The Simple Path To Wealth - An Interview with JL Collins
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- čas přidán 28. 05. 2024
- Today I get to bring you what is easily my favourite interview in my nearly ten years of the MeaningfulMoney project. It was my privilege to chat with JL Collins, author of The Simple Path To Wealth, which is quite simply the greatest personal finance book ever written.
Competition to win a copy of Jim's book: meaningfulmoney.tv/simplepath
Check out Meaningful Academy: meaningfulacademy.com
Love hearing this discussion as a new investor. I am 25 and realizing that having my money sitting in a checking account with almost zero returns is not a good idea for the long term.
Love this interview. JL Collins book is the 1 book that literally changed my life and my investing path. I had always been frugal and had 5 rental properties by 27, but the simple path to wealth introduced me to Index Funds!
The man is a legend, and no mistake.
MeaningfulMoney he definitely is!
Me too, the book changed my life. I'll always listen and be thankful to him.
Same here 1 year later :D
As well as buying your book on audible which is brilliant, I got Mr Collins book as well. This stuff is worth more than gold. Fact. 8-)
Both Pete's & JR's 'radio' voices are so soothing! Thinking of that reminded me how it's often said that people with voices for radio usually have faces for radio too! 🤨
Thanks for the discussion. I've probably listened to every JR Collins interview on CZcams and been a long-time follower of his blog. He always helps me be optimistic about the future - it's like getting a pep talk.
Absolute mad lad! The legendary JLcollins!
I wished I'd seen (and understood) this when I left school or university. It's never too late to benefit from his advice, but JL's formula tales 40 years to come to fruition.
My friend is not late at all! I’m on my 30s and starting now!
It also depends on your savings rate and how much you'll need to retire.
I wish I had the sense to begin as soon as I was working. All that wasted time. I'm making amends now.
To me JL is the expert in this industry because ordinary guys like me need practical tips like total stock market because we have other things to focus on and aren’t day traders nor finance gurus
What a great interview! I love his book and view on life !
Me too - can you tell?!
@@PeteMatthew I would never have guessed - you hid it so well :)
What timing! Little did you guys know the slump was a few weeks away....
I know, right?!
I recently rebalanced my 401k to the total s&p500 vanguard. I had been in a target date but even 30 years out it was still 10% bonds which is more conservative than I want to be. Additionally when I calculated the difference in fee between the vanguard and the tdameritrade target date at the point of retirement it was 90,000 dollars! That's a whole years worth of income. I really like when Jack Bogle said "The magic of compounding growth can be overcome by the tyranny of compounding cost"
great interview
Good guy and great book. My personal favourite financial book is The Total Money Makeover.
I know Collins is a fan of Ramsey as well.
That’s a great book too, Liam, for sure…
This book should be taught in EVERY SINGLE SCHOOL around the world! Highly recommend it! I wonder why is taking so long for schools to add it to their curriculum...🤔
Great content
Good advice, nothing flashy - save your money, invest in broad index funds - personally am fully invested in a Schwab Target date fund currently - and use the power of compounding interest. This is very basic financial advice but def necessary.
Doesn’t need to be anything flashier than that - it’s worked for decades! Thanks for watching 👍🏻🙏🏻
I stand to be corrected, but I believe that the reason behind Lars Kroijer's recommendation to buy UK denominated bonds which was discussed (or bonds in your local currency unless the bonds might be volatile or risky in some countries around the world), was to eliminate currency risk and their associated movements from the bond equation and thereby have minimal risk and volatility for the bond side of a portfolio.
Yep, that's right
Great interview, your home is definitely not an investment, rental property as an investment is great, from a cashflow & tax efficiency also normally keep up with inflation (always if 20 years)
WHOA! 😳@27:35 JL MENTIONS ABOUT as we speak the mark could be crashing. Crazy to think that March 2020 2 months from the day of this video happened!
Question- I have my money in a company plan. I cant put money in Vanguard from this plan. Should I open a second investment so that I can put money into an Index fund or should I put as much money as possible into my retirement? Will my company still match contributions if it is not in there plan? I am new and have no clue. Thank you.
Thanks, great interview. How would you advise someone thinking about savings rate when they already have a NHS pension? JL Collins recommends saving 50% of income which I gather gives a rough FI target of 17years. If you're contributing 14.5% pay into a pension with employer contribution (?eg. 20%) on top...roughly what % of remaining income should be saved into an index fund to emulate his recommendation? I appreciate this sort of question comes down to individual circumstances and goals. We're saving about 25% of net income at the moment. Thanks again.
Always remember that savings rate is a goal, not an absolute necessity. Some people include their employers' contributions in their savings rate - I generally don't. Also remember that DB benefits are completely unrelated to how much you put in. If I were you, I'd just decide what you want to save total and then take the 14.5% off and go from there. What matters is what you'll get out at the end, which is of course unknown as far as DC benefits are concerned, but known for DB benefits. Check out the Planning With Purpose season on MeaningfulMoney
A friend sent me a link to this book and it's wonderful. However, I am struggling with figuring out what is the UK equivalent of VTSAX? Ans VBTLX?
