My parents instilled good values in me that I try to pass down to my kids. One of these values is thriftiness. When we were growing up, an attic fan cooled us off on warm summer evenings. We reserved the air conditioning for unbearably hot days. When we did run the air, we were sure to close the door behind us so that we didn’t cool off the neighborhood. My dad also seemed to have a sixth sense for detecting lights that didn’t need to be on. Paying attention to these details helped our family keep more of what we earned.
Vanguard founder Jack Bogle revolutionized the investment industry by getting investors to focus on the pernicious effect of costs on investment returns. I must have heard Bogle say, “You get what you don’t pay for” as often as I heard my dad ask me to turn off a light. Bogle’s understanding, backed by research, is why minimizing costs is one of the four Vanguard principles for investing success.
