Jl Collins the Simple Path to Wealth Review
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BEHAVIORAL
- Avoid debt at all costs.
- Avoid fiscally irresponsible people and do not marry them.
- Spend the side by side decade working your ass off.
- Accept depression living expenses.
- Do not certainly spend more than you earn (do not go trapped past an expansive lifestyle).
- Save and invest over 50% of your income.
- Avoid financial advisors.
TECHNICAL
- Avert multipl
BEHAVIORAL
- Avoid debt at all costs.
- Avoid fiscally irresponsible people and practice non ally them.
- Spend the next decade working your donkey off.
- Have low living expenses.
- Do not certainly spend more than you earn (do non get trapped by an expansive lifestyle).
- Relieve and invest over fifty% of your income.
- Avoid financial advisors.
TECHNICAL
- Avoid multiple stock investment.
- 120 - your age = per centum to invest in stocks. The rest in bonds.
- Invest in a fund replicating the US marketplace.
- Invest in American bonds.
- Never withdraw more than than 4% of your investments.
- Reinvest dividends.
CRITICISM
- The writer just proposes investments with Vanguard. He claims to not be paid by them, which I believe. But lacks other alternatives.
- VERY United states of america focused.
Overall, the author proposes a fork of the Purchase&Agree strategy with less diversification, some behavioral treats as well every bit detail details for his investment strategy. A recommended volume.
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Things to avoid
1. Avoid debt.
2. Avert fiscally irresponsible people. Never ally i or otherwise give him or her access to your money.
3. Eliminate all non-essential spending
4. Avert investment advisors.
5. Never buy stocks on margin.
6. Safety is a bit of an illusion. Don't fall for it.
7. Spending as well much time worrying about how things might piece of work out. It's a
Things to avoid
i. Avoid debt.
2. Avert fiscally irresponsible people. Never ally ane or otherwise requite him or her admission to your coin.
3. Eliminate all non-essential spending
4. Avoid investment advisors.
5. Never purchase stocks on margin.
6. Safe is a scrap of an illusion. Don't fall for information technology.
vii. Spending too much time worrying about how things might work out. Information technology'southward a huge waste. Don't do it.
On Saving and thrifty lifestyle
1. Save and invest unwavering 50% of your income.
two. The beauty of a high savings rate is twofold: You lot learn to live on less fifty-fifty as you have more to invest.
3. When y'all can live on four% of your investments per year, yous are financially independent.
4. If your lifestyle matches or exceeds your income, you are a slave.
five. Better to arrange yourself and your attitudes to the numbers than to adapt the strategies to your psychological condolement levels.
6. If financial independence is your goal, your savings charge per unit in these years should be loftier. As you invest that money each month it serves to shine out the marketplace'south wild ride.
seven. Be persistent. Life is uncertain.
On Stock market and Investing
one. Investment rules: Rule #i: Never lose money. Rule #ii: Never forget rule #1
ii.The stock market is a powerful wealth-building tool and you should be investing in it.
3. Embrace indexing.
iv. Crashes, pullbacks and corrections are all admittedly normal.
5. Any investing done brusque term is by definition speculation.
half-dozen. Market timing is an united nations-winnable game over time.The indicate is that to play this market timing game well even once, you need to be right twice: First you lot need to phone call the high. And so y'all need to call the low.
vii. The market place always recovers. Always.
eight. Everybody makes coin when the market is rising. But what determines whether it volition make you wealthy or leave you bleeding on the side of the road is what you do during the times it is collapsing.
9. Most people lose money in the stock market. Here's why: 1. Nosotros think we can time the marketplace. 2. Nosotros believe we can pick individual stocks. iii. We believe we tin pick winning mutual fund managers.
x. By dollar cost averaging you are betting that the marketplace will driblet, saving yourself some hurting. For any given year the odds of this happening are only ~23%. Merely the market is nearly 77% more than likely to rise, in which case you will have spared yourself some gain. With each new invested portion you lot'll exist paying more for your shares.
xi. Put all your eggs in one basket and forget about it.
On F-You Money
1. Money is a small part of life. Simply F-You Money buys you the liberty, resource and fourth dimension to explore information technology on your ain terms. Retired or non. Enjoy your journeying.
two. Once you take your F-You lot Money, all you need do is make sure yous continue to reinvest to outpace aggrandizement and go along your spending beneath the level your stash can replenish.
iii. Yous're young, ambitious and here to build wealth. You're out to build your pot of F-You Coin ASAP. You're going to focus on the best performing asset class in history: Stocks. Y'all're going to "get your mind correct," toughen upward and larn to ride out the storms.
