Almost 40 years ago, Jack Bogle invented the index mutual fund and became the whipping boy of Wall Street—at least temporarily. It took decades for the funds to become common-place in retail investors' portfolios. By the 1990s, Bogle was an iconic investor. He came in No. 9 on the CNBC 25 list.
Before he founded The Vanguard Group in 1974, Bogle was the president of the Wellington Fund. Around that time, he helped orchestrate a merger with a "Go-Go" investment firm out of Boston.
The fund tanked, and almost took down Wellington with it, Bogle recalled during an interview with CNBC on Tuesday. It cost Bogle his job but opened his eyes to new possibilities at soon-to-be-founded Vanguard.
"You make a big mistake and you pay a big price," Bogle said on CNBC's "Power Lunch." "Who says life isn't fair?"
Read MoreJack Bogle: Why investors shouldn't fear flash trading
Bogle chalked up most of his mistakes to "marketing" and attempts to please the public or chase hot investments. He said most of his ill-fated ideas—specialized portfolios and real estate investments—fall into this category.
The miscues only re-enforced Bogle's trademark investment strategy of low-cost mutual funds that track the returns of benchmark stock market indexes. You can't beat simple math, Bogle said.
"What I got right was not only the index fund, which was the product of a simple mind," Bogle said. "If I was some kind of genius I would have thought I could beat the market all the time and been a big quant or something, but I don't have the talent for that. ...
"So I did the right things by my standards and by the simple math of markets—gross return on the markets plus cost equals net return. That's a formula that's good forever."