By Dr. Rikki Racela, WCI Columnist
If there was one absolutely essential conference that a financially literate physician must attend—virtually or otherwise (other than WCICON24, of course)—it’s the Bogleheads Conference.
I had the pleasure of viewing the 2022 conference online and experienced a who’s who in personal investing and financial literacy education. From Christine Benz (a WCICON23 keynote speaker!) to Allan Roth and from Rick Ferri to the esteemed owner of this website Dr. Jim Dahle, the three-day talks were first-rate, easily digestible, and completely comprehensive in teaching basic financial literacy principles and more current investing topics. I will review four essential takeaways from this conference in the hope that you will be enticed to actually watch and learn from the conference as I did. The conference is a basic overview of everything you need to know in personal finance with appropriate deep dives on nuanced topics. Best of all, you can watch the 2022 videos for free (FYI, this year's conference runs from October 13-15 in Rockville, Maryland, and yes, Jim Dahle will be there!).
Here are some of my takeaways from immersing myself in Bogleheads 2022.
#1 The Essentials of Personal Finance Are Dirt Easy
The first part of the conference was led by none other than WCI's founder. Jim had mentioned previously that he was hosting a pre-conference the day before the start of the formal conference, called Bogleheads University. This is an effective clinic on the basics of personal finance and is amazingly comprehensive with a star-studded panel of speakers. The lectures, which were quick 15-minute hitters on basic investing principles, included:
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- Developing a Workable Plan by Dr. Jim Dahle
- Investing Early and Often by Christine Benz
- Never Bearing Too Much or Too Little Risk by Allan Roth
- Diversifying by Christine Benz
- Never Timing the Market by Rick Ferri
- Using Index Funds Whenever Possible by Rick Ferri
- Keeping Costs Low by Allan Roth
- Minimizing Taxes by Mike Piper
- Investing with Simplicity by Mike Piper
- Staying the Course by Dr. Jim Dahle
Bogleheads University was everything you needed to know about personal finance, and it all fit in one afternoon. Jim started off with his first lecture and indulged us with the reasons for and how to create a written financial plan. Starting with goals, choosing accounts, determining an asset allocation, picking investments, and setting rules for changing the plan were the main tenets of his talk. Next, Christine Benz pumped us up for investing as much as you can for as long as you can for retirement. This attitude can help you attain hundreds of thousands, if not millions of dollars, extra.
Allan Roth, quite humorously, went over trying to find your risk tolerance and how different assets can help mitigate risk, and he even dissed the use of risk tolerance questionnaires. Afterward, Benz took the stage again and really made the point that you want diversification, not DE-WORsification—the concept of adding too many asset classes which is not really increasing your diversification.
Rick Ferri emphasized that market timing is an impossible task and that index funds absolutely without a doubt dominate active management in terms of return. After Roth took the stage again to talk about why the fees of active management leads to its downfall, Mike Piper (a WCICON21 keynote speaker along with Roth!) had two talks: 1) about how to minimize taxes in just two ways (maxing out retirement accounts and using tax-efficient investments in taxable accounts) and 2) he emphasized how simplicity makes it easier to implement a financial plan (he only invests in one fund: the Vanguard LifeStrategy Growth Fund. Talk about simple!).
Finally, the fearless leader of Bogleheads University took the stage for the last talk on the merits yet difficulties of staying the course.
It was great getting the thoughts of such an accomplished panel, and I have to say this was the best part of the conference if you are early in your financial journey or just want to review the basics. It is literally all you need to know to be a Boglehead and great investor. And it was simple, all done in one afternoon, reemphasizing that the principles of personal finance are dirt easy.
More information here:
The 1 Portfolio Better Than Yours
My Financial Plan Calls for Me . . . Being Hung by My Fingernails????
#2 The Behaviors of Personal Finance Are Clear as Mud
While the first part of the conference might seem simple, a theme that pervaded throughout was that the behavioral side is the hard part. The first official talk of the conference was an engaging dialogue between Bill Bernstein (a WCICON22 keynote speaker!) and Jason Zweig, two giants in the industry who have a vested interest in the behavioral side of personal finance.