Highly recommended read!!
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If you ARE that kind of person, this volume is worth reading. It is an easy read. Information technology is easy to reference. Information technology is immediately applicative. And information technology will probably tie together a lot of your
The kind of person who reads this book is the kind of person who already knows well-nigh the concept of financial independence, alphabetize funds and the "four% dominion." The kind of person who reads this book is asking themselves if they will be able to retire a millionaire in their 30s or if they will take to await until their 40s.If you lot ARE that kind of person, this book is worth reading. It is an easy read. Information technology is easy to reference. It is immediately applicable. And it volition probably tie together a lot of your finance/investing knowledge into one pretty bundle.
If you ARE Not that kind of person, this book is a must-read! Investing is simpler and safer than y'all recollect. "F-You Money" is more important than you imagine. And there are many wolves that are trying to eat up all of your wealth. Let Jl Collins save you lot from the wolves and requite you an optimistic motion picture of your fiscal futurity.
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If you're looking for a way to make a quick buck, this isn't the book for y'all. Just if yous are interested in a book that explicitly lays out sound principles and communication and encourages financial dis
Now that I'm done reading The Simple Path to Wealth by JL Collins, I experience confident in recommending it to any and everyone. If something were to happen to me and I needed to leave one fiscal tool to my kids, it would be this book. This book helped to reaffirm and clarify my personal financial values.If you're looking for a fashion to make a quick buck, this isn't the book for you. But if yous are interested in a book that explicitly lays out audio principles and advice and encourages financial discipline and fortitude to reach financial independence, then look no further. It consolidates the basics of stock marketplace investing clearly and concisely.
This was a keen read.
...more than This book made a small part of me excited how compound interest grows over a long time. The field of study made a bigger role of me depressed that money fucks a lot of people over and this books actually betrayal
I used to have to listen to Remy and Tim and Mitch and Jeremy bang on about investing while I was trying to actually create something beautiful while painting at the dining table instead of the absolutely pointless, complex, exclusive, cold, unsexy, fairytale money. Now I have read a book near it.This book made a small part of me excited how compound interest grows over a long time. The subject fabricated a bigger part of me depressed that money fucks a lot of people over and this books actually exposed how trapped we all are in debt and ever expanding lifestyles. I remember I desire to be like the monk in the parable at the start.
Unfortunately money stuff is something nosotros all take to do so I would recommend this book I think. 3 stars is loftier praise for such a flaccid topic when compared to a 1000 page epic fantasy novel covering multiple characters perspectives in a fourth dimension of upheaval in Roshar past the Lord Brandon Sanderson
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Ch ten - Keeping information technology simple: considerations and tools
* You just need these two tools: VTSAX, VBTLX
Ch 12 - Bonds
* When yous buy bonds, you're loaning money to a visitor or regime agency.
* Municipal bonds are issued past governments and government agencies at the state and local levels to fund public work projects like schools, airports, sewer systems, etc.
* Municipal bonds are exempt from federal-income taxes and usually from country income taxes for the country t
Ch 10 - Keeping it simple: considerations and tools
* Y'all just need these ii tools: VTSAX, VBTLX
Ch 12 - Bonds
* When yous buy bonds, you're loaning coin to a visitor or regime bureau.
* Municipal bonds are issued by governments and authorities agencies at the state and local levels to fund public work projects like schools, airports, sewer systems, etc.
* Municipal bonds are exempt from federal-income taxes and commonly from land income taxes for the land they're issued.
Ch thirteen - Portfolio ideas to build and keep your wealth
* There are studies that bear witness holding a 10-25% position in bonds with 75-90% stocks volition actually outperform a position holding 100% stocks with less volatility merely requires some rebalancing from time to fourth dimension.
Ch 14 - Selecting your asset allocation
* Calculation much beyond 25% bonds begins to injure results.
* You lot might also want to rebalance whatever time the market makes a major move (20%+) up or down, so you can purchase shares in the asset that lagged.
* It'due south best to agree bonds in tax-advantaged accounts, merely it does complicate rebalancing.
* The results show the rebalanced portfolios outperformed merely past a very small-scale margin that may be attributed to noise.
