bogleheads conference. I’ll share a few key lessons while they are fresh on my mind.
What is a Boglehead?
Before jumping in, it is probably worth explaining what exactly a Boglehead is. Bogleheads are people who follow the investing principles espoused by Vanguard founder John C. Bogle.
I’ll also share a little history that I just learned at the conference. It was conveyed by one of the original Bogleheads Mel Lindauer. When internet forums were first becoming popular, a group of Vanguard/Bogle loyalists were given the name “Bogleheads” as a derogatory term by those who rejected this investment philosophy.
However, the Bogleheads took it as a term of endearment for others with shared values. They adopted the term for themselves.
John Bogle himself later learned of a thread of Thanksgiving posts in which they shared things they were grateful for, enabled at least in part by this investing philosophy. He was touched and requested to meet with them in person.
They were obviously elated for the opportunity to meet with their investing hero. This led to the first “Boglehead” meeting in one of their homes.
Principles vs. Tactics
The most recent Boglehead conference kicked off with an afternoon of “Bogleheads University” as a “pre-conference” event. (I estimate about 90% of attendees were there for this as well.) In this event, 5 current members of the Bogleheads board each presented two key investing principles. They were:
- Have a plan.
- Invest with consistency.
- Never bear too much, or too little, risk.
- Never try to time the market.
- Use index funds when possible.
- Keep costs low.
- Minimize taxes.
- Invest with simplicity.
- Stay the course.
During the course of the presentations, Rick Ferri pointed out that these were principles espoused by John Bogle and adopted by all Bogleheads. We would hear them repeatedly over the course of the conference. Under this broad umbrella there are countless combinations of tactics that you can apply to best meet your individual needs.
I appreciated this nuance being pointed out. It is similar to the way I use disparate stories in the Choose FI book. I then organize them into common principles that anyone can apply in pursuit of their own financial independence.
It was fascinating to hear how differently the presenters applied the Boglehead principles with their own finances and how they teach them to others.
I encourage everyone to work on getting better at distinguishing between principles and tactics. Doing so leads to asking better questions which in turn will result in better outcomes.
Common Ground on Environmental, Social, and Governance (ESG) Investing
There was a wide variety of perspectives and lively debate on most topics discussed at the conference. There was one exception, ESG.
I heard no disagreement and no ambiguity in discussions of ESG. The message was loud and clear.
However, I was still a little surprised about the lack of dissent on this topic. Outside of the Bogleheads community this is an idea that continues to generate a lot of attention. It is also attracting a growing share of investor dollars.
So I found it interesting to hear, and worth pointing out, the unanimity and conviction with which this concept was rejected by every one of these smart people with otherwise diverse opinions.
The relationship between Vanguard, John Bogle, and the Bogleheads is interesting. The Bogleheads grew out of an admiration of Bogle which created a loyalty to Vanguard.
In the later years of Bogle’s life he had no official role at Vanguard. Yet he maintained an office, on Vanguard’s campus, from which he continued to write. At times his writings were critical of new directions Vanguard was going. (Awkward!)
Bogle passed away early in 2019. Since then, Vanguard has continued to change and evolve. Bogleheads have often been Vanguard’s most vocal critics.
Issues have ranged from a general change of philosophical direction towards private equity investments and promoting advisory services, customer service issues, and a recent class action lawsuit filed against the company for creating large and unexpected capital gains taxes among holders of their target date funds.
These are issues I was curious to hear discussed. I have always been a Vanguard proponent. Vanguard is where I invest my own money.
What I can tell you is that most of the Bogleheads, an admittedly biased sampling of people, share my view that while Vanguard has issues so does every other company. Vanguard’s structure still aligns their interests with their investors’ more so than anyone else’s. Thus the consensus is they are still the most trusted company to invest with.
From the Vanguard representatives that spoke at the conference, I can tell you they were clearly aware of the issues and prepared to address questions about them. They assured us that the Bogleheads’ voices are heard loud and clear at Vanguard, and that these issues are being addressed internally.
What I can’t tell you is that I had my concerns completely alleviated. This will be an issue I continue to watch and write about.
A theme I touched on in my talk was the idea of enough. I was pleased to hear this theme touched on by other speakers and panelists throughout the conference.
The most memorable example for me, unfortunately, came as the result of a blunt, but in my opinion correct, answer from a panelist responding to an attendee’s question. The attendee asked what she could do to avoid being pushed into the highest brackets for IRMAA (Medicare’s Income-Related Monthly Adjustment Amount).
