Scan barcode
A review by inkerly
The Simple Path to Wealth: Your road map to financial independence and a rich, free life by JL Collins
4.0
4.5 stars
A coworker recommended this book and while I’ve read several personal finance books at this point, I thought it couldn’t hurt to read another. This was a pleasant surprise! It’s a good compilation of all the advice I’ve read from books and articles about investing in the stock market, all well written for the average Joe to understand. A summary of all that the author preaches:
- Most financial advice is noise. The quickest and easiest way to wealth for most people is through low cost index funds
- Avoid debt and frivolous spending
-Save 30%-50% of your income or more now and put it into index funds so that you enjoy your life later
- Vanguard index funds are the best and only you need and outperform any actively managed funds.
- You are not Warren Buffet. You will never be Warren Buffet. Stop trying to be Warren Buffet
- Avoid actively managed funds, financial “advisors”, gurus, and hedge funds like the plague
- You only need a 2-fund portfolio : the VTSAX Admiral shares index fund for stocks , and the VTBSX index fund for bonds . Target Date Funds are also a fine alternative as long as their fees are low. <.2%
- Bonds hedge against deflation , stocks hedge against inflation
- International stock index funds are not necessary but you may add them if you want
- You’ll want to focus your investments in these taxable and tax advantaged buckets : Brokerage accounts, 401(k), 403(b), TSPs, IRAs, Roth IRAs, HSAs, etc.
- Dollar cost averaging is not the greatest but if you also do it won’t be the end of the world.
- Don’t rely on Social Security
- Once you turn 70.5 years old, you are required to take withdraw from your investments according to RMD( required minimum distributions ) . Opt to withdraw no more than 4-7% of earnings, with the majority coming from your taxable accounts.
- Money is freedom! Grow your F money, so you can live your life and give back through charity
There are some points I don’t agree with and I likely won’t follow every single rule, because of advice I’ve followed before Collins. But I think Collins’ advice is very doable no matter where you are in your financial journey.
A coworker recommended this book and while I’ve read several personal finance books at this point, I thought it couldn’t hurt to read another. This was a pleasant surprise! It’s a good compilation of all the advice I’ve read from books and articles about investing in the stock market, all well written for the average Joe to understand. A summary of all that the author preaches:
- Most financial advice is noise. The quickest and easiest way to wealth for most people is through low cost index funds
- Avoid debt and frivolous spending
-Save 30%-50% of your income or more now and put it into index funds so that you enjoy your life later
- Vanguard index funds are the best and only you need and outperform any actively managed funds.
- You are not Warren Buffet. You will never be Warren Buffet. Stop trying to be Warren Buffet
- Avoid actively managed funds, financial “advisors”, gurus, and hedge funds like the plague
- You only need a 2-fund portfolio : the VTSAX Admiral shares index fund for stocks , and the VTBSX index fund for bonds . Target Date Funds are also a fine alternative as long as their fees are low. <.2%
- Bonds hedge against deflation , stocks hedge against inflation
- International stock index funds are not necessary but you may add them if you want
- You’ll want to focus your investments in these taxable and tax advantaged buckets : Brokerage accounts, 401(k), 403(b), TSPs, IRAs, Roth IRAs, HSAs, etc.
- Dollar cost averaging is not the greatest but if you also do it won’t be the end of the world.
- Don’t rely on Social Security
- Once you turn 70.5 years old, you are required to take withdraw from your investments according to RMD( required minimum distributions ) . Opt to withdraw no more than 4-7% of earnings, with the majority coming from your taxable accounts.
- Money is freedom! Grow your F money, so you can live your life and give back through charity
There are some points I don’t agree with and I likely won’t follow every single rule, because of advice I’ve followed before Collins. But I think Collins’ advice is very doable no matter where you are in your financial journey.