Enough: True Measures of Money, Business, and Life

Introduction

At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,Yes, but I have something he will never have . . . enough.

Enough. I was stunned by the simple eloquence of that word—stunned for two reasons: first, because I have been given so much in my own life and, second, because Joseph Heller couldn’t have been more accurate. For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails.

We live in wonderful and sad times—wonderful in that the blessings of democratic capitalism have never been more broadly distributed around the globe, sad in that the excesses of that same democratic capitalism have rarely been more on display. We see the excesses most starkly in the continuing crisis (that is not an extreme description¹) in our overleveraged, overly speculative banking and investment banking industries, and even in our two enormous government-sponsored (but publicly owned) mortgage lenders, Fannie Mae and Freddie Mac, to say nothing of the billion-dollar-plus annual paychecks that top hedge fund managers draw and in the obscene (there is no other word for it) compensation paid to the chief executive officers of our nation’s publicly held corporations—including failed CEOs, often even as they are being pushed out the door.

But the rampant greed that threatens to overwhelm our financial system and corporate world runs deeper than money. Not knowing what enough is subverts our professional values. It makes salespersons of those who should be fiduciaries of the investments entrusted to them. It turns a system that should be built on trust into one with counting as its foundation. Worse, this confusion about enough leads us astray in our larger lives. We chase the false rabbits of success; we too often bow down at the altar of the transitory and finally meaningless and fail to cherish what is beyond calculation, indeed eternal.

That message, I think, is what Joseph Heller captured in that powerful single word enough—not only our worship of wealth and the growing corruption of our professional ethics but ultimately the subversion of our character and values. And so that’s where I want to start, with what I know best: how my own life has shaped my character and values, and how my character and values have shaped my life. As you will see, I’ve been given enough in countless ways.

Growing Up

Perhaps the best place to begin is with my heritage: heavily Scottish, which may be enough to explain my apparently legendary thriftiness. The Armstrongs—ancestors of my grandmother on my mother’s side—came to America from Scotland in the early 1700s to farm here (a wonderful reminder that nearly all of us are descendants of immigrants). I’ve always thought of my great-grandfather—Philander Banister Armstrong—as my spiritual progenitor. He was an industry leader, but did his best to reform first the fire insurance industry (in an 1868 speech in St. Louis, he implored, Gentlemen, cut your costs), and then the life insurance industry. His spirited 1917 diatribe—258 pages long—was entitled A License to Steal: How the Life Insurance Industry Robs Our Own People of Billions.The final sentence: The patient [the insurance industry] has a cancer. The virus is in the blood. He is not only sick unto death, but he is dangerous to the community. Call in the undertaker.

The Hipkins family—my mother’s family—were Virginians who also came to America early in the eighteenth century; some of their progeny would serve in the Confederate States Army. My Hipkins grandparents, John Clifton Hipkins (The Skipper) and Effie Armstrong Hipkins (Chick), were colorful characters who expected their three children and six grandchildren to be good citizens and to make the most of themselves.

William Brooks Bogle and his wife Elizabeth also arrived here from Scotland, but much later, during the early 1870s. Although Ellis Island was not yet the port of entry, their names are on a plaque there. Their son (and my grandfather) William Yates Bogle was a successful merchant in Montclair, New Jersey, highly respected in the community, and the founder of a company that became part of the American Can Company (which in turn became Primerica Corporation in 1987), large enough to be among the 30 stocks in the Dow Jones Industrial Average for 75 years.

His son, William Yates Bogle Jr., was my father. At the start of World War I—before the United States declared war—he volunteered to serve in the Royal Flying Corps and flew a Sopwith Camel. This dashing pilot, handsome to a fault, was said to resemble the then Prince of Wales, who became king of England in 1936 (before abdicating to marry the woman I love). My father was injured when his plane crashed, and he returned home, marrying my mother, Josephine Hipkins Bogle, in 1920.

Life was easy for the well-to-do young couple, but sadly, their first two children (twins, Josephine and Lorraine) died at birth. Their first son was my brother William Yates Bogle III, born in 1927, shortly followed by another set of twins on May 8, 1929, David Caldwell Bogle and me, John Clifton Bogle.

