Review: Enough: True Measures of Money, Business, and Life

Every other Sunday, The Simple Dollar reviews a personal finance book.

enoughRather than being a typical personal finance “advice” book, Enough is more of a summary of the life philosophy of John Bogle, the founder and former CEO of the Vanguard Mutual Fund Group and the biggest proponent of index funds in the world.

Bogle’s main argument in this book is that the reason people run into trouble in life, in money, and in business is because they’ve lost touch with what exactly is “enough” in their lives. They continually seek more, more, more without considering whether or not they’ve actually already achieved the things they want to achieve, and in that chase, people often lose touch with what’s most important to them, their career, and their lives.

Bogle applies this philosophy to quite a wide range of areas in this book, ranging from personal finance management to business practices and also aspects of personal life. Because of this wide range, it often ventures outside the realm of a typical personal finance book, but is it still a worthwhile read? Let’s dig in and find out more about what Bogle has to say.

A Walk Through Enough

1. Too Much Cost, Not Enough Value
Bogle opens the book by arguing that the real measure of any investment is not in how much it costs you, but in how much value it provides for you. For example, many people compare mutual funds simply by looking at the raw costs on paper, but don’t step back to ask big questions like what exactly the investments represent. Are these investments in line with my personal values or am I just seeking the biggest bang for the buck? Chasing the biggest bang for the buck might help in the short term, but it leads to a very destructive system over the long term.

2. Too Much Speculation, Not Enough Investment
Seen any bubbles lately? Housing? Dot-com? Bubbles are the result of speculation, in which people run in with their cash hoping simply to score a quick buck, but eventually the bottom drops out and people are left holding the bag. The solution? Look for long-term investments that you’re happy to own no matter what’s happening in the market in general – things like blue chips that you know well or broad-based index funds.

3. Too Much Complexity, Not Enough Simplicity
This chapter might as well have been written about the recent banking crisis, which was based on a house of cards made up of investments so complicated that the investors didn’t really know what they were buying. Instead of chasing mirages in the desert, one is usually better off seeking out choices that are much simpler. Simplicity merely means that you actually understand how it works and can actually judge the risks for yourself, like a stock in a company you know.

4. Too Much Counting, Not Enough Trust
Bogle argues here that over time, business culture has evolved into one where participants do not trust each other much at all and instead focus entirely on numbers and metrics to judge each other. Although I can understand this lack of trust – I myself often have a hard time trusting many businesses because I feel they act unethically – Bogle lays the blame for unethical behavior on an environment where individuals and companies don’t extend any trust to one another. It’s definitely an interesting way of examining the current state of trust in business.

5. Too Much Business Conduct, Not Enough Professional Conduct
Here, Bogle argues that people in far too many professions have adopted a business-like code of attempting to maximize their earnings at all costs. In fact, Bogle tends to believe that if an individual subscribes firmly to a professional code of conduct and genuinely seeks to produce value with their time and effort, the appropriate rewards will eventually come to them.

6. Too Much Salesmanship, Not Enough Stewardship
Ever noticed the huge number of mutual fund ads in your average personal finance magazine? Ever been in the office of an investment advisor who spends his time shilling to you on behalf of whatever fund is providing him kickbacks? Bogle condemns both of these things, stating quite clearly that neither one provides genuine long-term value for investors or shareholders. You might be able to boost numbers over the long term, but by spending all of your time selling, you spend little of your time actually managing things, and the investment you’re trying to sell becomes a lemon – and your customers will have a bad taste in their mouths.

7. Too Much Management, Not Enough Leadership
Managers administrate, leaders lead. Managers micro-manage, leaders provide general direction and let the dogs run. See the difference? Bogle argues that as companies grow, they tend to accumulate managers – leaders tend to always rise to the top, but the middle ranks fill with people that just try not to rock the boat. That leads to stagnation throughout the organization. How can you avoid it? Build a culture from top to bottom that encourages innovation, hard work, and creativity.

8. Too Much Focus on Things, Not Enough Focus on Commitment
Think about it this way: which person would impress you more at first glance, the well dressed individual driving a Lexus or the individual who has devoted all of his free time to building a great community project? Unfortunately, it’s often the former person that gets the attention, even though the latter person is the one who has actually brought about profound change and positive growth in the community. That seems backwards to me, and Bogle shares that sentiment.

9. Too Many Twenty-First-Century Values, Not Enough Eighteenth-Century Values
For the most part, this chapter boils down to patience. Most of the “21st century values” that Bogle discusses really revolve around a lack of patience – we need things now and we don’t like to wait. Bogle argues that patience in one’s personal life is almost always rewarded – a great book, a well-established relationship, a long-term project. However, in our day to day lives, it’s often hard to see the value in such things when there is so much at our fingertips.

10. Too Much “Success,” Not Enough Character
We are often impressed by people who have built success for themselves: a booming business, a great career, a “perfect” life. Unsurprisingly, these are the trappings of success that people chase with all of their might. Unfortunately, along the way, things are sacrificed: parents are busy working and don’t spend time with their children, important personal and community projects are left on the sidelines, and relationships wane because they don’t provide immediate value. Bogle argues that character – building strong relationships and fulfilling commitments – is the real backbone of life, not success.

Some Thoughts on Enough
Here are three things I think I think about Enough.

Bogle thinks long term over and over again. That’s really the theme of the entire book. We get stuck in the short term and often make choices that sacrifice the long term in favor of immediate benefits. Quite often, that’s the wrong choice – and we wind up regretting it.

Anecdotes work. Almost every page in this book has an anecdote of some sort – and it’s perfect for this book. Each one of the chapters is illustrated with a dozen or so illustrations that really make Bogle’s point clear.

Bogle is a wise person. One of my favorite people to talk to is my wife’s maternal grandfather. He’s approaching eighty, but with almost every sentence he imparts some form of wisdom, whether subtle or straightforward. Based on reading this book, I imagine a conversation with John Bogle would be much the same – and it makes me wish I could go out to a long lunch with him.

Is Enough Worth Reading?
Enough is what I would call the “perfect” bedside table book. It provides some healthy, enjoyable anecdotes and quite a bit of personal philosophy for you to chew on as you drift off to sleep.

Is it essential reading on how to manage your money? Probably not. This is the kind of book worth reading if you’re really interested in personal growth in every aspect of your life. It’s a sharing of a lifetime of very wise experience – the kind of book that can stick in your thoughts for a long time instead of fading away quickly after you absorb a few facts.

If that sounds appealing to you, Enough is right up your alley. Request this one from your local library or add it to your Christmas wish list – you’ll be glad you did.

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