The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

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The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life Audible Audiobook – Unabridged

JL Collins (Author, Narrator), Peter Adeney (Narrator), Audible Studios (Publisher)

4.7 13,582 ratings

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This book grew out of a series of letters to my daughter concerning various things - mostly about money and investing - she was not yet quite ready to hear.

Since money is the single most powerful tool we have for navigating this complex world we've created, understanding it is critical.

"But Dad," she once said, "I know money is important. I just don't want to spend my life thinking about it." This was eye-opening. I love this stuff. But most people have better things to do with their precious time. Bridges to build, diseases to cure, treaties to negotiate, mountains to climb, technologies to create, children to teach, businesses to run.

Unfortunately, benign neglect of things financial leaves you open to the charlatans of the financial world. The people who make investing endlessly complex, because if it can be made complex it becomes more profitable for them, more expensive for us, and we are forced into their waiting arms.

Here's an important truth: Complex investments exist only to profit those who create and sell them. Not only are they more costly to the investor, they are less effective.

The simple approach I created for her and present now to you is not only easy to understand and implement, it is more powerful than any other.

Together we'll explore:

Debt: why you must avoid it and what to do if you have it
The importance of having f-you money
How to think about money, and the unique way understanding this is key to building your wealth
Where traditional investing advice goes wrong and what actually works
What the stock market really is and how it really works
Why the stock market always goes up and why most people still lose money investing in it
How to invest in a raging bull or bear market
Specific investments to implement these strategies
The Wealth Building and Wealth Preservation phases of your investing life and why they are not always tied to your age
How your asset allocation is tied to those phases and how to choose it
How to simplify the sometimes confusing world of 401(k), 403(b), TSP, IRA, and Roth accounts
TRFs (target retirement funds), HSAs (health savings accounts), and RMDs (required minimum distributions)
What investment firm to use and why the one I recommend is so far superior to the competition
Why you should be very cautious when engaging an investment advisor and whether you need to at all
Why and how you can be conned, and how to avoid becoming prey
Why I don't recommend dollar cost averaging
What financial independence looks like and how to have your money support you
What the Four Percent Rule is and how to use it to safely spend your wealth
The truth behind Social Security
A case study on how this all can be implemented in real life

Listening Length

6 hours and 38 minutes
Author

JL Collins
Narrator

JL Collins, see all
Audible release date

June 27, 2017
Language

English
Publisher

Audible Studios
ASIN

B0725RFDPY
Version

Unabridged
Program Type

Audiobook
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Product details

Listening Length	6 hours and 38 minutes
Author	JL Collins
Narrator	JL Collins, Peter Adeney
Whispersync for Voice	Ready
Audible.com Release Date	June 27, 2017
Publisher	Audible Studios
Program Type	Audiobook
Version	Unabridged
Language	English
ASIN	B0725RFDPY
Best Sellers Rank	#544 in Audible Books & Originals (See Top 100 in Audible Books & Originals) #2 in Retirement Planning (Audible Books & Originals) #3 in Retirement Planning (Books) #5 in Investing & Trading

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4.7 out of 5

13,582 global ratings

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Oluwaseun Salami

Great Read!!!

Reviewed in the United States on March 17, 2024

Verified Purchase

Filled with introductory wisdom on investing and finances. Some technical jargon but definitely basic for any reader to digest and enjoy. The language of the writer also makes it very accommodating and easy to understand for the most pedestrian of people, like me.

5 people found this helpful

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Griffin

Life changing book, no frills, no gimmicks

Reviewed in the United States on February 19, 2024

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JL Collins The Simple Path to Wealth is one of the best personal finance books I have ever read. This book is full of to the point, practical, realistic advice not hidden behind some gimmick or get lucky situation. Let me be clear, none of this book is revolutionary or insider information that Mr Collins was privy to. It is just full of sensible investing personal finance information. I have read several of the other iconic personal finance books out there, and this one is leaps and bounds ahead of them in my mind. Nothing has been so clear in explaining the reason behind their advice better than this one. If there was any book that I could recommend be required reading for a high school or college graduate, it would be this one.

