Jack Bogle didn't look like a revolutionary. He looked like exactly what he was: a tall, lean, somewhat austere man from New Jersey who spent most of his life in suits. Yet, he spent decades screaming into the void that the entire financial industry was essentially a "croupier's game" designed to pick your pocket. He wasn't some anarchist; he was the guy who founded Vanguard.
If you've spent any time on Reddit's r/Bogleheads or listened to a finance podcast lately, you've heard his name. But honestly, most people get the "common sense" part wrong. They think it's just about buying a low-cost fund and forgetting it. It’s actually more of a psychological war.
The Brutal Math of the Croupier
Imagine you’re at a casino. Every time you win a hand, the house takes 2%. If you play long enough, you could win every single hand and still walk out broke. This is basically how Bogle viewed the mutual fund industry of the 1970s and 80s.
He didn't hate active managers because they were stupid. He hated them because they were expensive.
John Bogle common sense investing is built on a radical, almost annoying truth: In investing, you get what you don't pay for. Most of the "experts" on CNBC are selling you the idea that they can find the needle in the haystack. Bogle’s response? Buy the whole damn haystack. By owning a broad-market index fund, you aren't trying to beat the market. You are the market. And since you aren't paying a team of Ivy League MBAs to trade stocks every Tuesday, you keep the difference. Over 30 years, that 1% or 2% fee difference doesn't just buy a nice car—it’s often the difference between retiring at 55 or working until you’re 75.
Why "Common Sense" is Harder Than It Looks
It sounds easy. Buy the S&P 500. Hold it. Done.
But have you ever actually watched your life savings drop 30% in three weeks?
In 2008, and again during the 2020 crash, "common sense" felt like insanity. Bogle’s famous advice was "Don’t just do something, stand there!" Humans are wired to run away from fire. When the market is burning, every instinct in your lizard brain is screaming at you to sell everything and hide under a mattress.
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Staying the course—one of Bogle’s 10 core rules—is a test of character, not intelligence.
The Bagel and the Doughnut
Bogle used a funny analogy to explain market returns. He called the real business of companies (the earnings and dividends) the "bagel." It’s nutritious, stable, and builds wealth over time. The "doughnut" is the speculative part—the P/E ratios and the "hype" that makes stock prices swing wildly based on whether people feel good or bad today.
Most investors spend their lives chasing the doughnut. They want the sugar rush. Bogle wanted you to eat the bagel.
The 10 Rules Most People Ignore
Bogle wasn't just about index funds; he had a specific framework for living your financial life. He laid these out in The Little Book of Common Sense Investing, and they’re still mostly ignored by people chasing the next AI-themed ETF.
- Remember Reversion to the Mean. If a sector (like Tech in 2024 or Energy in 2022) is screaming upward, it’s probably going to crash back to earth eventually.
- Time is your friend, impulse is your enemy. Compounding is a miracle, but it's a slow one.
- Buy right and hold tight. Once you have your allocation, stop tinkering with it.
- Have realistic expectations. You aren't going to make 20% every year.
- Forget the needle, buy the haystack. 6. Minimize the croupier’s take. Every penny in fees is a penny you’ll never see again.
- There’s no escaping risk. Even cash loses value to inflation.
- Don't fight the last war. Just because gold did well in the 70s doesn't mean it’s the answer now.
- The hedgehog beats the fox. The fox knows many things; the hedgehog knows one big thing (low costs + time).
- Stay the course.
The Paradox of Vanguard
There is a bit of irony here. Bogle founded Vanguard, but he actually grew quite critical of what it became later in his life. He wasn't a huge fan of ETFs (Exchange Traded Funds), for example. Why? Because you can trade them all day long.
He thought the ability to buy and sell an entire index in three seconds on a phone app encouraged the very "speculation" he hated. He preferred the old-school mutual fund where you'd have to wait until the end of the day to trade. He wanted friction because friction stops you from making stupid, emotional mistakes.
Is he still right in 2026?
Some critics say Bogle’s "all-US" bias is a mistake now. They argue that the world is more globalized and you need international exposure. Others say that with zero-commission trading, the "croupier" isn't as greedy as he used to be.
But honestly, the core of John Bogle common sense investing is evergreen. Whether commissions are zero or not, the internal cost of a fund and the taxes generated by high turnover will still eat your lunch.
How to Actually Apply This Today
If you want to follow the Bogle way, you don't need a PhD. You basically need a mirror to see if you can handle the reflection when things get ugly.
First, check your expense ratios. If you are paying more than 0.15% for a broad equity fund, you're probably being robbed. There are funds out there charging 0.03% or even 0%.
Second, look at your turnover. If your fund is buying and selling its entire portfolio every year, it’s generating a massive tax bill for you (unless it's in a 401k or IRA).
Lastly, simplify. Most people have "portfolio clutter"—six different growth funds, three tech ETFs, and some random crypto. Bogle would tell you to sweep all that junk into one Total Stock Market Index fund and one Total Bond Market Index fund.
It’s boring. It’s supposed to be boring. As Bogle once said, if you want excitement, go to Las Vegas. Investing should be as interesting as watching paint dry or watching grass grow.
Next Steps for Your Portfolio:
- Audit your fees: Go through your brokerage statement and find the "Expense Ratio" for every fund you own. If it starts with a decimal and anything higher than a 2 (e.g., 0.50%), look for a cheaper alternative.
- Set a "Sleep Test" allocation: If you can't sleep when the market drops 10%, you have too many stocks. Add more bonds until you can sleep.
- Automate your boredom: Set up an automatic transfer from your bank to your index fund. Don't look at the balance. Just let the "hedgehog" do its thing.