It’s Never Too Late

The following is a true story from The Little Book of Common Sense Investing  by John Bogle (p.214). We recommend this story to anyone who thinks it’s too late to get started.


A few years ago, John Bogle received a letter from a Vanguard shareholder who did not start investing until age 55 with just $500. Additionally, he never earnt more than $25,000 pa. During his time, he invested in the Vanguard 500 index fund, total stock market index fund, several managed equity funds and taxable and tax-exempt bond funds, and a diversified list of individual stocks.


The Vanguard shareholder wrote in his letter:


“Most of my shares were purchased when you (John) were chairman of Vanguard. I am 85 years old and had never earned more than $25,000 a year. I started investing in 1974 with $500. I have only ever bought, never sold. I remember when things were not going well and your advice was stay the course”


He enclosed a list of his investments at the start of 2004: Total value, $1,391,407!


Remember this investor started with just $500 at age 55, never earning more than $25,000 pa.


If he received a 5% yield on his investment, his annual gross income would be $69,570 pa.