Ch 15 - International funds
* Here are two ex-United states options: VFWAX, VTIAX
* In that location's also a world stock index fund, VTWSX, which allocates 50% to US stocks but has higher costs than the prior 2
Ch 19 - The 401(grand), 403(b), TSP, IRA and Roth buckets
* VTSAX is revenue enhancement-efficient, go along in taxable.
* Put VBTLX in tax-exempt and whatsoever municipal bonds in taxable.
I think that'southward what I needed the about — real, myth-destroying chat about long-term way of accumulating wealth. I deeply respect the author for that.
His principles are uncomplicated, just every bit the title suggests. Avoid debt, spend less than you earn A book that doesn't tell you lot the "cloak-and-dagger fashion" of getting rich fast. Nor does it tell you lot the manner of picking the all-time stocks that will fly to the moon. It certainly doesn't tell you anything new than what you already know, but, possibly, don't believe.
I think that'south what I needed the almost — existent, myth-destroying conversation nigh long-term fashion of accumulating wealth. I deeply respect the author for that.
His principles are elementary, just as the title suggests. Avoid debt, spend less than you lot earn and invest the surplus. He provides dandy arguments for why i should practice that and how. Truly great book for those who aspire to be financially literate. Unfortunately it is very US based, then I cannot give it the highest rating. ...more
I love J.L. Collins' site (jlcollinsnh.com). I similar his book too. It's pretty much the same kind of content, simply more edited - less snarky, a flake less controversial. I'm surprised "Why your business firm is a terrible investment" wasn't discussed, really. I did capeesh his perspectives on the wealth-conservation
This book is squarely about the slow-and-steady side of financial independence. It's not really almost gaming the organisation or getting out of debt or complicated investment strategies and such.I dearest J.50. Collins' site (jlcollinsnh.com). I like his book too. It'due south pretty much the same kind of content, merely more edited - less snarky, a bit less controversial. I'm surprised "Why your house is a terrible investment" wasn't discussed, really. I did capeesh his perspectives on the wealth-conservation stage though. I've seen a lot of information on the wealth-building side of things, simply it'southward nice to see what's notwithstanding coming up (RMDs, an actual withdrawal programme).
I don't really follow everything he advises (I have some bonds and international exposure), but his is definitely a feasible path, in my stance.
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Enter The Elementary Path to Wealth.
While I have no thought if I tin stick to saving 50% of my income, or have conviction
Now a couple years into my 30s (and thoroughly freaked out at where the time has gone), I've finally gotten to a bespeak where I'grand willing to budget (a give-and-take that made me blench before) and program for a future that doesn't have me doing what I've spent the final 10 years trudging through. I'm dreading the passing of another decade where I'm still doing the same thing with no end in sight.Enter The Simple Path to Wealth.
While I have no idea if I tin can stick to saving l% of my income, or accept confidence that the The states won't one day implode taking all my future investments with information technology, I exercise feel better about managing my finances than I did a week ago. Can't go wrong if y'all're at least doing something to build toward financial independence, correct? May not happen according to the planned timeline, but I feel like information technology will happen.
I definitely recommend this for anyone looking for more info on investing or trying to attain financial independence (that magical point where we don't have to work to pay the bills). You'll withal demand to look for some outside info to make full in the blanks when it comes to your ain financial situation. For me, it's the mountain of school debt and trying to effigy out how much to allocate where; saving/investing, plus paying down debt simultaneously. But this book has definitely answered a ton of questions. It has managed to exist very simple, though when things get a bit more than technical, there are areas I need to reread to get the picture. Just overall, for a finance book, I think the term "simple" is accurate.
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The book is very accessible, it explains important concepts gracefully and simply, does so with humor and empathy, and without self-help book cliches. I highly recommend information technology to anyone who never gave serious thought to long-term personal finances.
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Acquiring wealth appears to be one of the simplest things to do, but not necessarily the easiest.
This book lays information technology all out, in elementary terms and manageable bite sized chunks. Investing doesn't have to exist scary; Jim does a bang-up chore o
Nosotros are paying our firm off this month and, after doing so, volition be completely debt gratuitous. This gives usa quite a bit of financial liberty but too gives usa interruption: what do nosotros do with our income now? Where do we put it so information technology will piece of work for us and not the other mode around?Acquiring wealth appears to be i of the simplest things to practise, just non necessarily the easiest.
This volume lays it all out, in unproblematic terms and manageable bite sized chunks. Investing doesn't have to be scary; Jim does a great job of explaining it all using easy to understand terms, familiar analogies and a few humorous anecdotes.