6 people found this helpful

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Eric Palomar

Simple. Straightforward. Perfect.

Reviewed in the United States on April 1, 2024

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This book's format is perfect. Many short and simple chapters deal with every financial question. It also has a financial advice list at the beginning and end of the book to summarize all the topics dealt with quickly.

Simplicity is king.

6 people found this helpful

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Avid Reader

Solid retirement advice, but reads like a love letter to Vanguard Index Funds!

Reviewed in the United States on September 7, 2023

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To summarize the advice in this book (which I've seen similar advice given in other books), readers are encouraged to start saving early in their career, live below their means, avoid debt, and invest most (if not all) of their retirement savings in Vanguard stock index funds b/c over long periods of time index funds like this one tends to outperform 99% of professionally managed mutual funds and retirement funds managed by financial advisors. I totally agree with this advice. However, some of the author's other advice seems impractical for most folks, including the following:

-live on 50% of your take-home pay and sock away the rest in savings - which he says is "perfectly doable" if you have no debt (that's easier said than done!)

-save up large amounts of savings early in your career so you can have what he calls "F-you money," which the author has used during his career to quit jobs that he didn't like and stay home for upto a few years at a time (this might be fun, but doesn't strike me as good advice for building a successful career)

-"avoid fiscally irresponsible people and certainly don't marry one." (kinda hard to follow this advice if a person already has a spouse/close family who fall into this category)

Bottom line is that this book is a nice reminder of retirement basics and gives more than a few compelling reasons why stock index funds (like the Vanguard VTSAX) are better bets for long-term savings performance. But read it with a grain of salt as the author seems to gush over the Vanguard backstory and also offers some extreme advice that may not fit most people's lifestyle. 👍

50 people found this helpful

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Stephen S

I detailed why I awarded the author five stars.

Reviewed in the United States on September 14, 2016

Verified Purchase

I liked the author’s podcast interview by the respected, data-driven and the whimsical Mad Fientist. I bought this book for two important reasons: it was self-published and the author’s persistent reference to Jack Bogle’s genius. I support self-published financial authors because the traditional publishers deploy editors to tweak the author’s voice, and original story, to make the final “processed” book more sellable. Instead, self-published authors do not have to satisfy shareholders or generate sales, so the author’s message about Bogle’s investment philosophy and the company he founded, Vanguard, remains organic for the readers’ best interest.

This book is perfect for beginners, and some seasoned investors who are sick and tired of searching for that short-term investment miracle. Collins stuck with Bogle’s purest message from the beginning to the last word. As a Bogle devotee myself, I appreciate his courage to stand up, write a terrific book and argue effectively for the powerful and low-cost indexing strategy and against the delusional appeal of day-traders, hedge fund managers, active management strategies, timers, or individuals who claim they can successfully speculate and win big. Far too many normal investors get caught up in those phony, but exciting fantasies and lose. The new guy or gal investor gets the skills to construct a simple portfolio you understand, and then have the courage and the confidence to permanently ignore the media’s seductive financial noise machine.

The Simple Path to Wealth's basic message to beginners is well-known in the Do It Yourself (DIY) and ESPECIALLY for the Youthful Financial Independence (aka FI and FIRE Financial Independence Retire Early) community.
• think long-term
• live below your means
• plan ahead with a fully diversified portfolio (except international stocks, more on this below)
• invest in Vanguards low-cost index funds

Sooooo, what is not to like? I’ll admit it’s a boring plan, and not all DIYers embrace it. But I love my boring plan and it’s exactly where the power of what we can do lies—after setting up our plan, we must be patient.

Collins writes much about psychology, for good reason. The power lies with us. It's not us versus the big intimidating stock market. With time and experience, we learn to be psychologically tough for long periods of time. In the movie Wizard of OZ, Glenda told Dorothy that she “always had the power to go home again?” It's the same for us investors. All of the features of constructing a balanced plan remains under our control. It fairly easy to learn. But the hard part is the unfair and counterintuitive psychology. Thinking long-term is the best antidote. Over time the growth will pay enough of a return to meet or beat the inflation rate. Meeting or beating inflation is a simple, realistic goal, and psychologically attractive. This book shows you how to like saving with minimal time and effort to discover the investing process.

