Nine Ways to Flourish Using Stewardship

If you have invested money in the stock or bond market in the past few decades, Jack Bogle probably saved you money.  Jack was the founder of Vanguard mutual funds and created the first index fund. These funds are a low-cost way to own a basket of stocks. His innovation started a steady reduction in broker fees that continues to this day including some funds with zero fees.

Until his death last year at the age of 89 he stayed active promoting the virtues of low-cost investing.  No less an icon than Warren Buffett paid Bogle the ultimate compliment in his 2016 annual letter to shareholders, “If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle.”

What was behind Jack’s relentless energy serving small investors like us even into his 80’s?  He spelled it out in a book called “Enough” where he said, “…my chosen mission of returning capitalism, finance and fund management to their roots in stewardship…”

While many people today might frown at what might seem like an old-fashioned concept like “stewardship,” I think the wisdom of Jack Bogle in this area can be transformational in our own life and personal finances.

What is Stewardship?

I think the best definition of stewardship ever given in regard to personal finances comes from the founder of the Methodist Church, John Wesley. In a sermon to the faithful, Wesley exhorted his parishioners to do this:

“Make all you can, save all you can, give all you can.”    

Pastor Wesley of course made this comment to those who had a belief they were placed on the earth for a purpose and the proper use of money was a part of that higher purpose. In other words, it’s a view that we have an obligation to serve and take responsibility for all we have been given. 

Does an 18^th Century preacher, or the legendary Jack Bogle of our day, have some practical money insights for us? Yes! Here are nine ways living as a steward leads to a richer life.

1. Invest in a Calling. I have always advised my children or clients that there is no stock market return that will ever match the return on improving our skills. A number of years ago I invested $1,000 in a CPA review course. Upon passing the exam, it led to a $10,000 raise, which was built into my raise structure for the next thirty years. A return on investment of 30,000% over that time period. Even Warren Buffett can’t beat that!
2. Pick Up the Free Money!  As a bank CEO I used to be frustrated that over 30% of my bank employees were not taking advantage of the generous 401(k) match we offered. Every year I would hold meetings with all employees to encourage participation. I would ask if I dropped $1,000 on the floor, would they pick it up? If so, I would ask, why wouldn’t you also take the free money the bank was giving for investing in your retirement?
3. Ask for the Raise. If we are providing a valuable service to others and we are using our money for honorable purposes, it’s poor stewardship to fail to ask to get rewarded for our efforts. I was taught to be polite and kind, but somehow that got translated in my mind that it was not polite to ask for fair compensation. After I thought this through in the context of John Wesley’s advice to “earn all you can,” it became a duty.
4. Take Smart Risks with Investments. It’s so great to be an investor today. Thanks to Jack Bogle we can invest in a total basket of all the stocks in the market with as little as $100 and not pay any transaction fees. John Wesley was keenly aware of the parable of the talents in the Bible which rewarded the stewards who put their money to work in the marketplace, but punished the steward who was fearful of risk and buried it. Clearly for most of us with long term money to deploy, the stock market is a high probability investment for success.
5. Minimize Investment Costs. There are a number of investment services that have low cost investments. I have used Vanguard and Schwab in my investing and found them both to serve my needs to meet this goal of investing with minimal costs. But there are many other good companies to choose from if you educate yourself to understand investing. If you’re not competent to invest on your own, there are many ethical advisors who will help for a modest fee.
6. Save all you can by Refusing to Play the Signaling Game. We don’t discuss how much money we make because it’s not polite. However, many want to signal to their neighbors how well they are doing by the expensive car they drive or the size of their house. This silly consumerism limits how much we can save. It also extends the need to work at a job that we may no longer care about and prevents us from moving onto a retired life that we could devote more time to volunteer work.
7. Give all you can. John Wesley lived out his sermon to give generously. Researchers have reported that Wesley lived frugally, at first by necessity because he wasn’t making a lot. However, as his income grew, estimated to be north of $160,000 a year (inflation adjusted), he maintained his standard of living at $20,000 in order to give the rest away.  While that’s not practical for most of us today, the idea of increasing generosity as our wealth grows is certainly an aspirational goal.
8. Make Money without Regrets. I like this quote from Rene Descartes because it highlights our ability to rationalize our actions so well, “A man is incapable of comprehending an argument that interferes with his wealth.” Many try to atone later in life for wealth made in questionable ways through charity, but how much better to enter retirement years without those regrets.
9. Retire with Purpose. Being a new retiree, Jack Bogle is an inspiration for me. After he retired from Vanguard, he found great purpose in fighting for stewardship concepts in our corporations. He knew that a singular focus on maximizing profits was short sighted and that moral integrity needed to be built into our corporations in a way that would inspire employees and garner trust in customers. I love the freedom that comes from not having to be in the office from 8 to 5 everyday, but like Jack Bogle, I also enjoy a purpose outside of just leisure.

These are nine ways I’ve been able to live out the concept of stewardship in my life. If you share this view of life and money, I’d love to hear how you have lived it out in your life!

Joe Kesler

Founder, Smart Money with Purpose