The response: Just pay the couple hundred dollars a month in extra Medicare premium and go enjoy your life. If you have to deal with this issue, you’re making $500,000+ annually as a single person ($750,000 as a married couple) in retirement. You’ve won the game!
The concept of knowing when you have enough was also addressed in several discussions about how much risk to take in your portfolio. These were especially relevant conversations given current market and inflation conditions. Many people wish they could turn the clock back and listen to them at the end of 2021.
The Bogleheads are a fabulous community. They give freely of their time and knowledge to help others. It is similar to the community that has organically grown out of those interested in F.I.R.E.
The beautiful thing about either community is that you surround yourself with a new reference group. As the saying goes, a rising tide lifts all ships.
Unfortunately, this is also the worst part of either community. As people go deeper down these rabbit holes, many feel the need to always keep optimizing, improving, and having more.
I appreciated hearing the message of enough, even if it was not presented and discussed with the frequency or intensity of the other principles outlined above. I commit to being a voice pressing this conversation forward.
A Duty to Give Back
On a related note, I appreciated the emphasis throughout the Bogleheads conference on recognizing our good fortune and finding ways to give back. In fact, the entire conference is just one piece of the 501(c)(3) non-profit John C. Bogle Center for Financial Literacy, with proceeds used to support other educational tools.
I encourage you to check out the recently redesigned website. It contains tons of free information in virtually any format you choose to consume it. They will also be posting all of the speaker’s talks and panel discussions from this year’s conference.
One talk you will not have to go find is Michelle Singletary’s closing Keynote conversation with Christine Benz. I promise I will be sharing it as part of one of my monthly “Best of” posts as soon as the video is made available.
This tweet sums it up well:
In the course of a 50 minute talk, Singletary brought tears to my eyes twice. She first did so by making me laugh so hard. Then later she did it again by sharing her personal story with such emotion and conviction.
Her keynote delivered an important message about each of our personal responsibility to take the good fortune we have been given and use it to do good. It was the perfect way to end an outstanding conference.
Stay The Course
If you’ve read John Bogle’s books or listened to him speak, you know he has a number of go to catch phrases he loved to use to convey his principles in simple, memorable, and actionable ways. “Stay the course” may be his most famous.
Stay the course was reinforced throughout the conference. Every attendee was offered a free copy of Bogle’s final book which carries that title. Stay the course was also the final principle of Bogleheads University, as presented by Jim Dahle.
As Dahle emphasized, “stay the course” is the principle that tends to sound the most simple. In practice, it can be the hardest to follow. This is where having a community, whether online, in local meet-up groups, or at a conference like the Bogleheads can be especially valuable.
Staying the course is particularly important when times are hard, as it currently is for investors. But this principle doesn’t only apply to investing.
After giving my talk about how FIRE principles work with Bogleheads principles, I had the opportunity to speak with a number of people who thanked me for sharing a message of hope and a path for action.
I tried to take a little bit of extra time with each of them individually. As an unemotional observer providing the 30,000 foot view it is easy for me to see how close each of them are. Often sitting in the driver’s seat guiding our own lives, we tend to focus only on the next obstacle we see through the windshield in front of us.
I hope I had even a small impact in helping at least a few of them “stay the course.”
Final Thoughts on the Bogleheads Conference
The Bogleheads is a fabulous organization, committed to spreading financial literacy in a world that desperately needs it. I encourage you to check out the newly revamped John C. Bogle Center for Financial Literacy website where their resources are neatly curated.
John Bogle’s principles, not only for investing but for life, are needed in this world. I encourage each of you to explore them for yourself. Then share them with others as a way of paying forward your good fortune.
The conference was extremely well run. As a speaker with access to some of the behind the scenes workings, I assure you that this is as pure of an organization as exists.
The organizers do everything in their power to put on a first class program, while doing so in a cost efficient way. This ensures the conference is accessible to as many people as possible. Proceeds then go to other aspects of the organization that are not profitable.
As a speaker, I can also tell you that the one ask of me, and all other speakers and panelists, was to make ourselves available and try to provide the most welcoming and beneficial experience possible for attendees.
This was my first Bogleheads conference, but it will not be my last. If you have considered going this year or in the past, I would encourage you to get off the fence and go next year. You won’t regret it.
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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at firstname.lastname@example.org.]
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