Enough: True Measures of Money, Business, and Life

Enough True Measures of Money, Business, and Life by John C. Bogle (based on 16 customer reviews)

(Hardcover)
Author: John C. Bogle
Publisher: Wiley

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Most useful review as voted by customers:
31 out of 39 people found the following review helpful.
Review Date: 11/2/08

When is it enough?

Enough is an unusual book and a suitable wake-up call for Americans. It's unusual because it's written by John Bogle, a man who has spent his career helping people build wealth through investments. You might think his message is, "it's never enough," but it's far from it.

Bogle's effort is dedicated to responsible investing and avoiding a life spent running blind with dollar signs in your eyes. Bogle takes care in describing what "enough" is, and how we can follow his insight to use this understanding to live more fulfilling professional and personal lives (and be more responsible investors).

Another book I recommend because I've enjoyed it immensely and benefitted greatly from it as I adjust to our freefalling economy is The Emotional Intelligence Quick Book

28 out of 38 people found the following review helpful.
Review Date: 11/6/08

An Astute Diagnosis of Our Embattled Financial System

Jack Bogle's timing could not have been better; Enough has burst onto the scene just when it was needed most.

America's financial system is clearly broken, and if we are wise and lucky, the next administration will repair it successfully. This book is required reading for anyone involved in the process, and for anyone who cares about the nation's future.

Bogle's credentials in this regard are beyond question: having founded the nation's second-largest mutual fund company, instead of cashing in he "mutualized" it and turned it over to its mutual-fund customers. His astute observations of our financial system, acquired in his half-century at the heart of the country's markets, shine through in every page of tightly written prose.

The book's title itself is premised on the punch line from a delightful Kurt Vonnegut/Joseph Heller story. It then goes on to describe the unchecked excesses in investment company fees, in speculation masquerading as diversification and innovation, in the salaries of top executives, in salesmanship, and most importantly, in the role played by the financial industry in our national economy and national life. Each of these excesses gets its own chapter, and each one is a gem.

This book, with its emphasis on investing simplicity, will pay dividends to the reader's bottom line as well.

Enough already: buy this book. It will reward you philosophically, financially, and morally.

28 out of 37 people found the following review helpful.
Review Date: 11/6/08

Our insatiable desire for more

The seemingly insatiable Wall Street desire for more, combined with look-the-other-way regulators, has landed the U.S. in financial crisis. In Jack Bogle's latest book, Enough, you can read it thinking about the current pickle we find ourselves in and you will understand why it happened. He does a great job of explaining why there has never been a better time to learn individually, and as a country, when enough is enough.

This book delves into the perfect storm of investing created by costs, speculation, and complexity. It examines the folly of a business paradigm that focuses on the short-term bottom line; where business conduct and management becomes all about the sale, no matter what the cost.

In life we often seem to define our success by the material possessions we have amassed. The "he who dies with the most stuff, wins" philosophy dictates that somehow this will make us a happier person. Jack Bogle puts such a philosophy in perspective by reminding us that being the richest person in the graveyard shouldn't be our goal.

Enough is engaging and thought-provoking, and offers practical insights that extend beyond investing and business into life itself Jack Bogle clearly could have been a billionaire had he founded Vanguard as a for-profit entity. I suspect he must have realized far earlier than I did that there is more meaning to life than the accumulation of money.

Personally, what I can't get ENOUGH of are the insights from Jack Bogle. Simple and obvious though they may be, sometimes life gets too busy to see what is right in front of our faces. And what's right in front of our faces in Enough, is common sense.

8 out of 10 people found the following review helpful.
Review Date: 11/14/08

Outstanding and Very Timely!

An excellent overview of what ails American society today.

Bogle begins by noting that the world of finance is marked by too much cost and not enough value, too much speculation and not enough investment, and too much complexity. On balance, the financial system subtracts value from our society. During 2006 the financial sector accounted for $215 billion of the $711 billion earned by the S&P 500, more if earnings of financial subsidiaries (eg. G.E. Capital) are included).

Bogle then explains some of the problematic new devices. Structured investment vehicles (SIVs) are essentially money market funds that borrow short and lend long. Solvency of the SIV may be at risk if the value of the long-term security falls below that of the short-term securities. Second, there is a liquidity risk, possibly necessitating a forced sale of the long-term asset. To sell SIVs, banks often issue "puts" - guarantees to repurchase the SIVs at face value on demand. (Citigroup ended up holding $55 billion of CDOs and $25 billion of SIVs that were "put" back to the bank.

Collateralized debt obligations (CDOs) are a modern version of alchemy - eg. 5,000 B- or BBI rated mortgages (lead) are miraculously turned into eg. 75% rated AAA (gold), 12% AA, 4% A, and 9% BBB through supposedly risk-reducing diversification.

An interest-rate derivative's (estimated $400 trillion, vs. the world's GDP of $62 trillion) underlying asset is the right to pay or receive a (usually notional) amount of money at a given interest rate. An estimated 80% of top companies use these to control their cash flow.