Patience, psychology, and philosophy are a difficult sell. Many investing aficionados are more interested in the adrenaline rush and chasing the opposite sex than building wealth over time. The market is not something to conquer or control. It is simply made up of wonderful organizations of hardworking people, called publicly traded corporations. The author explains how to harness all of that positive corporate energy, and just flow with it, whether it goes up or down, and over time it goes up. The author addressed the tough sell challenge with elegance and subtle toughness.

The author discusses investment costs, taxes, tax-deferred retirement plans offered by employers, the retirement years and strategies to keep from running out of money. My favorite chapters are “Why I don’t like Investment Advisers” and “Some final thoughts about risk.” Financial advisers are an easy target with hundreds of reasons not to like. Most of us DIYers will never need a financial adviser, for two good reasons: Collins writes “Nobody cares about your money more than you do,” and “you can learn to manage your money yourself with far less cost and better results.” From my personal experience, knowing how to save investment costs alone was enough to pay cash for the Tesla Model S.

On the subject of risk, my favorite part, and I quote as the author was speaking to the zombie apocalyptics among us especially the financial media: “Major Armageddon extinction events, like the asteroid that took out the dinosaurs some 65 million years ago, have happened about five times. So that’s about one every 10 million years or so. Are we really arrogant enough to think it’s going to happen in the geological eye-blink we’ll be around? That we’ll be the ones to witness it? Not likely.” Economic Armageddon ain’t going to happen either.

There are a few minor omissions. The author is not well known, so he needs to talk more about himself about what he did. I felt like he had more to say as examples of his fears of risk and the mistakes he made. All of that would have made the book even more authentic and organic. What was the role of his wife? What exactly did the author and his wife do for a living? He did report that he worked as a financial analyst. So, was he in the financial industry? He did not explain why he had an overly aggressive portfolio for an individual in his 60s. He did not share his diversification plan, except that he doesn’t own international stocks (he explains why).

Consequently, I give him an A for telling us how to set up a portfolio and his rationale, but I give him a B for not showing what exactly he did and for how long. His rationale is spot on, but portfolio construction and asset allocation strategies and information can be found in many books (The Boglehead Guide to Investors, any book written by Jack Bogle or his followers, Ferri, Swedroe, Roth, and Bernstein).

• Some other minor items that I found perplexing and discouraging for people starting out. On page 246, he writes, “Save and invest at least 50% of your income.” What? I reread this twice, and could not comprehend why the author wrote this. In my working career, I could not even contribute the maximum allowed in my 403(b) plan let alone save 50% of my income (No, I never had new car payments because I could not afford car payments and invest too). Yet, I reached financial independence at age 61. 50% of one’s income is overreaching and dangerously discouraging (unless you are a highly elite and talented employee with a 7 figure income). For the rest of us, just start with what you can afford. For example, I started at age 37 with $200 a month in my 403(b), and that was a lot out of my meager income. But I kept it up for 24 more years.

• Back to his strategy about avoiding international stocks. The author knows he will get pushback, and he probably has heard my argument for international investing many times. Mr. Collins is just following Bogle's advice about keeping it simple. But one can have it both simple and fully diversified worldwide by one fund. Diversification means investing in all available stocks, worldwide. So, let’s take advantage of these opportunities to invest in just one fund, the Vanguard Total World Stock ETF (VT). The author won’t have it. IMO, the author might be reflecting his age and the Familiarity/home bias that is so frequent with the silent generation. The author writes investing in the United States domestic market is enough diversification because of the worn-out 21st-century global connections argument. He offers what appears at first glance valid reasons, but they are out-of-date, and one about excessive costs is flatly wrong. Vanguard's Global fund charges .14%. I don’t know about you, but the opportunity to invest in all publically traded companies on the planet is inexpensive!

