I happened to see an article today, as a matter of fact, about the Harvard endowment. It’s possible that your timing could be bad, and the next day you wake up and the market’s down 30%. Steve: For our users who are listeners who don’t know this, so VTSAX is a index fund by Vanguard that covers the whole US stock market at a very low cost basis. That’s how I chose my apartment and everything else in my life. By defense, I did eventually see it. So, some of those companies that are on the index will go out of business. It was very, very slow to catch on because it’s so counterintuitive. We believe that you have all the tools to improve your finances because you and your family deserve it. I know you mentioned Mr. Money Mustache but anyone else? She’s not interested in this. Jim Collins has literally done it all. You’re actually writing a check to someone. It was huge.d it wasn’t necessarily that it was huge, but now the more active oriented firms are feeling this, so you’re starting to see passive index is really growing and active fund managers and families are losing assets, so they’re feeling it. Well, I think one of the big lessons from you that I have from 2016, which took me the four years to kind of get to was, there’s never … Timing the market is not a winning proposition. Steve: Yeah. Money managers are expensive always, and it’s very rare to find a good one. In my world, my savings rate is big enough that I have the capital to make those Roth conversions when the opportunity permits. I just knew I wanted to have enough money that it provided … to me, it represented freedom. On today's show, I chat with JL Collins about index fund investing, personal finance principles, and the road to financial independence. What’s interesting is customers are best served by those hourly fees, which are much more upfront and tend to be more modest over time, because they don’t compound over time, but they’re much less comfortable with them because those fees are much more obvious. Most recently, in the spring with COVID, I had people on my blog commenting that this time is different than in March when the market had taken a 30, almost a 35% plunge, and they’re like, “This time is different. Here is the first of the 7, with the other 6 further below […] This episode was recorded live from Kibanda. Steve: Interesting. JL: In some small fashion, I guess that’s beginning, and nobody’s more surprised than I. Steve: Well, I do want to give you credit also. Well, if you’re paying 1% of your holdings to a manager, that’s 25% of your potential income that has to pay that manager. I said, all right, this is how I’m going to invest. My response to that is, you’re just like my daughter. The other way to look at that 1%, so we talked about the 4% rule, which means you can comfortably pull 4% of your holdings each year to live on. Again, remember, I had no concept of retiring early or even financial independence as a goal. Although Suze opposes the overall idea of FIRE, she advocates for many similar personal finance concepts and principles. It’s kind of hard to see that it’s going to be one to even decide it’s 2% for that. Steve: No, exactly. The spring of 2016. Podcast: JL Collins — The Simple Path to Wealth October 15, 2020 by Steve Chen Episode 48 of the NewRetirement podcast is an interview with JL Collins —a best-selling author and financial independence guru — and discusses the what, why, and how of Financial Independence as well as Collins’ book, “ The Simple Path to Wealth ”. JL: This is an interesting subject, and if you’ll indulge me, I’ll talk about it a little bit. I always liked working. Some debt is necessary debt, but if you look at getting a mortgage for a house, and people say, well, that’s good debt. The Power of Index Investing is one of life's greatest secrets & JL Collins is the ultimate travel guide. Someone who had the education and training… [Continue Reading] JL: We had conversations over the years and it probably took me 10, 15 years before I really finally looked at it with an open mind. JL: I can imagine that for somebody who’s hearing this for the first time, and they’re say 35, and they’ve been out in the workforce for 10, 15 years, and has built up a certain kind of lifestyle, it can be hard to back away from that, and that’s tough, but that’s the choice you’re going to have to make in that situation. JL Collins author of The Simple Path To Wealth takes over the podcast and interviews Doc G about his views on COVID-19. I don’t happen to fall into that camp. Guest on BiggerPockets Money Podcast, The Meaningful Money Persona…, ChooseFI, and Financial Independence Podcast. At the very least, solo investors should call the support line for their online brokerage.. right? Money is the single most powerful tool humans have created, and we live in a very complex modern society, and it’s the tool most effective in navigating that society. There is so much nonsense swirling around COVID-19, right down to the correct name, I was starting to get lost sorting it out. Roth and JL Collins, so I started calling these guys. All tagged JL Collins. DR Podcast 276: JL Collins’ Tips for Achieving Financial Independence Advertiser Disclosure This article/post contains references to products or … The more interesting question is, will they? or. It did really resonate with me and it’s something I pursued and achieved, which freed me up to think more broadly about how I spend my time. How to Retire Happy, Wild and Free | Ernie Zelinski. Then regarding volatility, that’s one of the most important points to remember, is the way people lose money in the stock market is, when it takes one of its periodic drops, and it does on a regular basis, they panic and they sell, and then they lick their wounds and they’ve lost money, and they say, man, I’m never doing that again. I was, in getting ready for this, I was clawing through your blog you know, jlCollinsnh.com, and you’ve obviously had a long career. JL: It’s amazing how many communists countries are embracing my book. Nobody did. JL: Well, so first of all, with the caveat that this is just my opinion and other people define it differently, so this is not the definitive definition, but I think of financial independence is that point where you have enough money that you don’t have to trade your time or your labor for money. What mattered (to him and now us) was his driving ambition to have F-you Money. Of course I bought two individual stocks because, and in 1975, I didn’t know about Jack Bogle or Vanguard or index funds, but around 1985 my buddy Albert talked to me about them and made the case for them, and I was just too bullheaded and stubborn and set in my ways to appreciate the wisdom of what he was sharing with me. We’ll dive into that more, but I will say that finally, after four years I do own VTSAX, though it took me four years to take your guidance and run with it. What You'll Get Out Of Today's Show. I