Jack Bogle Portfolio 2021 -- (John Bogle Founder of Vanguard)

hey guys welcome back so john c bogle known to his friends as jack bogle is one of the all-time grey legendary investors he was the founder of vanguard he gave birth to the index fund and as warren buffett said has done more for the individual investor than just about anybody in history sadly jack passed away in 2019 however his investing philosophy and also portfolio strategy does live on his net worth was around 80 million dollars and he dedicated his life to make sure that it was the investor not the corporation that took home the lion's share of the profits so in this video i'm going to be showing you the jack bogle portfolio for 2021 and the reason i know this is because his portfolio strategy didn't really change in addition i'm also going to show you how to get to the one million dollar mark using index fund investing i'm also going to show you how fees can kill your gains as i think many people say that fees are important however i'm going to show you an eye watering example of just how fees steal your wealth as always if you do find anything useful in the video don't be shy be sure to drop a like that would be very much appreciated okay so sit back and relax guys here is the portfolio strategy from legendary investor jack bogle okay so here is what we've got coming up we're first going to take a look at the jack bogle portfolio for 2021 we're then going to take a look at the index fund strategy and i'm going to show you what it takes to get to that million dollar mark we'll then take a look and i'll give you an eye watering example of how fees can kill your gains and then we'll finish with a bonus clip jack bogle explaining about asset allocation okay so drum roll please here it is the jack bogle portfolio and it is 100 in stocks and jack bogle's favorite index fund was the us total stock market index fund so there is a big debate of how much money should be in bonds and how much money should be in stocks but he always said for maximum returns you would be 100 in stocks yes this is going to be more volatile you're going to have to go through 10 20 even 50 drops but over the long term this will outperform a split against bonds more specifically if you are us-based then the index fund is vt smx the etf version is vti and for uk people it would be on the vanguard site us equity index fund so i thought i'd check out and see how vti has performed over the last 10 years and the performance has been excellent so i just took a slice of the last 10 years and it performed pretty much 200 so that's a 200 percent growth giving an average of 20 now just bear in mind the historical average of the s p 500 is closer to 10 compounded so us stocks are outperforming the average but jack bogle also constantly reminded us of reversion to the mean so we could see a lower performance in the years to come however over the long term you're going to get around about 10 then as you age he mentioned about having a very rough guide of bonds to your age even though having said that in jack's later years he still had about 50 in stocks and he had 50 in bonds when it comes to which bonds he used investopedia had said that it was a split between intermediate bonds and also inflation protected bonds so this is more of what his retirement portfolio would look like 50 in a u.s total stock market fund 50 in bonds split between intermediate bonds and inflation-protected bonds owning the stock market over the long term is a winner's game but attempting to beat the market is a loser's game so now i'm going to show you the big picture index fund strategy and how we get to that million dollar mark but essentially what we're doing is using our money to make more money and we're leveraging compounding so let me give you a few different examples so starting with fifty thousand now this could be fifty thousand dollars pounds euros depending where you're watching historical average has been 10 for the s p 500 and you would have to wait 30 years to get to that million dollar mark and we can play around with these variables you can put more money in and it'll take less time or you can put less money in but it'll take more time or you can get a higher return lower return but let me give you two more quick examples this time if you are only able to squirrel away 25 000 at 10 you would have to wait 40 years to break through the million dollar mark and finally if you could put away over a hundred thousand at 10 you'd only have to wait 25 years to get to that million dollar mark buying funds based purely on their past performance is one of the stupidest things an investor can do okay so as i promised you guys an eye-watering example of how fees can kill your gains so in this example it's still using 50 000 now the fee on this fund is going to be two percent average return of 10 a year and this is over 32 years so this is how much your part of the fund would be worth this is how much you've lost due to fees so in total over the 32 years it made over a million dollars however just this small little insignificant two percent had taken 44 of your total fund and i urge everybody who's watching to dig into the black box which is pensions my question to you is do you know exactly where your pension money is being invested and also do you know the exact breakdown of all the