Bernstein came from a career studying the brain before writing on finance, while Zweig came from a career reporting on finance which then was honed on focusing on the brain. For Zweig, an article in Scientific American regarding behavior triggered his specific interest, and he has since built a career writing about behavioral finance, exemplified by his book Your Money and Your Brain. Bernstein exemplifies how to use rationalization behavioral bias to become a better investor. He applies how doctors “read the peer-reviewed literature” when treating patients, and he uses this mantra when studying investing. He mentioned a few seminal papers including the Fama and French paper on market efficiency, the limits of arbitrage, Dreman’s work on the value effect, and a paper on the transience of growth companies’ outperformance.
He also utilizes salience when learning and teaching personal finance. For example, he discussed how a young accumulator is going to love bear markets and inherently has no risk in stocks. To an old decumulator, though, he said a bear market is “Three Mile Island toxic.” Using an analogy of nuclear disaster taps into the salience portion of how our brains work, searing the risk of stock for retirees into our memories.
In a later conference session, Dan Egan, the director of personal finance at Betterment, discussed how to put savings and investing on auto-pilot to minimize the limited mental bandwidth your brain has to waste. He also described his favorite behavioral economic hack: temptation bundling. For example, he and his wife bundle their financial date nights with drinks at a chic local bar. What a great way to make budgeting much more pleasant by rewarding your financial hard work with a cold one with the spouse you love at a stylish locale. He also discussed how success in finance is not predicting the next big stock, not timing Bitcoin, and not even being an oracle like Warren Buffett. It is utilizing knowledge of your brain’s heuristics to make finance more palatable and easier to save and invest for success.
More information here:
Yes, Risk Tolerance Can Be Modified: You Just Have to Rewire Your Brain
#3 Many Finance Debates Just Don’t Matter Much
Throughout the conference, plenty of topics were hotly debated, but the conclusion of all these discussions was this: it doesn’t matter!!! There was a panel discussing investing including Dahle, Ferri, Bernstein, and Zweig. They discussed their optimism for the market (even though this was in the middle of a bear market) and how you can only speculate whether the US market vs. the international market is overvalued. Dahle mentioned that international will eventually outperform US stocks and that every asset class will have its day in the sun. In the end, debating how much US vs. international just doesn’t matter!
The panel also discussed tilting, where Bernstein said sticking to your tilt was more important than tilting. Ferri mentioned that tilting is not as big a deal as the macro asset allocation which dictates 90% of your return. That, he said, is the cake whereas tilting is just the icing and sprinkles. Should you tilt to small/value/momentum/quality? Again, it does not matter. What matters is the stock/bond allocation and that you stick to it.
They then talked about bonds and how they are a diversifier and ballast to your equities. Even in 2022, when both stocks and bonds went down, bonds did not go down as much as stocks. You just don’t know which type of bond will act best as a ballast to stocks during the next bear market. You can debate this endlessly. But what if, as opposed to 2022, the Fed had dropped interest rates to stimulate the economy instead of increasing those rates? Then, instead of long-term Treasuries getting killed, they might have actually jumped highest in value at the same time equities were getting hammered. You just can’t predict these things.
The more important insight to realize is why you have certain bonds in your portfolio. It doesn’t matter what bonds will be best going forward. It matters what role they are playing in your asset allocation, how they can react in different situations, and that you understand what type of risk you are taking.
The panel then discussed REITs and dividend stocks. Again, does it matter? REITs are equity-like in their returns, and they have less of a correlation to stocks. But you can likely accomplish your financial goals with or without them. Ditto for dividend stocks, where you might delude yourself psychologically that you are not selling equities. But every time you receive that dividend, that is taken out of the intrinsic value of the companies it came from. The point is not whether you should have these asset classes in your portfolio, but are they acting in a way that helps you to stick with them through thick and thin?
#4 I Want to Be Michelle Singletary
The finale of the conference could not have been better as dynamic writer and speaker Michelle Singletary (a WCICON22 keynote speaker!) was interviewed by Christine Benz center stage. Michelle delivered a fantastic story regarding her upbringing of frugality modeled by her mother and how she passed on those traits to her children. This was exemplified by a story she told about her daughter paying $5 of her own money to buy a pretzel at the movies. Her daughter, after handing in that $5 and getting her pretzel and 10 cents in change, started crying. She was crying because she had lost that $5 she had worked so hard for—all for this simple pretzel—and wanted her money back.
