Knowingo
The cover of The Simple Path to Wealth

The Simple Path to Wealth

J. L. Collins, 2016

J. L. Collins explains how to avoid debt, save a large share of income, and hold cheap index funds through every crash until 4% of your assets covers your spending.

Get the app Read on the web

11 parts, about 21 minutes to read.

Why read it

  • Argues that spending less than you earn, avoiding debt and saving half your income buys the freedom to say no
  • Makes the case for one low cost total stock market index fund, with a bond fund and cash for a second portfolio
  • Explains why market crashes are normal, why investors often lose by timing and stock picking, and how to judge a withdrawal rate

Who it is for

  • Savers building wealth who feel overwhelmed by investing
  • Young earners starting a first investment account
  • People weighing debt payoff against investing

What the summary covers

  1. Simple rules for a rich life3 min
  2. Debt, freedom and the math of enough2 min
  3. How to think about money and markets2 min
  4. Crashes are coming, and they don't matter2 min
  5. Why most people lose money2 min
  6. Three tools and two portfolios2 min
  7. Bonds, other funds and Vanguard1 min
  8. Tax buckets and advisors2 min
  9. Magic beans2 min
  10. Spending 4%, maybe more2 min
  11. The first ten years, and risk1 min

Recommended by

  • Morgan HouselAuthor of The Psychology of Money
    Beautifully written, a simple book that will have a profound impact on your life.
  • Mr. Money MustacheFinancial independence blogger

About the author

  • J. L. CollinsAuthor of The Simple Path to Wealth
    • He earned a degree in English Literature from the University of Illinois at Champaign Urbana.
    • Before writing he worked as an ad agency founder, investment officer, consultant, sales trainer, radio talk show host and group publisher, among other jobs.
    • He launched his blog in June 2011 as a way to archive his financial lessons for his daughter.
    • The blog is best known for his Stock Series on investing.
    • In 2013 he started an annual Chautauqua retreat for the financial independence community, which ran for nine years and 17 events until 2022.
    • He is known in the financial independence community as the Godfather of FI, a name he says others gave him.
    • His second book, a cautionary tale about his real estate losses, came out in November 2021.

Read it alongside

  • Pushes backDie with Zero

    JL Collins tells young earners to save and invest at least half their income, even a modest one. Bill Perkins says someone with solid grounds to expect higher pay should not squeeze a lean present to save, since a fixed savings rate cannot suit every age.

  • Pushes backThe Algebra of Wealth

    JL Collins calls a house an expensive indulgence rather than an investment and warns against treating a mortgage as good debt, while Scott Galloway advises most people to make buying a home central to their plan, though it is sometimes unwise.

  • Goes deeperThinking, Fast and Slow

    Collins says long term investors should stay the course through crashes, and admits he once sold near the bottom. Kahneman shows that judging each loss on its own lets loss aversion override a run of favorable bets, and that a policy chosen in advance, when losses are bearable, steadies the choice

More books like this