The Simple Path to Wealth by JL Collins
Finished reading The Simple Path to Wealth a few days ago, so I thought I'll share my thoughts on it.
Why did I pick up this book? I don't exactly remember how I heard about JL Collins' book, but somehow I did and that lead me to reading the first few pages of his book. I liked what I read and decided to purchase the book. Before picking this up, I was looking for another book on personal finance that is mainly focused on getting out of debt. That wasn't exactly what this book focused on, but I liked it nonetheless.
What did I like about this book? Everything. I liked everything about this book.
- Reading this book is like getting financial advice from your dad or your trusted uncle. It is direct, straight to the point, no bullshit financial advice. It comes off that way because the book was actually inspired by JL Collins giving financial advice to his own daughter.
- The chapters are short, bite-sized chunks that you can read in less than 15 minutes or so. This means that if you have a very short time to read, you'll still end up finishing a chapter and learn something in a short amount of time. I found that this encouraged me to pick up the book again any chance I could get.
- While the chapters are short, which might make you think they are just generic information, they are not. Most of the information provided in the book seems well researched and most are coming from experience. What I mean to say is, they make sense to me.
- This book is mostly focused on how to use investing to build your wealth and be financially independent. I would say 90% of the book covers investments and the stock market, while only 10% is general advice on personal finance issues. This was a good surprise for me because it answered a lot of questions I had about the stock market and how it relates to 401Ks and retirement planning.
- If you wanted to learn how best to utilize your 401K or other tax-advantaged accounts with regards to building wealth or planning your retirement, this is a good book to read.
- If you wanted to learn the simplest way to invest in the stock market to build your wealth, this is a good book to read. He really does makes it simple. There are only two types of funds to invest in and both are index funds. His advice on portfolio allocation can't be any simpler.
- He focuses on Vanguard and their index fund offerings, however he offers advice on which fund to invest in if you don't have access to funds from Vanguard.
- It answered a lot of my questions on how retirement works, like:
- What are Required Minimum Distributions? When do they take effect?
- How do they affect the tax bracket you are in when you retire?
- How to make sure you don't burn through your retirement savings before you pass away?
- How does Social Security factor in during your retirement? And more...
What I didn't like about this book? Not really a dislike but more like a surprise. When I got this book I thought I was getting a book about how to get out of debt and build your wealth, but as I've said above, the majority of this book focuses on investing into the stock market to build your wealth and less about how to get out of debt. Again this is not a bad thing, just not what I was expecting.
For international readers, note that this book is mainly catered to US readers. Most of the discussion on 401K accounts and the tax system might not be applicable to international readers. The concepts and ideas he shares will carry over, but not the specifics that the book discusses.
Rating I give this book a 5/5 rating. The author really did share a simple path to wealth in this book. Not saying this is the best path to building wealth, but a path that should be considered because it really is simple.