All of that said, though: it'south still a book about money. It volition only be exciting to you lot if yous're at a point where y'all tin afford to invest half your income, or if you're just really, really into this kind of thing.
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I only wish information technology had more of a European/International perspective, I gave this book
Over dinner a few months agone, I asked a colleague what should y'all invest in? He recommended I read this book and goodness I wish I had sooner. JL Collins actually lays this downwards in the most simple, easy to assimilate way possible. Making your money work for you shouldn't exist complicated and the rationale behind his reasoning is pretty solid. Then simple information technology is apropos how much fiscal managers profit off our ignorance.I merely wish information technology had more of a European/International perspective, I gave this book 4 stars as a result - information technology felt like 25% of the content was exceptionally Usa centric (IRAs, 401Ks etc). Withal the underlying principles are the same. Avert debt, spend less than y'all earn and invest the surplus in index funds.
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This book helped calm me during the early stages of the coronavirus recession.
Note This is heavily US biased, simply the early chapters are super relevant for anyone t
I actually enjoyed this. Information technology's curt, nevertheless practical and easy to digest investment advice. I recommend for anyone interested in starting their investment journey or anyone looking to simplify their investment approach. The author is insightful and piece of cake to follow forth with, fifty-fifty when things start to get a bit technical in later chapters.This book helped calm me during the early stages of the coronavirus recession.
Note This is heavily United states biased, but the early chapters are super relevant for anyone that has admission to investing in US stocks, thus I withal recommend giving it a read if you're non American.
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This is probably the best personal finance book I will ever read. J.Fifty. Collins investment strategy is based on the central premise that happiness is no
"Finish thinking about what your money can buy. Start thinking about what your coin tin earn." … "There are many things coin can buy, merely the most valuable of all is freedom. Freedom to do what yous want and to piece of work for whom you respect. Those who live paycheck to paycheck are slaves. Those who carry debt are slaves with even stouter shackles."This is probably the best personal finance book I will always read. J.L. Collins investment strategy is based on the fundamental premise that happiness is not achieved by purchasing luxuries, only past obtaining the psychological benefits that the freedom from needing to work provides. By investing a significant portion (50-75%) of i's after-tax income into low-cost index funds, every developed living and working in a start-globe land is capable of achieving financial independence after just v to twenty years in the workforce (see The Shockingly Unproblematic Math). With the assistance of compound interest, capitalism, and the advice of blogs and books about how to reach a loftier savings rate, frugality in our twenties and thirties opens upwardly an unprecedented degree of autonomy from our employers in our forties and beyond.
The simplicity of the author's path to wealth comes from an investment strategy that can be boiled down to ane sentence: One time any high-interest debts are paid off, invest at to the lowest degree 50% of your income into the VTSAX mutual fund, and transfer some of your assets into VBTLX when y'all arroyo fiscal independence. That's all that's required, once you adopt the mindset that wealth is a function of fourth dimension rather than possessions.
The simply reason this volume doesn't go five stars from me is because and so much of the second half is irrelevant to my current situation as someone who is merely entering the workforce. The book'south advice on the different tax-advantaged retirement buckets, and the lodge to withdraw assets from said buckets in retirement, will no doubt exist obsolete by the time that I have accumulated the wealth to act on the information. Many of the author's reasons to avoid investing in international stock markets have been responded to by Vanguard'south launch of the VTWAX fund, and some calculations in the back half of the book are out-of-date following the Trump tax cuts. Fortunately, the author periodically posts articles on his blog about how he has updated and slightly revised his own portfolio. I conceptualize that J.L. Collins volition publish a revised and updated 2nd edition when plenty fourth dimension has passed. - May 2019
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This book didn't have any major new insights for me, but was a great, funny and engaging reinforcement of the core principles. Save lots and use depression-cost index funds. JL Collins is a great author but earlier you read the volume, lookout man a few of his videos on YouTube and then you "hear" the boo
Every few years it's practiced to re-read your favourite personal finance book (for me: Millionaire Teacher) or a similar volume that reinforces your strategy and encourages you to stick to it. Learning through repetition.This book didn't have any major new insights for me, but was a great, funny and engaging reinforcement of the core principles. Save lots and use depression-cost index funds. JL Collins is a great writer but before you lot read the book, spotter a few of his videos on YouTube so you lot "hear" the book in his great voice.
I had a few interesting insights and new takeaways, or at least major differences from Millionaire Teacher.