Also, I am 74 years old and old enough to remember my elders saying that is too risky to invest in foreign stocks. We are well into the 21st century and the world has changed. Don’t you think that international corporations want to grow and prosper too? Of course. Don’t you think opportunities for diversification have evolved for the better? Yes. I want as much diversification as possible to reduce equity risk, and reduce volatility. I might even get higher returns, but that’s not part of my expectations. The global index funds or ETFs make full diversification in just one investment a synch.

• Another minor objection is his downplaying the Roth IRA. I think he over-complicated with trying to predict the tax rate to decide to use or not use the Roth IRA. It’s futile and a waste of time to guess the future. Not having to pay capital gains taxes after investing in the Roth IRA is one of the best strategies for us regular investors (You can run the numbers on a brilliant Excel program created by The Finance Buff). After running the numbers on the Excel program, you will be thoroughly convinced to include the Roth IRA in your plan.

• One last objection. I recommend to readers who don’t have a “lump sum” that is, a bundle of money to invest already, that you ignore the “Why I don’t like dollar-cost averaging” chapter. I had to use DCA during my entire working career investing in my 403(b). Because I started from NOTHING and had less than $50,000 for years. If you have a lump sum to invest, follow the author’s advice. But I think I can speak for most investors who have little choice but to use DCA. His opinion about DCA was more discouraging than encouraging.

Collin’s strong opinions about some of his investment ideas represent more of his individuality than sound investment practice. Of course, the author never intended to be discouraging. I am just responding as a reader with a few of my opinions about his outstanding work. That’s perfectly fine for him as his opinions worked for him and they might work for you too. My opinions worked well for me. In the final analyses, he follows the “Boglehead” way. For that, I am delighted he wrote a great self-published book showing once again the work of the legendary investor, advocate, and teacher, Jack Bogle. Outside of these minor differences of opinion, Mr. Collins earned a well-deserved five stars.

In sum, if any author self-publishes a book about investing, I think it is important to readers to know that the message is organic—no other agenda item hangs in secret, other than to explain and layout a simple plan which will connect with new investors and get them results.

1,631 people found this helpful

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Rachel

Truly SIMPLE in all the best ways. He researched so we didn’t have to.

Reviewed in the United States on April 6, 2024

Verified Purchase

Love this book. So many good recommendations & it didn’t disappoint. I’ve read finance books for the past 10 years to help me get ahead and have had so many confusing tactics and suggestions. This is more of an easy, set/schedule and forget. It provides a ton of citing and reason behind the suggestions. Author did a fantastic job.

One person found this helpful

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Ricky

Great for beginners

Reviewed in the United States on April 14, 2024

Verified Purchase

Great book on how to invest in index funds and provides pros and cons of doing such

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Sandra Bye

Super helpful!

Reviewed in the United States on March 27, 2024

Verified Purchase

This book is easy to follow and super helpful! Breaks down the fundamentals of investing and how to better understand the market.

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Top reviews from other countries

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sheldon1234

The simple path to Wealth

Reviewed in Canada on December 17, 2023

Verified Purchase

This book is a beginner level book for those I would say are scared of money and investing. This book targets young Americans and teachers them how to do the very easiest investment that will build them income over many years. The author only talks about 2 different options to generate income. Vanguards stocks/bonds index funds

The books is useful for everyone however it talks about American accounts, tax laws, and markets. This book touches subjects, such as debt, stock prices rising and falling, holding out during tough times, how much to invest based on age/income etc

Very helpful book for beginner investors and those who get scared and confused with money. Targets American audience however Canadians and others can read it too and just skip the 5/6 American tax/account chapters

3 people found this helpful

Amazon Customer

Really simple and powerful

Reviewed in India on May 4, 2024

Verified Purchase

Three things I liked in this book
1. Simplifies Financial planning like index funds , no Debt 4% savin etc rather than making thing complex
2. Author share Personal examples and research well. Trinity research on 4% was an interesting share .
3. Usage of metaphors was fascinating e.g leeches for Debt

I am grateful to Mr Collins for writing this book🙏
Highly recommended.

Philip

5/5

Reviewed in Sweden on March 23, 2024

Verified Purchase

5/5