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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

portrait of dapper 98-year-old investment guru Taylor Larimore seated to eat a meal; he is wearing sunglasses and a WWII US Army Airborne Division commemorative cap
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 John C. Bogle, the founder of the Vanguard Group, 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 World War II veteran 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.  

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In 1986, Larimore read Bogle on Mutual Funds 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 low fees and high diversification, 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.  

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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 Bogleheads.org. 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: 

  1. Gambling in individual stocks. 
  2. Using past performance to predict future performance. 
  3. 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 index funds outperforms most investors with less risk.   

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The three-fund portfolio is simply:

  • A total U.S. stock index fund
  • A total international stock index fund
  • A total bond market index fund

“Total,” in this case, means owning large, midsized and small company stocks. The S&P 500, for example, is a large-company stock index of 500 companies. A total stock U.S. market index is a broad-based index of U.S. stocks, big, midsized and small, including more than 4,000 company stocks. 

Larimore said that the main values of total market index funds are their low costs, low taxes, great diversification and simplicity. With just those three funds, adjusted to your desired mix of stocks and bonds that suit your goals and your appetite for risk, you can own virtually every publicly held company on the planet and the vast majority of U.S. investment-grade bonds. As part of his never-ending desire to give back, Larimore has donated 100 percent of his royalties to the John C. Bogle Center for Financial Literacy (I am a past board member).  

I asked Larimore the single most important piece of advice he had for seniors and he said, “Keep what you’ve got.” This means don’t take unnecessary risks. If you lose 25 percent of your portfolio, you’ll need to earn about 33 percent just to get back even. 

It’s more than money

Even more than his financial philosophies, what I admire most about Larimore are his views on life. He told me he thought his key to longevity 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 116,000-plus members who have made more than 6.4 million posts on over 334,000 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.

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