1- Millionaire Teacher proposes a % of bonds in your portfolio roughly equal to your age (and so for me, mid-30s). JL Collins suggests that's overly conservative; in your "wealth aggregating" phase he suggests 25% bonds as the upper limit, and the target limit for retirement. Keep those dollars working for you.
ii- Collins suggests the common advice of international diversification is non required, and that the huge number of giant multinationals in the USA makes US-index investing essentially global. The Us is a global capital-generating machine, so get all-in, he says. No risks of poorly regulated markets (developing countries), over-regulated markets (Eu), or wild card markets (Russia, Prc). Whereas Millionaire Teacher's advice is your age = your bonds %, then equal parts Canadian, The states, and International Indexes for the remainder. Collins (and this other volume on geopolitics I read recently) have me convinced.
three- A flake of a kicking in the donkey about non trying to time the market or keeping cash on the sidelines. Put "your employees" (all your dollars) to work for y'all and don't try and time it, especially if you're in it for the long haul. Fourth dimension in the market beats timing the market.
All in all, a great read merely minus 1 star: it'south an American volume and so all of the details about 401(k)'s and Roth IRA's aren't straight applicative. Nigh ideas transfer and Collins tries to limit United states-specifics to a few chapters, but I wouldn't recommend this to Canadians unless you've already read Millionaire Teacher or Wealthy Barber or something Canada-specific.
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Cons - Those who know me know I subscribe heavily to Dave Ramsey's philosophy on the importance of getting out of debt first to build wealth. This book is focused more on teaching yous how to invest and spends little time talking about strategies to get out of debt - so if you've non nonetheless read "The Full Money Makeover" - I'd showtime there earlier giving this one a read. I also strongly value charitable giving equally a office of our wealth building program, however, this book conceptualizes giving as a way to achieve revenue enhancement deductions equally an end goal, and so don't look much advice in this arena.
Pros - Collins writes this book equally if he were giving financial advice to his 25 yr quondam daughter. He understands that most people don't want to go investment experts - they simply want to become some bones education on what they should practise for retirement. Mail service Ramsey days - I've been fully converted to believe that an index fund investing approach is the best approach to building wealth, and the data would support this. This book breaks it down in (generally) elementary and easy to understand terms.
Overall, 4 out of 5 stars. A great read.
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I was already enlightened of many of the investment strategies recommended by the writer. Nevertheless, the manner he kept that simple, short will make it like shooting fish in a barrel to empathize for a noob and that is a big win here. I am going to recommend this to my friends who're in the "wealth aggregating" stage.
If you lot're one of those who had rightly predicted BITCOIN/ TESLA growth and invested on those, more power to you and this book isn't for you :)
I was always thinking/ convi
I am one amidst many leading towards F.I.R.E.I was already aware of many of the investment strategies recommended past the writer. Yet, the way he kept that unproblematic, brusk will make information technology easy to understand for a noob and that is a big win here. I am going to recommend this to my friends who're in the "wealth accumulation" phase.
If yous're 1 of those who had rightly predicted BITCOIN/ TESLA growth and invested on those, more ability to yous and this book isn't for you :)
I was ever thinking/ disarming that investing on index funds gives an average yield on-par with the market. This volume convinced me that this will be 1 of the all-time render vehicle out there. (with a very few exceptions).
Also, this book is heavily focussing on US related financial independence. Non-US friends might not get much do good out of this except the overall concept of tracking the index.
My main takeaway - DCA (Dollar Cost Averaging) isn't good. It'south debatable but I am sold on his justification and I am loser doing DCA for the past 3 months when the U.s. marketplace grew over 10% :/
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Some of his goals are lofty (investing l%+ of your income) if you don't follow all of his advice (wait until your fully financially independent before having kids), but the concepts yet employ, even if you're not ready to make like Abraham and Sarah in your family-planning strategy. Mos
Collins lays out one of the simplest approaches to investing (including which index fund he uses) and provides a compelling argument for putting all of your eggs in that one handbasket of a total marketplace index fund.Some of his goals are lofty (investing 50%+ of your income) if you lot don't follow all of his advice (wait until your fully financially independent earlier having kids), but the concepts still apply, even if y'all're non ready to make like Abraham and Sarah in your family-planning strategy. Almost notably, he changed my mind about dollar cost averaging.
Lots of basics and bolts about decreasing taxes with investment vehicles equally yous approach retirement, merely overall an enjoyable ride and lots of material I'll be referring back to.
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