I generally don't get teary-eyed over the passing of a finance guy (or woman), but I make an exception in the case of John Bogle. Bogle was the founder of Vanguard funds, which now has over $5.1 trillion in assets. That would be roughly $16,000 for every person in the country.

Bogle's great innovation was to minimize the cost of managing individual accounts. The key Vanguard asset is an index fund. It does minimal trading, it just tracks the market. Bogle argued, supported by much evidence, that the vast majority of investors are not going to beat the market. This means trading costs are simply a transfer to the folks running the account. Since most of us have people we would rather give money to than our stockbroker, we are better off just having an index fund.

And it does make a huge difference. Many of Vanguard's index funds have costs of less than 0.1 percent annually. By contrast, many actively traded accounts will have fees and service charges in the range of 1–2 percent annually. This adds up over time. If you invested $1,000 that got a 6 percent nominal return, it would grow to $5,580 at Vanguard after 30 years. At a brokerage charging 1.0 percent in annual fees, it would grow to $4,320. At a brokerage charging 2.0 percent annual fees, it would only grow to $3,240. And the gap is all money in the pockets of the financial industry.

While his low-cost index fund was a great innovation in finance, he did not personally get rich from it. He organized Vanguard as a cooperative. The people who invest with the company effectively own it.

I once met John Bogel. We were having lunch before testifying on some financial issue. He was very soft-spoken and I originally didn't catch his full name. After our testimony, when I realized who he was, I told him that I tell everyone I know to give him all their money. That was true.