fees you are paying in your current pension because there are tens of thousands of people all around the world putting away pension money and they have no idea where it's going or what they're being charged and if i can continue jack's work and help people save because these toxic funds taking 44 of people's retirement money is not good enough on a more positive note let's take a look at a vanguard index fund this time everything's the same the only difference is your annual fee is going to be 0.1 so this is what the fund will be worth and this is what would have been taken away so the fund total is exactly the same you have made over one million dollars however this time you've only lost 2.8 to fees and you are the one that keeps the million don't do something just stand there and i do love this quote as basically what he's saying is that 99 out of 100 times when things are going on in the economy and the market the best thing you can do is nothing and just keep adding to your index fund okay so time to finish with a bonus and this is a clip from jack bogle himself discussing asset allocation what is the simplest 10-minute solution or half-hour solution to getting vanguard returns well i'll give you a simple solution but the one thing we know about the average is that unlike wobble going like wobble gone you know there's a whole lot of people that are here and here and here and the average is here so in essence nobody's average uh you're all a little bit of above average or a little bit less than average you may have greater risk tolerance you may have greater income requirements uh you may have greater financial ambitions and are willing to take risks to accomplish them but in all those cases the lower the price you pay for owning the stock market on the bond market the better off you are now i have talked about a rule of thumb and i want to underscore it's a rule of thumb a place to begin thinking about having your bond position equal your age so when you're 20 you'd be eighty percent bonds and that's a rule i would not pay for 80 stocks and i wouldn't dream of telling somebody their first investment to be 80 stocks they should be 100 in stock you know in the first year maybe they'll put away a thousand dollars that's a drop in the bucket compared to the value of their career and the value of what the investments will ultimately be and by the same token uh at least at these interest rate levels i'll comment on that in a second i wouldn't dream of telling everybody who was 87. say that with pride you say that with pride and enthusiasm to be 87 i am not uh i'm approximately 50 50. and uh so a lot depends on your own requirements and this rule of thumb first of all very important for people to think about and that is just about everybody that you're going to be talking about every investor you're talking about also has social security and that has a capitalized value what is that the size of that asset pool you would need to create the returns you get in your monthly social security check probably 350 thousand dollars so if you have 700 000 and 350 000 social security and you put 100 of your stocks into that so it's 350 in stocks uh 350 in this bond-like investment and you're 50 50. so take that into account if you have a pension from a local government or from a corporation that's not going to go bankrupt i quickly add you should add that in and what you're trying to do when you retire which i am going to do someday i think you're going to fail with that i think you're going to fail at that it would not be my first failure but when you want to do that you want to ensure a monthly flow of income so don't watch the market just make sure your portfolio is producing income and will continue to produce income so you get your social security check every month you set up your mutual fund account or your index fund account for a monthly payment you can do that and just you want those payments to be stable and with respect to social security and the and the fund alike will grow a little bit over time dividends are an extremely important part of this so there you are guys that was the jack bogle portfolio of 2021 as he would call it the hedgehog strategy being able to do just one thing really really well you also saw what the big picture of index fund investing looks like and how to get to that million dollar mark and i also showed you just how crippling fees can be to your portfolio and i urge you to dig into your pension and find out exactly where is the money being invested and just exactly what fees are you paying okay so hopefully you found something useful in fact just one favor to ask if you did find anything useful in the video then be sure to drop a like that would be very much appreciated if you haven't yet subscribed to the channel i invite you to click below and join us i do have some great videos coming up that you don't want to miss okay cheers guys thanks for watching and i'll see you in the next video bye for now [Music] you

Channel: Investing Made Simple - Nathan Sloan

Views: 50,478

Rating: 4.9413991 out of 5

Keywords: Jack Bogle Portfolio, vanguard index funds, Vanguard VTI, jack bogle net worth, jack bogle books, jack bogle quotes, bogleheads, three-fund portfolio, jack bogle age, jack bogle 50/50

Id: 7Htai2R4NBc

Length: 12min 19sec (739 seconds)

Published: Mon Feb 22 2021