The Little Book of Common Sense Investing
John C. Bogle
The case for low-cost index funds, from the person who did more than anyone to make them available. Short, persuasive and still relevant.
By uFIRE ·
What the book is about
The author founded Vanguard and launched one of the first index funds for ordinary investors, so this is the argument for indexing from its most famous champion. His main point is simple: investors as a group earn the market's return before costs, so after costs, the average investor must earn less. Owning the whole market cheaply puts you ahead of most people who try to beat it.
The book backs this up with long-run comparisons of fund costs and returns, explains how fees, trading and taxes quietly eat into results, and warns against chasing last year's winning funds.
Who it's for
Anyone deciding how to invest retirement savings, and anyone being sold a high-fee product who wants to understand what the fees really cost over decades.
Maybe skip it if: Readers who've already read a couple of index investing books. You'll know most of the argument, and it repeats itself.
What we liked
- The cost argument is clear and hard to unsee. Small differences in fees add up to large amounts over a working life.
- It's genuinely short. You can read it on a couple of evenings.
- The author is open about his own connection to the industry, which we appreciate.
What we'd push back on
- It's written by someone with a strong stake in the idea. The argument holds up, but read it knowing that.
- It's mostly about funds. It doesn't help much with the rest of a plan: savings rate, debt, insurance or when to stop working.
- Some chapters repeat the same point with different numbers, so feel free to skim.
Takeaways
- Costs are one of the few things in investing you can control.
- Broad, low-cost index funds are a strong default for most long-term savers.
- Be wary of chasing whichever fund did best recently.
Want to read it?
Check your local library first. Many lend e-books and audiobooks you can borrow from home. If you'd like your own copy, it's easy to find.
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Education only. These are our opinions about a book, not advice. uFIRE is for education only. Nothing here is financial, investment, tax, legal or insurance advice. uFIRE does not sell insurance or investments. Please check any money, tax or insurance decision with a licensed professional.