I have a long list of things I love about retirement (of course) and consistently near the top lies “the ability to stay up as late as I want whenever I want.” If I find a book that’s engrossing, I can finish it – no delayed gratification like those annoying cliffhangers on television. So, when JL Collins sent me a preview of his book, I giddily devoured it in one sitting.
Let me say first that I’m biased because I consider JL Collins a personal mentor and friend, but I have used his investment strategy longer than I have known him. I spent 2012 listening to what a bunch of people thought about how I could grow my money because, as much as I cherished my wall chart from Your Money or Your Life, the investing advice left me skeptical.
So I read and researched and JL Collins’ blog resonated. Not only did he emulate the life advice that Your Money or Your Life exuded, he also gave the investment advice that all the other Greats seemed to be leaning towards and which made the most sense to me. Best of all, he indulged my lazy tendencies with its simplicity.
That’s me in the “d”. I know you can’t tell.
So I’d been reading his blog for a while when he asked if I wanted to hang out with him in Ecuador, I was all like “umm, yeah! I’ve never been to Ecuador!” I was one of the first ones to sign up in 2013 (I actually have no idea if that’s true) and we met and hung out and he was as fabulous in person as he was through his blog, with a voice that cuts butter to boot. Together we formed a mutual admiration society and I pester him from time to time for his advice.
So when he told me he finished that book he’s been wanting to write, I switched on my pestering skills and he let me read it before he pushed the big red PRINT button. Hehe!
I forward his blog articles to people all the time, so I’m excited that my laziness can now extend even farther and I can just tell people to go read his book. Since this is supposed to be a book review of said book, here are some notes I made while reading it.
Thriftygal’s Yellow Marker Highlights and Margin Scribbling on “The Simple Path to Wealth”
“I’d happily put in more effort for more return. More effort for less return? Not so much.”
This sums up why the investment strategy is so brilliant. Managed funds are more effort for less return. Vanguard. Total Stock Market Index Fund. VTSAX. “Veetax” as my sister calls it. Fleshed out, thoughtful chapters on every possible angle of its superiority. My lazy soul was sold. This is my favorite part of the book.
Oh, and if you are somehow not exactly like me, (e.g. you don’t live in the United States, you’re in a different life stage, you want a wee bit less volatility), he has advice on your situation. Good call. I was always too uninterested to do this research and now I have a good reason to never do this research. Thanks, JL Collins!
“Sensible flexibility is what provides security.”
I want to hear this in a pop song because it’s fantastic. First, he give the best explanation of the 4% rule that I’ve read (it’s probably my favorite part of the book) and then he drops this little gem. Yes, the 4% rule should work and it’s a good guide to ease some of my anxiety, but I still need to pay attention and adapt as necessary.
“However, for the three years we both weren’t working, our net worth actually grew. It was the first time we fully realized we had moved beyond just having F-You Money. We had become financially independent.”
I love this. Oh, hey, I guess we’re financially independent. Cool. Any thoughts on dinner?
This is my favorite part of the book. The chapter title says it all – “It has never been about retirement.” It’s about freedom. Understand the philosophy and the numbers will take care of themselves. It’s the attitude, the approach to money that matters.
“There are many things that money can buy, but the most valuable of all is freedom.”
I say something similar. Mine is “the most valuable thing money can buy is freedom from worrying about money, yo.” I think the “yo” puts a certain elegance on it.
“Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.” — Groucho Marx
How have I never heard this quote that perfectly encapsulates everything I believe in?!
The lawnmowers at the hotel in Ecuador.
The one piece of advice that I disagreed with him on was his suggestion that if debt on your interest is less than 3%, you should pay it off slowly and invest instead. I think that’s logical and mathy, but my emotional sanity rests on me being able to cackle “I’m debt-free! Hehe! Debt-free!” I’ve become really good at cackling.
Really though, I could go on and on about the parts of the book that I like and plan to revisit — logistics on withdrawing money from investments, tax strategies, social security advice and charitable giving. The book is good and I’m so excited that it exists.
You are too! Let’s be real. There’s a good chance you discovered my blog after clicking on a link from JL Collins’ blog. You’re already sold. I’m preaching to the choir. Brother, testify!
I loved JL Collins’ stock series and I forward it to everyone who asks me for investment advice. I’m excited to get my hands on his book, thanks for the review so I have something to hold me over until then. Did you have any thoughts about the forward by Mr. Money Mustache?
As your last book recommendation was so good (How to Fail at Almost Everything, and Still win Big – by Scott Adams), this one is on the shopping list.
