HOW I DID IT
The Vanguard Group
How “Saint Jack” took on
an industry—and won
As a student at Princeton, John Bogle wrote his thesis about the mutual-fund
business, at the time a Wall Street backwater. Upon graduation, he joined one of the
oldest firms in the field—and proceeded to become the most creative disrupter the
industry has ever known. In 1974, he founded the Vanguard Group, whose unique
approach to fund management has saved shareholders hundreds of billions in fees;
that and his righteous denunciations of his industry’s sharper practices earned Bogle,
83, the grudging nickname “Saint Jack.” Vanguard is now the largest fund group
in the U.S., with 13,000 employees and $1.9 trillion under management.
AS TOLD TO ERIC SCHURENBERG / Photograph by Chris Crisman
I’m not sure I really am an entrepreneur.
I’m not much of a businessman. I know
I’m not a marketing guy. I do have an
entrepreneurial lineage, though. My
grandfather was a wealthy and respected
merchant in Montclair, New Jersey,
where I was born. But his estate was
wiped out in the Great Depression, and
as a result, I had what I consider the ideal
upbringing: We were a proud family,
good citizens, and we didn’t have a sou.
Vanguard never would have happened if
I hadn’t been fired as CEO of Welling-
ton Management Company, the firm
that did the investing for the Wellington
fund and eight sister funds. In 1966, I
had merged the company with a high-
flying group of whiz-kid traders from
Boston. I cringe to say it today, but I
thought their hot performance would
be permanent. I was naive, overconfi-
dent, full of every kind of bad attitude.
The whiz kids’ streak whizzed out, as it
inevitably had to, in the recession of
1973–74, and the fund fell by 50 per-
cent. In January of ’ 74, I was fired from
the company I considered my own.
I looked into finding another job, but I
concluded my best move was to fight
back. I went to the fund’s board and
proposed that it and its eight sister
funds split from WMC and start a
new company to oversee the funds.
The new company would be owned
by the funds—it wouldn’t have to
make a profit and for that reason