Book Review: The Simple Path to Wealth

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SPW cover finalThe Simple Path to Wealth

I was so excited when I found out that JL Collins, author of the awesome and witty blog jlcollinsnh.com, was writing a book!  I’ve been reading (and rereading) his blog for years. I’m thrilled that I now have all of that information (and more!) in a single book titled The Simple Path to Wealth.  While I was reading the book, I realized that I am definitely on my own path to wealth.  It took me some time to get there, but I am finally on an accelerated path to financial independence.  I have JL Collins to thank for showing me how.

In the first few pages of the book JL Collins has a list of guidelines that I would consider rereading every few months.  Probably my favorite guideline, and one that is extremely important to remember is:

“Money can buy many things, but nothing more valuable than your freedom.”

These guidelines are something that I would consider printing out and posting on my fridge!

F-You Money

JL Collins is all about having F-You Money!  If that means eating rice and beans, then so be it.  The Monk and the Minister parable in the beginning of the book is one of my favorites.  I think of it often when I’m thinking about how much I want to retire.  I would rather live on little than cater to the king.

This book is for anyone seeking financial independence.  It actually gives very clear instructions on how to do this.  The hard part for most people is to actually follow these instructions!  One of the instructions for anyone seeking financial independence is to save 50% of their income.  This is something that I can see many people struggling with, but honestly, it really helps speed things along!  My own net worth has been skyrocketing ever since I’ve been able to sock away 50% (or more) of my income.

Become Debt Free

The easiest way to save 50% of your income is to make sure you are debt free.  JL Collins has simple instructions for getting out of debt.  Simple, but not easy.  You need to get rid of debt!  The feeling of being debt free is like feeling like you are unstoppable.  Once you are debt free there is a ton of momentum on your back, and it won’t be long until you are at a 50% savings rate.

Investing

The bulk of the book talks about investing.  If you are someone who is new to investing, this book is a must read.  It explains the stock market, stocks, bonds, 401(k)s, IRA, HSAs and much more.  JL Collins also goes in-depth on why Vanguard is the one and only company that you should invest your money with. I’ve been happily investing with Vanguard for years now, but I still learned more about what a great company it really is.  I can’t wait for the day I can quit my job, and move my 401(k) money over to Vanguard!

Withdrawing Your Money

I used to wonder how to withdraw my money when I was finally retired.  In The Simple Path to Wealth, JL Collins explains how he and his wife pull money from their accounts when they need it.  It’s a lot simpler than what I thought!  Social Security is also covered in the book as well.

Afterword

The afterword is my favorite part of the book. In it, JL Collins explains the 10 year financial plan he has for his daughter.  It’s filled with wisdom.  It includes the following:

 “Avoid fiscally irresponsible people and certainly don’t marry one.”

If only I had something like this when I was starting out in the real world!  I haven’t been married (yet).  Unfortunately, I did spend seven years of my life with someone very fiscally irresponsible.  I left that relationship deeply in debt.  It took many years to dig myself out of that hole.  If I had a guide like The Simple Path to Wealth, I might not have been in that hole for as long.

This is a book that I will read again and again.  It’s funny, honest, and really easy to read!  JL Collins makes personal finance easy to understand.  This book is now on my list of personal finance books that I would suggest to anyone just starting out, or wanting to understand and get control of their money.

 

 

 

 

 

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