I’ve just bought the kindle version on Amazon.co.uk. Sadly I don’t think you will get any commission for that. I’m very sorry. I feel like I’ve cheated you out of $1. I’m happy to send that to you now, or if you keep tabs on average investment returns, if our paths cross say in 2037 I will settle up then.
Fellow reviewer of The Simple Path to Wealth too and yep – clicked to your site from his! I’m looking forward to reading more about your time in Ecuador! We are FI now and are hoping to make the trip next fall – hopefully Jim will be still be doing it then!
Awesome post and thanks for notifying us that he wrote a book. I will definitely be reading it soon!
Wonderful review, TG. Thanks!
And thanks for pointing out those typos on your read thru. It is a cleaner book now for it!
I love that you cackled in your review of his book. Jim Collins has definitely shared some excellent wisdom. Thank goodness!
Adding this to my reading list! I’m in the paying down debt phase right now and need to do more research on investing so I can get started next year. Can’t wait to check out your favorite part ; ) Also, I’m obsessed with llamas and alpacas, so this is now my favorite post of yours.
I too was in the same boat as you. I thought that I should pay off my mortgage (less than 3% interest) so that I have no more debt. But I understand what JLCollins is saying. Putting that money in the market will give you more returns (probably 6-7%) which is far better than paying off my mortgage early. I think it is a pretty good strategy to wealth building and getting rid of debt at the same time.
Thanks for the review. I’m definitely adding it to my reading list.
Why did you delete the comment about how your independence is due to your high income, rather than thrift? I thought his tone was a little mean, but don’t you think that’s true? For most people given their incomes, the math just wouldn’t work out to allow them to do what you have done. That doesn’t take away from your accomplishment – you earned it after all – but saying it’s about thrift seems to tell only half the story. It is very much about having high income, too.
@Pat – I do agree that my income helped me do it in such a short time. I deleted the comment you’re referring to because of the derogatory language.
@Pat: ” For most people given their incomes, the math just wouldn’t work out to allow them to do what you have done.” At 36, after rectifying having married the wrong spouse, I was busted near to flat: 10K in an untouchable retirement account, and that was it. At 56, I retired, debt-free. Along the way,
– put three kids through college
– had periods of unemployment aggregating about 2 years
– accumulated about 2MM and paid off a couple houses
In that time period I never had a salary over $65K. I did get about 20K in bonuses (which went immediately to principal) and 50K in gifts from my father, which went to student loans immediately. I am willing to admit I could not do what Ms Gal did. She was abnormally quick. But I did it, albeit sluggishly.
It’s a triangle. One side is compounding period, which you can control subject to God. One side is rate of return, and the better part of wisdom is to recognize that you cannot control that and most attempts to do so, especially if you have a high IQ, worsen your situation; hence index funds. The final side is thrift, the only side you can control. A positive of thrift is that as you practice it, it educates you., and those lessons extend into retirement. If you have schooled yourself to live on 10% of your income, you only need about 2.5 times your income invested at 4% net to provide it.
A comment better directed at some of the commenters on the Forbes articles: If you set out to do this, with ordinary life-luck and extraordinary frugality you will, though it will probably take longer than you hoped. If you announce that it can’t be done, the math is wrong, the stock market is going to collapse, not everyone has positive life luck so no one should attempt it, etc, etc, you certainly will not. And you’ll spend the time period when your frugal and industrious confrere is having the whale of a time learning how to save, pay debt, invest, run real estate, meet other optimists, grow self-responsible, and better the world, corroding in envy and bitterness.
@Simon – Love this comment!
@MsGal Thank you; praise from Sir Hubert is praise indeed.
+1 Simon.
Especially your last line!
It’s really inspiring to read your website and of course it is very informative too. I am at a very early stage of my career and seems like you have already got me into thinking seriously about early retirement and the investment ideas for it. I am especially happy to see these ideas and achievements of yours as a woman too. It just gets me to think that so this is not an infeasible idea.
Thank you! And have already started reading the books and blogs you have referred too!
Thanks for the advice on the book; I’ll have to check it out especially since I haven’t gotten to read the stock series posts yet! And congrats on the Forbes article!
Thanks for the review. I’ve been reading your blog along with JCollins, GGC & MM for a while now and I’m obsessed.
Book was delivered last night and I can’t wait to binge!
Groucho’s quote reminds me of an old line:
Life is like a sh*t sandwich; the more bread you have the less sh*t you have to eat.
I love your blog and crave that freedom so bad! Question for you – did you ever experience any ethical dilemmas when investing? I have a small sense of guilt for investing in big oil and other companies that might not align with my values.
No. I know that if I look hard enough, I can find an ethical dilemma for everything I purchase. I understand your pain, but I use it to funnel it more for my direct dollars rather than my investment dollars.