Singletary’s response to the server at the movies was hilarious: “Well, give her her money back!”
She went on to mention her worst fear of enabling her children to be dependent on her financially—what Stanley and Danko described as Economic Outpatient Care —and she said that everyone at the Bogleheads conference, by virtue of their financial literacy and resulting success, are at highest risk for giving EOC and that we should all be mindful.
Now, I am going to say this in public, right here, right now, in this column: I want to be Michelle Singletary, because she exemplifies frugality and smart low cost index investing which she deftly teaches her kids and others. Her strength was built through a life of surviving poverty and family struggle. She doesn’t blame the stars/fates, but instead, she thanks them for making her the woman she is today. I am reminded of a quote by Cassius in Shakespeare’s “Julius Caesar”:
“The fault, dear Brutus, is not in our stars, but in ourselves.”
It's a must-watch interview and a great finale to the conference.
More information here:
Visualizing Your Way to Wealth
The Bottom Line
The Bogleheads conference was so wide-ranging that I cannot think of a single thing that it didn't cover in terms of personal finance. The speakers: phenomenal. The talks: comprehensive. The content: evergreen. I say this is a must-see conference, especially given the price tag: free! If there was a conference to view online after WCICON, it would be the Bogleheads Conference.
What do you think? Have you ever been to or watched a Bogleheads conference? Do you agree with the Boglehead philosophy? Comment below!
Great article! I watched the 2022 Boglehead’s conference recordings and they were excellent! Do you know if they will be recorded this year? I assume yes. Any chance they will be live online this year?
Hi Fred thanks for reading and yes! I believe they will be recorded again 🙂 It does not seem though they will be live online this year.
I’m pretty involved in the planning and execution this year. I don’t think there are any plans to broadcast it live. That’s a whole additional layer of complexity and expense. (Ask em how I know. :))
Rikki, I’m a fan of your posts – concise, to-the-point, easy-to-read articles. Thanks for keep writing interesting posts!
The WCI, it’d be great if recording will be available post-conference like 2022 youtube videos though. I thoroughly enjoyed all the videos including Bogleheads Univeristy.
Rikki, I have a question of you about how to decide how much to fund a 529. in your financial plan I remember you are aiming for $300,000 in 2033. What are you assuming for college cost increases between now and 2033? What about stock market returns between now and 2033?
Is $300,000 intended to balance the risks of over and underfunding the plan? Private schools can cost like $85,000 a year already but public schools are like half that. Are you splitting the difference?
Hey Tom excellent question! I had to consult the boss (wife) and we talked about what we wanted to do. We came with a goal of funding totally a private college education for both kids, but your right, didn’t want to overfund where that money could have been used elsewhere. Ryan Inman at Financial Residency came up with $400,000 for funding a child college education born in 2020 if you projected the rate of college tuition inflation until 2038. My kids are going to be entering college a little earlier than that, and not wanting to overfund, we came up with a goal of $300,000. I also assumed stock market returns of 10%. Who knows? maybe we will be right on the mark, maybe we will be hugely off, but me and wifie are prepared to cash flow the rest if there is a shortfall. Like Morgan Housel says, better to be sort of right than precisely wrong 🙂
sorry, correct that just looked at the article again, had been awhile. Ryan Inman at financial residency projected in 2020 that, given college tuition has been rising 6% ABOVE inflation, college tuition for 4 years would be $600,000! our kids were 3 and 5yo at the time, so likely we wouldn’t need that much so I think I calculated (more like guessed) might be more around $400,000.
link to ryan’s article: https://financialresidency.com/529-college-savings/
Thanks Rikki! And great Boglehead article!
Thank you for the article. I listened to the Boglehead podcast while walking my dog. On a side note, I suggested WCI to my primary care doctor, at my yearly exam this year.
I just got home from attending Bogleheads 2023 and what I learned deserves a lot more than this brief post. I learned Jim’s generosity almost matches Katie’s, and the generosity of time for sidebars with all of the presenters was unprecedented. I missed the chance to meet Jack, I did not miss meeting and hearing Bill Bernstein. If you have the chance don’t. Clear your calendar for Bogleheads 2024 in Minneapolis, should be about the same weekend.