Credit Default Swaps are often used to provide coverage for a CDO failing to pay. They are unregulated (unlike insurance) and one doesn't need an insurable interest (eg. CDO ownership). In the current market, credit obligations subject to default swaps are valued at $2 trillion, vs. swaps totaling $62 trillion.

Fannie Mae and Freddie Mac have provided some $5 trillion of mortgage loans, using high leverage (eg. 40:1). Faced with a credit crisis the Treasury placed them in a federal conservatorship. (Bogle laments we have privatized rewards, socialized risks here.)

Bogle also believes most mutual funds underperform the market. During the 25 years ended 2005, fund investors on average received a 482% increase, vs. index fund returns of 1,718%. Their survival rates are nothing to brag about either - of the 6,126 mutual funds at the start of 2001, 3,165 were gone by mid-2008.

Bogle then moves on to business (mis)finance. At the market peak of early 2000, nearly all firms raised their assumptions of return on pension assets, some to 10% (actually 1% or less this decade). Security analysts over the past two decades have, on average, projected annual earnings growth of 11.5%, vs. reality of 6%. Recently earnings reported under GAAP have quietly changed to "operating" (without writeoffs) earnings, and auditor-certified earnings restatements soared from 90 in 1997 to 1,577 in 2006.

Why has Avis been sold 18 times since its 1946 inception, each time with fat fees, bonuses, and new theories? Not for any useful reason, per Bogle. Meanwhile, the average compensation of a CEO vs. average worker has risen from 42X in 1980 to 520X; mutual funds hold about 35% os all U.S. stocks.

4 out of 4 people found the following review helpful.
Review Date: 12/5/08

Not Everything That Counts Can Be Counted

Well-known mutual fund pioneer John Bogle (founder of Vanguard and the index fund) uses Enough to explain how the financial markets got into the current mess, to prescribe the need to reinstate character and stewardship into those who lead, and to suggest that piling up more money, toys, and baubles causes more harm than good.

I particularly liked the sections where Mr. Bogle explained that making the financial markets more complicated and expensive simply makes the average American less wealthy. His analysis and descriptions are right on.

My next favorite section was in describing the kind of leader that Benjamin Franklin was in innovating as an inventory, social entrepreneur, statesman, and businessman. Those who don't know about Franklin will find this information to be very inspiring.

I also applaud his clear emphasis on the idea that money doesn't count compared to character and doing the right thing.

The book has a few weaknesses that might bother a few readers. There's perhaps a little too much emphasis on what Vanguard has done over the years, making the book seem almost like an infomercial after a while. Although he points out to what needs to change, the prescriptions for change are pretty modest. As long as many people can never have enough, they will be lured into dangerous, expensive investment vehicles and actions that "cut corners" that shouldn't be cut. He doesn't really address the question of how much people should be saved from themselves by banishing certain practices (such as charging fees for funds of funds or the current structure of how hedge fund managers are paid).

In my own research on stock options, I've identified highly ethical, intelligent management teams that were distracted by as little as the chance to make an extra two million dollars a person over several years. As a result, I doubt if many of the problems he's concerned about can be solved by anything less than much stronger regulation than has ever existed in corporate America.

If the alternative is for people to reform themselves, we may have along wait before ethical, effective behavior improves. Since most people learn good behavior in the home, which of the unethical, money-obsessed leaders are going to raise the children who will develop and behave according to good character in being stewards of other peoples' interests?

3 out of 4 people found the following review helpful.
Review Date: 11/16/08

After reading the book one will probably sit and reflect over what has been said.

This book was a fun read. It is small and not too long. In fact, it was short. If it had been formatted a little differently it probably could have been sold as a pamphlet instead of as a book. But I liked it.

As I examined the Table of Contents, something you can see if you go to the Search Inside that Amazon offers, I got the feeling I was reading a book from some old timer who considered himself mature, knowledgeable, and a fairly smart guy. Oh yeah, maybe full of wisdom, too? :)

As I turned the pages I kept thinking about the old line I heard growing up: Son, as long as you do your best, that is all we can ask for. Well, who is to say - What is my best? As far as I am concerned, I can always throw in a little extra effort and do better.

So who is to say - What is enough? The author tries to explain it. But I thought he fell short. He fell short in the same way my folks fell short when they told me I only had to do my best. When terms are relative they are not easily defined. And a book devoted to defining a term that is basically undefinable is bound to be viewed as a failure or at least come up short. This book is not a failure I will have you know.

The book makes a valid point. When determining what is enough the judge (maybe you?) must perform a balancing test. You'll have to figure out what is too much, and what is not enough. And whatever you determine is "just right" IS enough. The author provides us with 10 chapters split into three parts: Money (chapters 1-3), Business (chapters 4-7), and Life (chapters 8-10). He makes some good points. And after reading the book one will probably sit and reflect over what has been said. But does it do a good job defining the term? I think not. 4 stars!

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