don’t know if you have an opinion on that. If they happen to stumble into the hands of somebody who’s competent and honest, they’ve just gotten an extraordinary blessing in their life. Anything, so the Simple Path to Wealth, and we’ll link to it from the post on this, but anything you want to call out from the book that you think are especially important lessons for folks? Last time I looked, that was about 3,600 companies. Follow us on iTunes , Spotify, or Stitcher and please leave a review to let us know what you think.. Also, listen to the very end for a short but satisfying blooper reel! You talked about real estate at one point, but I think you got out of it, right? Steve: Wow, that’s amazing. JL: Yeah. When I finally adopted indexing, and I’d actually learned about it in the middle of ’80. I forgot the second part of your question at this point. I saw you joined Twitter. So, that’s always the number one priority in my spending of my money, but I recognize, as we talked earlier, very few people have that priority. Sign Up. I’d rather spend the money.” My response is, we are spending money. You’re just buying your freedom. It’s amazingly difficult to outperform the market. Jim was last on my podcast … JL Collins argues that dedicated exposure to ex-US stocks is unnecessary because U.S. companies do business overseas. It’s on the shores of Lake Michigan and turned out to be handy to have in this age of COVID to hide out in what otherwise nomadic and roaming around the world, but COVID has shut that down for the last few months. I don’t see that as being secure income. In some cases, the answer might be yes, in some cases, the answer might be no. How many copies of the books have sold so far? JL: Yeah. Hence, I wanted to create a simple path that was simple to understand, simple to implement that you could put on autopilot. JL: Yeah. Well, yeah, good luck with that, and that’s why people wind up getting divorced, so be a little more clear-eyed in that decision would be my advice. You can be sure those stories will appear at the moment they’re available. Steve: Nice. On today's episode, Brad and Jonathan recap the Live Event with our friend JL Collins, where he answered a whole slew of questions from the community. Even as companies that are failing or maybe just gotten to the end of their life cycle, and they’re drifting down, I’m thinking now of a company like Sears, as an example. It started out innocently enough...he wanted to write letters of financial advice to his daughter. JL is an accomplished consultant, speaker, and bestselling author of “The Simple Path to Wealth”. Steve: Yeah. JL Collins is one of the undisputed heavy weights of the personal finance industry. If someone’s managing a fund and there’s guys managing it and it manages 100 million, it takes three guys. JL: Yeah, we actually … I have an agent now who’s done some international deals. JL: I certainly didn’t know what the market was going to do, but I also knew these people didn’t know what the market was going to do either. Steve: Yeah. In this session of Financial Independence Podcast, I had the pleasure of speaking with Jim Collins from jlcollinsnh.com.. Jim accumulated enough money to retire over 20 years ago but rather than pack it in and call it quits, he instead used his “F-You” money to work on his terms. Maybe we got that sense of each other as we were dating without the conversation. The downside is they can rise 200%, or 2000%. Now, yes, I recognize that interest rates are really low these days, and that makes it all the more tempting and maybe makes it more reasonable. JL: I wouldn’t even hazard a guess. There is a lot of rationalization going on, but there’s like a famous financial advisor. Then, I think that’s actually published A Simple Path to Wealth that year. I think of cash and bonds as sort of being the same thing fundamentally in terms of my allocations. Someone who had the education and training… [Continue Reading] Filed Under: Life. He condensed and summarised his entire blog into the book ‘The Simple Path to Wealth’ with a forward by Mr Money Mustache. From the moment I got out of college, I knew I wanted to have what I’d come to learn was called F-you money. Apr 26. So, most people insured are goofs with their money. The other thing to keep in mind is that once you’re invested in the market, you’re always subject to that big drop that you’re just going to have to live through. I don’t think it’s quite at 750 yet, but it’s coming up on that. They’ll probably actually drop off the index before that happens, because if they get too small, then they fall off the index, but they can have a pretty sharp drop. Steve: Little did I know how famous you’re going to get to, and then I saw, also in 2018, you had I think the most popular Google talk or outside of … there was some filter for it, but like 750,000 views, is that right for your Google Talk that you did? But another reason that a fund like VTSAX total stock market index fund keeps going up is that it’s self cleansing. I’m expecting at some point the blog revenue will begin to drift away. We've pulled out the key parts into 7 clips. Of course, it can be any combination of those three too. Right. Then the third option is where they charge by the hour. If you have $1 million, 4% of that is $40,000. Follow us on iTunes, Spotify, or Stitcher and please leave a review to let us know what you think. JL: Wow, I didn’t know that. Kristy and Bryce from Millennial Revolution do a great job. JL is an accomplished consultant, speaker, and bestselling author of “The Simple Path to Wealth”. JL: I would only suggest that you consider the possibility that one of the things you can buy with your money is your freedom. Steve: Yeah. The Dante Stevie J Collins Show. But by definition, enhancing your lifestyle is counterproductive to becoming financially independent. It sounds like … yeah, I’d love to hear your take on this. About JL Collins. Steve: Right. Today, we’re going to be talking with JL Collins, a bestselling author and financial independence guru about the what, why and how of financial independence, and his book, The Simple Path to Wealth. JL: Yeah, it’s an interesting question because sometime in the mid-’80s, I had a friend of mine who was a financial analyst, and he was the one who first brought passive investing, which is to say index funds to my attention, and Vanguard and Jack Bogle. By the time she and her husband started investing, they had paid off all their debt and saved up a lot of cash. JL: Yeah. JL: Yeah. I’ll see, I actually have to talk to him about it, get the exact details. IN THIS EPISODE, YOU’LL LEARN: Why you might want I’ve had financial advisors say to me, “I’m only doing what my customer is most comfortable with,” and there’s some truth to that. Mr. Money Mustache is great. That’s him above. This is a pandemic. Yeah, I hear you. 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