Thanks for your kind words. Katie has done and continues to do a lot more behind the scenes than most realize, so it was great to see her get the recognition she deserves at the conference. She was very embarrassed about it of course. Christine Benz really gets most of the credit for that conference, and because we run a conference ourselves (with year round employees who do nothing but that), we know how much work it is. The most remarkable thing is that all of the speakers not only speak for free, but pay their own way and often their own conference fee. I didn’t pay the fee this year (I did last year) but Katie still did. We just kind of look at it as a donation to the Bogle Center For Financial Literacy and don’t really care one way or the other.
There are downsides to running a conference on the cheap. The paid AV team this year was extremely disappointing (how hard is it to make sure all the microphones and slide changers are on and working at the right time?) and speakers who aren’t paid are much more likely to just want to do interviews, panels, or Q&A type sessions rather than presentations of newly prepared material, but all in all, I’ve enjoyed all of the Bogleheads conferences I have attended.
Jonathan Clements makes the point in his recent book My Money Journey is we may not all be experts in the financial world, but we can speak with authority about our own personal experiences. The Bogleheads’ generosity I saw and heard leads me to add perhaps we should. Here’s a couple things based upon my experience that might not be within the conference videos in case they help you.
Write your own financial or retirement plan. Plans I had written for us were generally waste, mostly copy and paste general stuff and exculpatory causes. I started writing my plan around 2015 with retirement (or being retired) in mind. Dr. Dahle’s presentation Develop a Workable Plan is terrific. I would add if you hire help to do it, only hire a fee-based advisor who can steer you with good ideas and questions. You keep the pen. My subject categories are Goals, Financial Matters, Investment Policy and Investments, Income Plan, Tax Matters, Expense Plan, Asset Protection and Insurance Matters, Estate Planning Matters, Risk Assessments, and Calendar. I revise and update it monthly, will have a couple from the conference and Dr. Dahle’s terrific Asset Protection book. I’m going to create a new category for Generosity instead of having that as part of the Expense Plan. Make up your own categories and start by outlining. Then fill in by writing your text a bit at a time. For me the work in doing it was actually fun. Updating it still is, and there is something about writing your own that fully vests you into it.
Mr. Bogle is still out there. I recently stumbled upon the amazing episode No. 1 of the Bogleheads on Investing podcast and had a chance to discuss that with Rick Ferri. Highly recommend it. Also, check out the 2013 Frontline episode entitled The Retirement Gamble (available on YouTube) featuring poignant discussions with Jack and Jason Zweig. They state the case for financial literacy, the Bogle Center and how bad work defined contribution plans used to be.
Find financial peace in index funds. Financial Peace was the title of Michelle Singletary’s program, it was great but went in a different direction than I thought it might. Whether anything remotely resembling financial peace is possible with $2T federal deficits at full employment is for smarter folks than me. As I think back on financial advisors I had over the years before I fired them, I was sold a lot of envy and covetousness, just about the polar opposite of financial peace. I have experienced a sense of financial peace through index investing, and when I asked Michelle about that she seemed to agree though in fairness I don’t think she had thought about it much. Ownership of the whole haystack (VTI and VXUS) and a goal of realizing the returns of the market, and removing the risk of realizing less, has worked for me. Might work for you too. Dr. Bernstein puts it this way (see The Four Pillars of Investing, Second Edition on page 77): “You still might luck out and find an outperforming manager, but the odds are against you. Picking active managers is like a shell game with 10 shells, under which are $10,000, $9,000, $8,000, $7,000, $6,000, $5,000, $4,000, $3,000, $2,000, and $1,000. By picking an index fund, you’re guaranteed an $8,000 payment. What would you choose?”
Save some real money. Buffett style freedom or sleeping money. Dr. Bernstein has the same term my dad had for this, I didn’t need the edge. It is a big pile of MMDAs, T-Bills, I-Bonds or short CDs outside your retirement accounts that can help brace you mentally for the worst of times. I did it swimming against zero interest rate policy, you don’t have to. It works and you don’t even need a prescription, just WCI income and some intentionality.
Thanks for sharing.
I think you mean fee-only, not fee-based though. Fee-based is fees plus commissions.