Two legends of finance passed away this week — one local and one from the USA — and it came as I was told by a young whipper snapper that millennials wouldn’t want to be educated about money by an “old bastard” like you!
Yep, you can guess only a family member would be so ‘honest’ but like all things controversial, it got me thinking.
Jack Bogle, the founder of Vanguard, who has done the most worldwide to encourage investors to put their money into index funds or exchange traded funds, died age 89. He worked out that most investors aren’t great at impersonating fund managers so he educated non-professionals to buy the whole stock market rather than one stock! He worked out that a majority of fund managers don’t beat the overall stock market index, so he created products that gave investors access to the whole market.
“In his early years, Jack was frequently mocked by the investment-management industry,” wrote Warren Buffett in his 2016 letter to shareholders, “Today, however, he has the satisfaction of knowing that he helped millions of investors realise far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”
And it also worked for Jack, as Vanguard has, wait for it, over $US5 trillion and anyone who ignored Jack since 1976 when he created his first index fund, has missed out on a pretty easy way to get richer!
My favourite chart comes from Vanguard and shows what happens to $10,000 between 1970 and 2009, which was one year after the GFC when the stock market plunged 50%. Even with that, the $10,000 snowballed into $453,165! Just follow the blue line. And if you invested in the USA, the yellow line says $10,000 there rolled into $601,747! (This was based on simply rolling all dividends back into an index fund based on the Oz or US stock markets.)
One man who would’ve been a Jack Bogle fan was the AFR’s legendary business and finance journalist/editor, Barrie Dunstan, who later in life, after leaving the Fin, wrote for my Switzer Report. He passed away this week at age 80 but has left behind possibly millions of Australians who were either directly educated by him through his writings or indirectly by others who learnt from him and then passed it on to others. These people include financial planners, brokers, fund managers and other financial industry workers.
If you unluckily never got to be influenced by Barrie, check out this tribute by the AFR’s Ben Potter at and of course, his great work for Switzer can be found at , where we were honoured to work with him.
I learnt a long time ago, after years of interviewing and analysing the great business and money minds of Australia and the world, who’ve I’ve been lucky enough to hang out with, that age has nothing to do with learning stuff that can make you better, stronger, smarter and more of a winner rather than an also ran!
I have learnt from the young and that was a lesson my son Alex taught me six years ago, when Miranda Kerr offered to do the front cover of our magazine, Russh. Being a Gen Y’er, Al said if we have Miranda for a photo shoot, why not video the shoot and put it on the Internet? It was a great idea that attracted a lot of downloads and wasn’t something my skillset at the time would’ve come up with.
I have also learnt from an octogenarian in the form of the father of lateral thinking, Edward de Bono, who explained to me the common characteristic of high achievers is that they think outside the square. Edward was the fastest thinker I’ve interviewed and was not only challenging me with his answers but you could actually see him challenging himself. The experience of what I learnt still lives with me today and has become the filtering system that I use when I look at any new business idea.
It seems to me that even a millennial football coach could learn a thing or two from Steve Hansen, the 59-year old coach of the all-conquering All Blacks, especially as his win/loss record in 2017 was 91%!
I don’t think many 20-something carpenters would know more than a 50-something chippy and I don’t think a 20-something brain surgeon would have the wood over a 50-something rival. Sure, the youngsters could have some specialties that their older colleagues could learn from but I know when it comes to financial planning, age and time in the game helps you understand the many varied types of people and families who are out there and what questions, as an adviser, you have to ask to get a full understanding of your client.
It seems to me that age discrimination is the last taboo that we need to get rid of, just the way we have worked towards ending discrimination on the basis of sex, race and creed. Age should not be seen as a barrier or as a reason to discard a human being and devalue their input. In the billions of years that earth has existed, how little difference really is there between someone who is 40 and someone who is 70? Not much!
A young person can become a great adviser but he or she will learn from older more experienced campaigners and hopefully they will learn about honesty, integrity and doing the best for their clients.
Soon I will be releasing a book that I’ve been promising to publish for too long but I wanted it to be something special that will teach all Aussies the important lessons about really building wealth that I’ve picked up from legends (both old and young) that will hopefully mean that those who follow my guidance will avoid money mistakes and will position themselves to end up richer, literally, from the experience!
And I really hope my age doesn’t stand in the way of younger people getting rich but I guess only time will tell.
Stand by and watch this space.