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Investing Lessons From Taylor Larimore s 98 Years of Wisdom

Meet the man who has spread a simple and important message to thousands of investors

Taylor Larimore, World War II vet and investing expert Photo Courtesy: Michael Larimore There are two people who I think have done more to help ordinary people achieve financial freedom than anyone else. The first is the late , who gave millions of us access to ultra-low-cost index mutual funds. The second is a 98-year-old man named Taylor Larimore. Larimore is known as “the king of the Bogleheads.” More on what a Boglehead is shortly, but count me among the hundreds of thousands of people who continue to benefit from Larimore’s wisdom. Larimore is a who was paratrooper in the 101st Airborne Division during the Battle of the Bulge. His professional career included working as a life insurance underwriter, a revenue officer for the Internal Revenue Service, chief of the Financial Division for the Small Business Administration in South Florida and director of the Dade County Housing Finance Authority. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. In 1986, Larimore read and became inspired by the sound logic of broad-market index funds. These funds simply try to match the total performance of a market index, such as the Standard & Poor’s 500 stock index (S&P 500), rather than hire a manager and an army of analysts to try and beat those indexes. Over time, index funds tend to beat the hotshot managers, in large part because index funds have much lower overhead and extremely low expenses. Before then, Larimore recalls, he was spending much of his time constructing complex portfolios and experimenting with various market timing strategies trying to beat the market. He soon realized the market was beating him. Ever since, combining his financial experience with Bogle’s research and advice, Larimore has been investing with the philosophy of owning a few broad, low-cost index funds. “John Bogle changed my life, not just financially, but Jack made me a better person by knowing him,” he says. In an effort to give back, Larimore, along with some like-minded disciples of Bogle’s investment philosophy of , was a key person in starting the movement called the Bogleheads. He wanted to spread the word and teach people about the benefits of simplicity by investing in low-cost diversified index funds. Flowers & Gifts 25% off sitewide and 30% off select items See more Flowers & Gifts offers > In 1998, the Bogleheads community expanded with an online forum where people could connect, share ideas and seek investing advice from community members. The forum was first hosted by Morningstar and then became an independent online forum at . In 2000, Larimore and another key Boglehead, Mel Lindauer, hosted the first Bogleheads meeting at Larimore’s and his late wife Patricia’s Miami condo at which John Bogle himself was the keynote speaker.

Larimore s philosophies — investing and life

Larimore told me the keys to financial independence are to live below your means, save regularly, keep costs and taxes low, avoid large mistakes, keep things simple and stay the course. Larimore said the three biggest mistakes people make are: Gambling in individual stocks. Using past performance to predict future performance. Building complex, high -cost and tax-inefficient portfolios. Indeed, Larimore’s most recent book, The Bogleheads’ Guide to the Three-Fund Portfolios, shows how a simple portfolio of three total market outperforms most investors with less risk. AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. and vitality could be that he seldom worries. “I was a young paratrooper in World War II where I saw the horrors of war,” he said. “After the war, I flew around the world, visiting many poor countries where I saw terrible poverty. These two events made me very grateful to be an American from a loving family. Compared to others, I realize, deep down, that I am foolish to worry about myself.” I think I’m going to focus on his life lesson and worry less about the small stuff; it has certainly worked for Larimore. As Morningstar’s Christine Benz told me, “Taylor is an inspiration in how to live well.” I couldn’t agree more. Unsurprisingly, Larimore has no shortage of admirers. I was honored to be one of more than 100 people from across the country and world who attended his 98th virtual birthday party, organized by the South Florida and Tampa Bay Bogleheads chapter coordinators. For roughly 90 minutes, we gave our tributes to this great man and shared what we learned from him. In my tribute, I thanked him for helping so many people achieve their financial freedom. If you would like to learn more about Larimore and the wisdom he has offered over the years, you can go to Bogleheads.org and check out the more than 55,000 posts he has contributed. If you want some information on a specific topic on investing or personal finance from people not trying to sell you anything, simply type the subject into the search engine. With 11 6,000-plus members who have made more than 6.4 million posts on over 33 4,000 topics, the odds are good that there will be something for you. And you do not have to be a member to read these posts. Thank you to all of the volunteers for the community they’ve created and the countless hours they’ve given to help people across the world achieve their financial freedom. And thank you, Taylor, for all you have done and continue to do. We look forward to your 99th birthday party and many more. Allan Roth is a practicing financial planner who has taught finance and behavioral finance at three universities and has written for national publications including The Wall Street Journal. Despite his many credentials (CFP, CPA, MBA), he remains confident that he can still keep investing simple. AARP Membership — $12 for your first year when you sign up for Automatic Renewal Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine. More on money AARP VALUE & MEMBER BENEFITS See more Health & Wellness offers > See more Flights & Vacation Packages offers > See more Finances offers > See more Health & Wellness offers > SAVE MONEY WITH THESE LIMITED-TIME OFFERS