Wall St Pioneer John Bogle Explains Why Greed is Not Good!

maybe not in this conversation um you talked about money being the incentive that it's the become the only incentive uh throughout the financial industry and actually in our society for a lot of uh different people and a lot of different businesses how did you avoid that money was the only incentive I mean personally and how much how do you know how much is enough you could have been a billionaire yourself that's what everybody says I don't know if that's true or not well I mean Vanguard is certainly worth 10 or 20 or 30 billion dollars in the abstract but as we making no profit it's not worth anything right right but personally how did you pull back from just going for the money and wanting to have a values based money well I you know I really don't want a lot of credit don't want a lot of credit for that I had an opportunity to after getting fired from Welling to build a new kind of company and the only way I could see to do it was to take over the Wellington funds and since it was a very big political struggle uh to to let Wellington for a while continue to manage the funds and distribute the funds uh some of that lasted to this day Welling in fund for example uh we did away with the distribution months later year later um and did away with their management of other funds when they didn't do a good job and kept them when they did when they did do a good job and leaned on our fees we pay we pay Welling in management company less than a basis point for running our chiny May fund and I didn't know what they do with all the money to be honest with you I mean it creates a huge amount of money dollars at one basis point you imagine when I think about 50 basis points for win Amer fund which Franklin charges or something like that um so it just grew as an idea and uh my argument to the directors was the same as it would be today these they were directors of the Wellington funds and I've been fired by the directors of the Welling man and you shouldn't let somebody else fire your chief executive and I had some allies on the board i' never picked any of them and my Boston friends had put some allies in the board and they did pick them and the board was quite evenly divided but it was quite clear that uh I needed a really dramatic idea to make this work and that was to neutralize to say you'll never be in this position the funds will run their own Affairs and so it grew from there but this was when we were a billion dollars no was that was that's the fun shareholders billion dollars not mine uh you know would if I hadn't done that probably couldn't have made the sale I mean they didn't want two two managers out there doing the same thing uh and it just got bigger and bigger and bigger so did did someone them walk in and say you know I want you to decide whether you want the 26 billion or do you want a that's Ned Johnson's Fortune uh or do you want uh do you want to just go ahead the way you are that that never happened just we just kind of grew into this but it never bothered me I mean I was nicely paid uh you know not by the standards of Wall Street but by any other I mean I made so much money I'd be embarrassed uh in the standards of you know normal America uh so um and I'm not a spender anyway I don't care that much I don't I dislike going into stores and I have to buy something for myself it's much worse than buying something for somebody else yeah I agree so how do you know how much is enough I mean how do you get how do you personally well I think if you're have a satisfying life uh would you another couple of bucks hurt probably not uh I don't think there's a quantitative answer to that uh you know you certainly want to I mean I think most people would want to First make sure their wife is taken care of her husband uh Second and make sure their their children receive as Warren says and not sure he does this um receive an inheritance that um large enough to let them do anything they want but not so large they can do nothing and you know I don't think he could possibly live up to that because if you had say $5 million in inheritance uh at 5% well you're not going to get 5% today call 3% that's $150,000 a year uh that's enormous you if you didn't heard of a million dollars that's $30,000 a year you can do nothing on $30,000 a year me I want to so uh but that's that's kind of a decent principle uh and uh since none of us does anything by ourselves in this world uh you certainly want to leave a nice amount to charity and that's greatly uh facilitated or encouraged by the tax law people say it doesn't matter I think you're just stupid U but I'll leave substantial amounts of Charity a little Foundation of mine and uh the that's about that and so guess you'd have to say that I don't have to worry about money anymore because if I spend more than I should charity will get less or the kids will get less or my wife will get less that's funny that's um but I don't care for spending yeah and not that I don't have an Indulgence here and there yeah what are your indulgences well I'd have to let me think about that and I'll talk to you tomorrow oh that's great um yeah and just on a final note I mean what would you say to um people developing businesses now and in terms of how to maneuver through a world where money is the greatest incentive but really where we should get back to Our Roots because that inevitably fails us how how do you combine money and values going forward in a business well I think the answer to that is I guess surprisingly easy uh and that is if you're contributing value to society I don't see why you should be limited in how much money you have at all I don't begrudge it to Bill Gates I begrudge a little bit his operating under an Anti-Trust law that never contemplated you know selling people someone a piece of equipment that all was like Gillette razor blad it's as if you had to buy your razor blades from Gillette the time you bought the blade and you don't have to do that but uh sort of capitalize and if you will a loophole in the antitrust laws but I don't agret that to I don't forr to Steve Jobs they've created great value for society and other people have done that too a lot of other people and uh take whatever you want uh go public do whatever what I what I don't like is basically a culture where if you gamble a lot and win you get paid as much as the guy who creates all that value and all that gambling clearly creates no value it actually turns out to create negative value because there's a loser and there the cier if it was just a winner and loser it would be zero but with with the crup in the middle lay uh it creates negative value so you wise man once said that money will buy you anything in life that is totally unimportant that's right that's exactly right I'm writing it down and uh so and a lot of it's attitudinal every once in a while I get a little bit jealous envious maybe of uh what other people have but it doesn't last long I think I'd be it wouldn't be human if I didn't yeah so um in closing you you think that everyone what's the personal responsibility of everybody in business do they have one to the outside world to the exterior world I think all of our personal responsibility is a response ability to leave everything we touch a little bit better uh whether it's a family whether it's a community whether it's a corporation whether it's Society um and if we can do that and everybody does it we're going to have a great world H and even if the majority of people do it we're going to have a great world and you know I guess that's the fundamental principle

Channel: Good Business New York! (GoodB)

Views: 16,340

Keywords: John Bogle, Wall Street, Main Street, Wellington Funds, money and values, value for society, personal responsibiltiy

Id: 7cRBdSWrxP8

Length: 8min 27sec (507 seconds)

Published: Fri Jul 29 2011