“I love the English language,” Vanguard founder John Bogle once said. “Words have power.”
Yes, words do have power and Bogle’s powerful words launched an investing revolution that changed the lives of millions of individual investors. Bogle, the pioneer who created the first index mutual fund, passed away this week at the age of 89.
Search for the title “Common Sense” on Amazon and the first book to appear was written by the American revolutionary writer, Thomas Paine. The second book—The Little Book of Common Sense Investing— was written by John C. Bogle. Both books are perennial bestsellers and, remarkably, Paine’s book, written 230 years earlier, inspired Bogle to start his own revolution.
It’s no coincidence that Bogle used the phrase “Common Sense” to explain his writing and investment strategy. In The Little Book, Bogle gives credit to Thomas Paine for influencing the way he articulated the idea behind simple, low-cost index fund investing.
“New ideas that fly in the face of conventional wisdom of the day are always greeted with doubt and scorn, even fear,” Bogle wrote. In 1776, Paine’s “powerful and articulate arguments” carried the day, Bogle noted. Echoing some of Paine’s exact words, Bogle wrote, “Similarly, I believe that in the coming era, my own simple facts, plain arguments, and common sense will carry the day for investors.”
Bogle called his pioneering idea The Index Revolution.
In a speech that Bogle gave— appropriately, in Philadelphia—he said Paine’s writing “emboldened” him to articulate and share his simple philosophy for investors around the globe. Bogle said, “Our basic idea was to have the mutual funds themselves responsible for their own governance and administration—after all, that’s what independence was all about for the funds in 1974 even as it was for the colonies in 1776. By taking this step, we broke new ground in the fund industry.”
Bogle then credits “the power of the right words to shape the way investors look at us, and the way we look at ourselves.” Bogle says he was acutely aware of the impact that certain words had on the people at Vanguard and the investors they served. For example, Bogle replaced the word “employee” with “crewmember.” He replaced “customers” with “clients.” He replaced “products” with “mutual fund.”
In his book, On Investing: The First 50 Years, Bogle wrote that his “passion for the words of our splendid mother tongue” was reflected in his writing. “It occurs to me that, after the huge output of writing I’ve produced over the years, there is a close link between my twin careers as investment executive and financial writer: The power of the word and the power of the book have played a major role in turning my vision…into reality.”
Bogle concludes the book’s introduction with an observation every leader, in any field, should take to heart. “It is the power of words and books—explaining and dramatizing great ideas and articulating high ideals—that is the greatest weapon in the missionary’s arsenal.”
Bogle’s missionary zeal to articulate a ‘deceptively simple’ idea changed the way Americans invest. It was Bogle’s hope that “the gospel continues to spead.” Given the outpouring of emotion after his passing from CEOs, business titans, and devoted “Bogleheads,” there seems to be no question that his message has been received.