Well, VTSAX is the S&P500 tracker that Jim likes so much. Nearest equivalent here is probably VUSA: www.vanguardinvestor.co.uk/what-we-offer/etf-products
VBTLX is a bond fund. There’s no direct equivalent allowing UK investors to invest in a broad US bond index.
FWIW, I think that UK investors should follow JL Collins’ general suggestion but track global markets instead of just US markets.
Global stock fund is called VWRL and global bond fund is called VAGP. Just Google them.
None of those are a recommendation, mind - other tracker providers are available!
@@MeaningfulMoney thank you.
Legend!
New to stocks. How much do I need to buy a vtsax ? What is dollar averaging?
I suggest you read the book. Do NOT begin investing without understanding what you're getting yourself into. Buy beware, always
Grassology4610 Whatever the min is. Dollar cost averaging is just buying that fund/stock of whatever regardless of price. But most important is keep buying like every month. So you get the current price plus you get low prices that average out. For example you bought one share of something for $100, The following the you buy the same thing for $80 that you have dollar cost average to 90
Start small and buy fractions of shares- the ETF version
Minimum when I bought into VTSAX was 3k. Allegedly the best dollar cost averaging strategy is weekly on Monday. That's what I do.
I’ve listened to this three times now and it’s left me confused about one major point both guys seemed to agree on. When talking about investing in Vanguard’s US only find, why does it make a difference if you’re not based in the US? Is it as simple as it’s less profitable because of exchange rates? Or are there other limiting factors?
Good question, Jack. Basically you’re correct - if you invest in a UK Sterling denominated version of that fund you are factoring in exchange rate conversion and this is an added risk. Investing only in the S&P500 makes more sense for Americans that for others I think. Personally I’d invest globally every time
@@MeaningfulMoney thanks Pete! I’ve listened to many many hours of your content after discovering your channel a few weeks ago. Implementing lots of changes! Thanks so much for all the useful info. Jack
Jack, I think what JR was trying to say that his preferred investment of a US Total Market Index Fund may not be as appropriate for other investors around the world than he believes it is for Americans. It's not that he's saying it would be inappropriate, he just doesn't know. As a Canadian I actually have the majority of my self-managed investments in stocks & ETFs denominated in US dollars. For me its just another form of diversification but it does increase currency-related risks. I just like not having all my assets denominated in Canadian dollars.
Is Fskax a good alternative to vtsax?
I can’t make fund recommendations here, Walter. But I imagine a fund like that would do a similar job to VTSAX - not sure if you’re US or UK based - that will be a factor in which funds you might look at
I believe the world fund from Vanguard that JL Collins is referring to is VTWAX. Can you please confirm this?
Yes, but that's a US-domiciled fund and is $-denominated. Not ideal for UK investors. The nearest UK equivalent is The Vanguard FTSE Global All Cap Index Fund
What is the vanguard global fund Jim is talking about for his daughter?
It’s a US- domiciled fund and invests purely in the S&P500 index, which I’d never do personally. Many UK FIRE followers opt for the Vanguard FTSE Global All-Cap Index fund - code is VWRL
@@MeaningfulMoney I wasn't able to invest in VWRL in my brokerage so that's out for me. But I did find Jim mentioning VTWAX in part-xxxv of the stock series as a world fund for the future. It's still heavily weighted to the US market though. jlcollinsnh.com/2019/03/03/stocks-part-xxxv-investing-for-seven-generations/
@@MeaningfulMoney VWRL is an ETF, the ftse all world. Globally all cap is slightly different
@@aaron___6014 try M1 finance- they carry ALL the vanguard ETF’s
I added 20% of the international stocks to VTSAX.
You mean your portfolio is now 20% vanguard total international index and 80% vtsax?
70% VTSAX, VTIAX 20%, VBTLX 10%
@@yugarithen4342 nice
33:48
JLC from 3 minutes approx
I'm sorry but Mr Collins advice is dangerous. Assuming "The Market (which one?) always comes back" is no form of risk management.
That’s only part of his advice, and mine. Risk is a function of time also, so if you have the time to allow markets to come back then so be it, but if not, then the volatility needs to be mitigated.
@@MeaningfulMoney a particular stock market doesn't get less risky with time.
The simple path to wealth. Be born into a wealthly family. Tada trust fund baby!!!
That's the lazy path and likely easily lost wealth to boot.
@@yasuewho480 Correct. 90% of trust funds do not last 2 generations. So maybe a great life for the self-absorbed person, but history bears out that not thinking of your grandkids is selfish.
That’s the path to running out of money. Don’t be a victim nor make excuses. Wealth building is the way of the tortoise
@@aeksinsang932 My thoughts exactly