No Idle Hands

We were born some years after my Bogle grandfather had provided a handsome new home for the growing family in Verona, New Jersey (abutting Montclair). But the Great Crash came, and soon both my home and my father’s inheritance were gone. We moved into my mother’s parents’ house, the first of the frequent moves that were to send the struggling family up and down the Jersey coast.

So while my family began with enough—in fact, much more than enough—we soon were in difficult financial straits. (My father, having grown up surrounded by the good things of the era, lacked the determination of his father, and struggled to hold a job.) From an early age, all three boys had to earn what they got. How well I remember the constant refrain, Idle hands are the tools of the devil (pronounced, in the Scots way, divil ).

I’ve often thought that we three brothers had the perfect growing-up environment: a family with community standing and never a concern about being inferior or dis-respected, yet with the need to take responsibility for our own spending money (and even to help fund the family exchequer), the initiative to get jobs, and the discipline of working for others. While we had wonderful friends—still friends today—who had more than enough and who played while we worked, we learned early on the joy of accepting responsibility, of using our wits, and of engagement with the people (rich and far from rich alike) whom we served in our various jobs, winter, summer, spring, and fall.

Blair Academy: Come, Study, Learn

In seventh and eighth grades, we twins attended a small grammar school in Spring Lake, New Jersey; we then moved on to nearby Manasquan High School. But my mother, ambitious for her sons and deeply concerned that we weren’t getting the best of schooling, sought something much better. Through her persistence and determination, all three Bogle boys became boarding students at Blair Academy in northwestern New Jersey—an incredible opportunity to begin a fine education. It was my mother’s drive for her boys’ education that overcame our lack of money, and Blair provided us with scholarships and jobs. In my first year, I waited on tables and, as a senior, rose to the demanding job of captain of the waiters.

Blair’s motto (translated from the Latin) is Come, Study, Learn, and so I did. Pushed by demanding old-school masters who seemed to sense that I could, with great effort, excel—although the classwork was far more demanding than any I’d ever before encountered—I gradually managed to overcome my early lag in studies. At graduation, I was class salutatorian, and was voted Best Student and Most Likely to Succeed, accolades that may hint at both the determination that I still can’t seem to shake and, perhaps, the entrepreneurial spirit that would later shape my career. I’ll never forget the inspiration that I received when in my junior year I read this sentence in Thomas Macaulay’s essay on Samuel Johnson:The force of his mind overcame his every impediment.

So my attitude to what’s enough in this life, I think, has been largely shaped by my heritage and the experiences of my youth, not least among them being blessed by a strong family: proud grandparents, loving parents, and a marvelous brotherhood of three who fought with each other but were united when others wanted to take us on.

That combination might well have led nowhere; after all, the Bogle boys were hardly worse off than countless numbers of other American youths. But as I reached toward maturity and ever after, I have been blessed with infinite good fortune in my life, often of miraculous dimension. Surely my first major break was when Blair Academy accepted the responsibility for my education. Without these breaks, who knows where I’d be (indeed, as you’ll soon learn, even if I’d be) today? I have come to refer to each turn of good fortune as akin to discovering a diamond. Over the course of my life, as it has turned out, I would discover acres of diamonds.

Acres of Diamonds

In ancient Persia, a wealthy farmer leaves his home to seek even greater wealth, and spends his life in a fruitless search for a perhaps mythical diamond mine. Finally, as age and years of frustration take their toll, he throws himself into the sea and dies, an unhappy pauper far from home. Meanwhile, back at his estate, the new owner, surveying his vast acreage, sees something in a stream, something bright, glistening in the sunlight. It is a large diamond, and turns out to rest atop the fabulous Golconda mine.

This story was a special favorite of Dr. Russell Conwell, who founded Philadelphia’s Temple University in 1884. The story inspired his classic lecture, Acres of Diamonds, which he delivered more than 6,000 times, all the world over. The moral of the story: Your diamonds are not in far distant mountains or in yonder seas; they are in your own backyard, if you but dig for them.

The very first student at what would become Temple was so inspired by the speech that he came to Dr. Conwell, eager for an education but unable to pay for one. Accepted on the spot for tutelage, the man went on to rise to a position of eminence and public service. I have no trouble believing that story because when, as a young man, I first read Dr. Conwell’s lecture, its message also inspired me, even as it continues to inspire me today. And all of those fortunate discoveries of one diamond after another took place right in my own backyard, in a city in which I’d never before set my foot.

