The House that Bogle Built: How John Bogle and Vanguard Reinvented the Mutual Fund Industry Hardcover – April 18, 2011

John Bogle's approach is a common sense approach to a better way of saving for your future. Young people should be required to read his stuff.

I don’t normally comment on books. And while I think the author injects his idealism a little bit in places, I was truly inspired by the message — so critical right now as the current administration eliminates fiduciary rules and Dodd Frank (albeit imperfect). We need business leaders with Bogle’s just capitalistic spirit.

John Clifton Bogle. "Fortune" named him one of the four Investment Giants of the 20th century. In 2004, "Time" called him one of the world's 100 most powerful and influential people. Lewis Braham's excellent book, "The House that Bogle Built," details the extraordinary life and career of the man so often described as the conscience of the mutual fund industry. From the challenged Depression-era upbringing, through various family dislocations, to the formation of the Vanguard Group. It's all here, rendered in one well-written and highly accessible volume.Of the very accomplished it's often asked: "How exactly did you start?" The reader witnesses the young Bogle, fresh out of Princeton in search of a career, leveraging his senior thesis on the nascent mutual fund field to gain an interview with industry leader Walter L. Morgan. Founder of the Wellington Fund, Morgan circulates the thesis throughout the firm before offering Bogle the job. Of the candidate, Morgan remarks, "He knows more about the fund business than we do." Morgan then becomes the mentor and Bogle the heir apparent, ultimately landing him into the CEO's office. When a later acquisition splits management authority between Philadelphia and Boston, with tensions and disagreements mounting, Bogle deftly pulls off the coup of a lifetime: ultimately separating Wellington the fund from Wellington the management company. While following this fascinating progression, we witness the birth of the modern-day Vanguard Group. Through it all, the grit and determination of the man ("press on regardless" being a favorite exhortation) shines through.But why form Vanguard in the first place? The answer is important to and has an impact on every investor trying to fund a retirement through mutual funds. Fortunately, Bogle had these old-fashioned ideas about fiduciary roles, that money management should be more a profession and less a business. He felt the fund industry as constructed could only harm the investor. Management companies, hired to advise the funds, were for-profit entities, or were owned by giant conglomerates. They sought to maximize profits for their own shareholders. (Please think about that, the next time you compare fund firms for inclusion in your own portfolio.) To be successful, they captured every dollar possible through a variety of onerous fees and expense ratios. Further, management companies packed boards so as to move in lock-step with their wishes. Ultimate control rested with these companies over the funds that hired them. As Bogle saw it, servicing two masters introduced a fundamental conflict of interest. How could the management company perform a fiduciary role of maximizing profits to fund investors (lower fees equal higher returns) and at the same time satisfy its own profit-hungry shareholders? Bogle's vision for a new order was to introduce a truly mutualized structure. Investors, i.e., fund shareholders, would own the funds and, collectively, the management company. All mutual funds offered through this structure would be on an at-cost basis, with profit extraction by an external entity removed. Individual fund investors would finally be given a fair shake.One fascinating thing I learned from this book is the influence that the Enlightenment has had on Bogle. His emphasis on reason and pragmatism, along with a core belief that good works on earth represent the true measure of a life lived well, comports wholly with 18th century views. It's not at all hard visualizing him sitting comfortably with the likes of Thomas Paine, James Madison, and Benjamin Franklin discussing affairs of the day. In fact, it was intriguing to hear that some have favorably compared him to Franklin. To his lasting credit, Bogle helped spearhead the drive to build the National Constitution Center, the first museum dedicated to the U.S. Constitution. And he served as its chairman for many years. Former Center president Rick Stengel said about Bogle, "He loved taking people to the sculpture room where the framers are and talking about how the statues are life-sized and how that worked, and he always put his hand on Madison's shoulder, who was the giant of the making of the Constitution but the shortest guy of the conventioneers."Forced to retire upon reaching Vanguard's mandatory retirement age, Bogle has spent his post-Vanguard days in true Enlightenment style: leading the cause of shareholder advocacy and vigorously promoting fundamental, nay revolutionary, industry change. Unswervingly, he fights on into his eighties, after serious heart ailments that would have felled persons of lesser spirit, to provide you and I that fair shake against the vested interests of Wall Street's insiders.A remarkably good read, and I have no misgivings rating it 5 stars!

Since I am a big fan of Jack Bogle I looked forward to reading this book. For the most part I enjoyed it. My one criticism was the inclusion of what I thought were personal opinions in the investment arena by the author particularly in Chapter 18.

A light book about someone who dare to make the mutual fund industry really mutual.The book struggles between a biography and a research of Vanguard history. Not been able to tip the scale to one or the other.

Being a relatively new Vanguard investor, but having long known of it's reputation as the low cost provider of mutual funds, I looked forward with great anticipation to learning about how it all came about. At the same time, I knew little about Jack Bogle beyond others' opinions of him, which I found to be almost entirely positive. Mr. Braham did not disappoint me on either count.When I first read through the book, really skimming more than reading in depth, I wondered if anyone who was not already a Vanguard or Bogle fan would find Braham's tale even interesting, much less fascinating. Now that I have taken the time to re-read it and let it sink in, I believe it will be one of the more impactful accounts of our generation.Of course, Braham had some pretty good material to work with. Jack Bogle is no shrinking violet by any means. And the company he founded could not have come to fruition at the hands of a lesser man. In a sense, anyone who has entrusted their investments to Vanguard has been extremely lucky that Jack Bogle as a Princeton student happened upon that Forbes article on mutual funds all those years ago.I think Braham has given a complete account of the man behind the institution, warts and all. You may not have found Bogle to be the most comfortable person to work for or against, but I'll be you couldn't help but admire his passion, his character, his tenacity or his genuine caring for the little guy. As Braham makes clear in his book, no matter what happens (and to paraphrase the late Johnny Carson) you can't take the Bogle out of Vanguard.As Braham points out, it is unfortunate that we don't have a more two-sided account of the friction between Bogle and his successor, the other Jack (Brennan). It feels like a bit of a hole in the tapestry to not have more of an understanding of just how that relationship developed, then collapsed.Braham's account of Bogle's medical issues, especially the heart transplant, was surprisingly intimate and gives the reader a genuine feel for how serious his condition was and how fragile life is to even one who is larger than life. We don't get much of a glimpse of Bogle's family life beyond the encounters that served as background for his medical problems. That may well be because Jack just didn't think it was any of our damn business.The author is not afraid to let us know how he feels about many of the positions taken by Jack Bogle and by Vanguard. He also freely lets his politics show, especially when discussing the events leading up to the financial meltdown of 2008.I applaud Braham for trying to pry open the black box that represents Vanguard's so-called Partnership Plan, and for encouraging Vanguard to be more open and transparent about its executive compensation. If there is another hole in the tapestry, the workings of the Vanguard Partnership Plan would be it.If I had one criticism of Mr. Braham's work, it would be a tendency to get a bit bogged down in his attempt to analyze various aspects of the mutual fund industry, especially in his penultimate chapter on the future of indexing.All in all, I would recommend this book to anyone who ever wondered about how Vanguard became somewhat of a household name and was the least bit curious about the man behind its founding. I would consider it required reading for anyone who has money with Vanguard and, especially, anyone who looks up to Jack Bogle.