By Josh Katzowitz, WCI Content Director
Taylor Larimore is one of the most important Bogleheads to ever grace the internet forums and chatrooms, and as he enters into centenarian status this month, let’s take a celebratory look back at his life and then ask him a few questions as he begins his second century on earth.
He served in World War II as a paratrooper during the Battle of the Bulge, and he was one of the American soldiers who helped surround the Germans in Bastogne in 1944, but he didn’t necessarily consider himself a hero. As Larimore, who earned five combat decorations, wrote in 2010, “We must never forget: The real heroes of World War II (and other wars) are those who never came back. And some who did. A few years ago, I went into a severely disabled ward at our VA hospital. It was so sad I went into the bathroom and cried.”
After returning from the war, Larimore began his investing career. When he was 25 years old in the late 1940s, a friend talked him into joining an investment club, and he recalled in a Bogleheads interview:
“The idea was that we would have a revolving ‘investment committee’ who would pick a few stocks for the club to buy—and later we would split the profits. The problem was there were no profits, and after a couple of years, we disbanded. Only our broker made money.”
After marrying in 1951, he sold life insurance (he later worked for the IRS as well), and he began investing with a buddy who was a Merrill Lynch stockbroker who put them in “churned” stocks and mutual funds. Though his broker/friend assured the couple they were doing well with their returns, Larimore later realized how badly they were underperforming the market.
He was already 62 years old when he and his wife, Pat, moved their securities from Merrill Lynch to Vanguard. Back then, he had built a portfolio of more than a dozen actively managed funds, but in the midst of reading two books (Bogle on Mutual Funds by John Bogle and A Random Walk Down Wall Street by Burton Malkiel), he eventually changed his strategy and switched to index funds.
With his discovery that he could buy and sell mutual funds without having to pay a commission to Vanguard, he still attempted to beat the market by researching more than a dozen market-timing publications at the Miami Public Library. After learning what he thought was the answer, he began writing a four-page monthly newsletter on how to time the market and sent it to about 40 friends. But his market recommendations got hammered in the 1987 bear market—a moment he called one of the most embarrassing episodes of his life.
That stopped his market-timing ways.
Taylor Larimore speaks at the 2022 Bogleheads Conference.
He went on to write his own books (including The Bogleheads’ Guide to Investing, The Bogleheads’ Guide to Retirement Planning, and The Bogleheads’ Guide to the Three-Fund Portfolio), and he became a prolific poster on the Bogleheads forum (tens of thousands of posts and counting). Not surprisingly, he counts John Bogle as his inspiration, and in return, Bogle called Larimore the King of the Bogleheads.
On January 25, 2024, Larimore celebrated his 100th birthday, and to commemorate this titan of financial information and know-how, we wanted to celebrate his life and achievements. Since I’ve been a journalist most of my career, I celebrate by asking questions. Recently, I emailed Larimore with some queries, and a few hours later, I had his answers in my inbox.
Here’s our email conversation:
Josh Katzowitz: This is probably an obvious question that you’ve probably been asked 100 times, but what’s your secret for making sure the money you saved for retirement has lasted until you reached 100 years old?
Taylor Larimore: When I was 80, my wife and I bought a Single Premium Joint Life Annuity. We liked it so much that we bought another a year later. These two lifetime annuities, together with my government pension and Social Security, gave me more guaranteed lifetime income than I can spend.
JK: What was the first major financial decision you made as a young investor, and how did it work out?
TL: We had a good friend who was a Merrill Lynch broker. Over time, he put us into about a dozen expensive Merrill Lynch mutual funds. Every year, he would take us for a ride in his lovely sailboat. Fortunately, I learned about Vanguard’s no-load index funds in 1986, and we have been with Vanguard ever since. Our good friend stopped inviting us to go sailing.
JK: I’ve been reading Morgan Housel’s book The Psychology of Money, and he asked a question to an economist that I want to ask you: What do you want to know about investing that we can’t know?
TL: I may miss your point, but I would like to know the best investments in advance.
JK: Looking back on the several decades of your investing career, what makes you the most proud?
TL: Mr. Bogle and I became good friends. Being able to share his investment philosophy on the Bogleheads Forum gives me great satisfaction.
Money Song of the Week
One of the early hip hop classics, Paid In Full by Eric B & Rakim, touches on a rags-to-riches type story (or at least the hope of a rags-to-riches story), and it’s interesting that, a half-decade after this 1987 classic hit the radio airwaves, a disagreement about money and how they should be paid for their work led to the demise of the duo for more than two decades.
Turns out that much like your spouse, if you’re not on the same page financially as your rapping partner, the relationship can fall apart.
First, the song which features lyrics like,
“Thinkin’ of a master plan/’Cause ain’t nothin’ but sweat inside my hand/So I dig into my pocket, all my money spent/So I dig deeper, but still coming up with lint/So I start my mission, leave my residence/Thinking, ‘How could I get some dead presidents?’”
AND
“’Cause I don’t like to dream about gettin’ paid/So I dig into the books of the rhymes that I made/So now’s a test to see if I got pull/Hit the studio, ’cause I’m paid in full.”
This recording eventually sold more than 1 million copies, and the album was certified platinum. It made somebody plenty of money. By 1992, though, the duo had broken up because of a business deal gone bad.
As Rakim said in this 2020 interview with The Believer, he and Eric B split over how they were supposed to be paid.
“It was a deal that he came up with,” Rakim said. “Eric said, ‘Yo, Ra, we got three more albums left on our contract. A cool way of doing it would be, I’ll do an album and keep all the money, you’ll do an album and keep all the money, then we’ll get back together and do a third album, finish the contract, and get more money. Then we’ll sign a new contract.’ Sounded like a great plan. All right, Eric B. So he did his album and, long story short, when it came time to do mine, we got into a problem. He didn’t want to do it. That’s when the love was lost.”
Eventually, the two reunited (only 23 years later!), but the impact this song made on hip hop (and the lessons that can be learned for how hard work can make you money) continues to reverberate nearly 40 years later.
Tweet of the Week
Older clients ask about gold coins. Younger clients ask about #bitcoin . I’ve observed this for a few years. Now, with ETFs available, the older clients are asking about it. The conversation is shifting. At least that’s my experience.
— Ross Marino, CFP®, CeFT® (@Ross__Marino) January 16, 2024
Be careful with cryptocurrency, especially as it gets easier to buy/speculate.
Have you followed Taylor Larimore during his tenure as King of the Bogleheads? What lessons have you learned from him? Comment below!
[Editor’s Note: For comments, complaints, suggestions, or plaudits, email Josh Katzowitz at [email protected].]