Coming to Philadelphia

It was just before Thanksgiving of 1945, shortly after the end of World War II, when this young resident of New Jersey first arrived in Philadelphia. My late twin brother, David, bless his soul, was with me; we were two 16-year-old boys getting off a bus from Blair Academy, coming to the City of Brotherly Love for the first time to celebrate the holiday with our mother and father. Our parents (my older brother, William, then 18, was serving in the U.S. Marine Corps) had recently moved into two rooms on the third floor of a modest home in suburban Ardmore, but the tiny space was enough for all of us—at least for the holidays. We ate our dinners at the small Horn & Hardart’s restaurant around the corner. Later, when I was on vacation, I worked the graveyard shift at the Ardmore Post Office.

I found my first diamond, if not quite in Philadelphia, nearby. Through the extraordinary preparation for college that Blair Academy had given me, I gained admission to Princeton University. To make it financially possible for me to attend, the university offered me both a full scholarship and a job waiting on tables in Commons. (A waiter yet again—I must have been good at it!) In later years, I worked at the Athletic Association ticket office, managing one of its departments during my junior and senior years.

With a series of summer jobs (one as a runner in a local brokerage firm; another as a reporter on the police beat for the Philadelphia Evening Bulletin), I was able to earn the remaining money I needed. I worked very hard, and the hours were long. But I loved hard work then—I still do—and I grew up with the priceless advantage of having to work for what I got. But in my long career I don’t ever recall thinking of work as work, with one exception: a stint as a pinsetter in a bowling alley (now there’s a truly Sysiphean job!).

At Princeton, a Discovery

While I was studying at Princeton, my parents’ marriage fell apart. My father moved to New York, and my beloved mother, terminally ill, remained in Philadelphia. I wanted to return there to be with her after my graduation in 1951, and fate intervened to make it possible. (Sadly, her life ended in 1952.)

At Princeton, this callow, idealistic young kid with a crew cut had determined to write his economics department senior thesis on a subject on which no earlier thesis had been written. Not John Maynard Keynes, not Adam Smith, not Karl Marx, but a subject fresh and new. What but fate can account for the fact that in December 1949, searching for my topic, I opened Fortune magazine to page 116 and read an article (Big Money in Boston) about a financial instrument that I had never heard of before: the mutual fund. When the article described the industry as tiny but contentious, I knew that I had found my topic and, though I couldn’t know it at the time, another diamond as well.

After a year of intense study of the mutual fund industry, I completed my thesis and sent it to several industry leaders. One was Walter L. Morgan, mutual fund pioneer, the founder of the Philadelphia-based Wellington Fund and member of Princeton’s class of 1920. He read my thesis and liked it sufficiently that he would soon write: A pretty good piece of work for a fellow in college without any practical experience in business life. Largely as a result of this thesis, we have added Mr. Bogle to our Wellington organization. I started right after my 1951 graduation (magna cum laude, thanks largely to my thesis) and never looked back. I have worked there—one way or another, as you will soon see—ever since.

I have no way of knowing whether it is true, as some of his closest associates told me after his death, that Walter Morgan thought of me as the son he never had. But he was like a father to me. He became my loyal and trusted mentor, the man who gave me the first break of my long career. More, Mr. Morgan was my rock, the man who had confidence in me when I had little confidence in myself, the man who gave me the strength to carry on through each triumph and tragedy that would follow.

When I joined Wellington Management Company in 1951, it was an important company in a tiny industry, and managed a single mutual fund (Wellington Fund) with but $150 million in assets. But we were growing rapidly. By the early 1960s, I was deeply involved in all aspects of the business and soon became Walter Morgan’s heir apparent. Early in 1965, when I was just 35 years old, he told me I would be his successor as the leader of the firm. Yet another diamond! Although many other diamonds still lay hidden in the earth beneath me, undiscovered, the company was in troubled straits, and Mr. Morgan told me to do whatever it takes to solve our investment management problems.

A Door Slams; a Window Opens

Headstrong, impulsive, and naive, I found a merger partner—in Boston, of all places—that I hoped would help me do exactly that. The merger agreement was signed on June 6, 1966. With an ebullient bull market in stocks on our side, the marriage worked beautifully through early 1973. But when the bear market came and the stock market tumbled (a decline that would ultimately slash stock prices by 50 percent), both the