I was on a radio program not long ago. My host was a financial planner who was upset about the book Donald Trump and I wrote, "Why We Want You to Be Rich." In the book, Donald and I don't speak highly of mutual funds.

Rather than listening to what I had to say, the interviewer wanted to argue. His position was that Donald and I weren't experts on mutual funds, and had no right to criticize. I agreed that we weren't experts on mutual funds, and reminded the host that Donald I never claimed to be.

An On-Air Dustup

Instead, we were quoting John C. Bogle, a true expert and leader in the mutual fund industry whom I've mentioned before. For those who may not know, John Bogle is the founder of the Vanguard family of funds.

Rather than consider my position -- that Donald and I were not experts, but John Bogle was -- the on-air financial planner defensively said, "John Bogle loves mutual funds."

Again agreeing with him, I replied, "Bogle does love mutual funds. That's why he's upset, because mutual fund investors are being ripped off by mutual fund managers."

Our on-air argument continued for approximately five more minutes. I asked the host if he'd read Bogle's book, "The Battle for the Soul of Capitalism." He admitted that he hadn't, and had no future plans to do so. His position was that I had misinterpreted the book and was taking Bogle's statements out of context.

Bogle on Funds

There's a saying that goes, "Minds are like parachutes. They only work when open." Since the radio-show host's mind was closed, and so was mine, I asked to end the interview early. Rather than continue arguing about a book the listening audience couldn't see and the host didn't plan on reading, I decided to make my case here, with Yahoo! Finance readers.

Essentially, John Bogle's position in "The Battle for the Soul of Capitalism" is that investors -- what he calls the true owners of major corporations and mutual funds -- are being robbed blind by corporation and mutual fund company managers. He refers to it as the shift from owner's capitalism to manager's capitalism.

Most of us have heard about the investors (and true owners) of Enron, WorldCom, and other corporations being fleeced by the likes of Ken Lay, Jeff Skilling, and Bernie Ebbers. Bogle contends that the same type of theft practiced by these men is going on in the mutual fund industry. He doesn't point to just a few bad apples, either -- he fingers the industry as a whole.

To quote Bogle, "Simply put, fund managers have arrogated to themselves an excessive share of the financial markets' returns, and left fund investors with too small a share." Elaborating on that point, Bogle writes, "With today's dividend yields on stocks at about 1.8 percent, a typical equity funds expense ratio consumes fully 80 percent of a fund's income."

As I put it on the air that day, "Eighty percent is a bit greedy."

A Money Vacuum

To illustrate his point, Bogle writes that "while $10,000 invested in the stock market [in 1985] earned a profit of $109,800 [over 20 years], the average mutual fund investor earned a profit of just $29,700. Together, the cost penalty, the timing penalty, and the selection penalty consumed an amazing 73 percent of the profit available simply by buying and holding the stock market itself, leaving the average fund stockholder with a mere 27 percent of the total."

In other words, if investors had invested in the stock market back in 1985, they would have made $109,800 dollars over 20 years. That's including the ups and downs of the market. During the same period, investors who put the same $10,000 in mutual funds made only $29,700.

That's what prompted me to tell the radio interviewer, "That's why mutual funds suck. Not only do they suck 80 percent of the dividends, in come cases they suck another 73 percent of other gains from investors."

I believe my comment was bleeped.

Caveat Emptor

Reading "The Battle for the Soul of Capitalism," you begin to understand Bogle's motivation for writing it. As the radio host accurately told me, "John Bogle loves mutual funds." If that financial planner had read the book, he'd understand that that's precisely why Bogle is so frustrated.

Mutual funds are a beautifully conceived investment vehicle designed to provide long-term wealth for passive investors. Sadly, over the years, fund managers have been both legally and illegally ripping off investors who count on their investments to provide a college education for their kids or retirement security for themselves. It seems that mutual fund managers, like the managers of our major corporations, have sold their souls for fast money, and have left the investors behind.

I agree with Bogle's call for more governance from fund managers. If the rip-off continues, it'll be harder to raise money from investors to fund our entrepreneurs and businesses. Many U.S. investors are already investing overseas rather than at home.

Yet regardless of whether or not our capital market leaders tighten the rules and fund managers regain their capitalistic souls, I remind you of a timeless bit of investing wisdom: "Let the buyer beware." Ultimately, it's your money, so be very careful about what you invest in and who you invest with.

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