The Simple Path To Wealth By JL Collins | Commuter Experience Book Reviews

The Simple Path To Wealth By JL Collins | Commuter Experience Book Reviews Thanks for watching my video! See Ver and his fiancee featured on CNBC Make It! /watch/Yk4a4W5LLKhLa Find me on Instagram! @verstarr Director: Jenelle Yee @j.n.yee Book was a gift from Jenelle's sister, Michelle Yee!! @michellemark88 I’m starting a segment called Commuter Experience Book Reviews where I review the books I read on my daily commute. One of my goals if you recall from my goal setting video is to read 1 book a month this year. I just finished my first book for the month of January which happens to be something I’ve read before, but it was SO informative I had to reread it. The title of this book is The Simple Path to Wealth Your Road Map To Financial Independence And A Rich, Free Life by JL Collins. The reason I read this book again is because I wanted to go back to the beginning of when I started taking learning about personal finance more seriously. Note, this is not financial advice and I encourage you to do your own research about building wealth. Real quick summary. Collins wrote this book from the perspective of telling his daughter who just graduated college how she should start building her wealth. At the time that this book was written, she was still fairly young in her early twenties and had time on her side to build wealth. Collins starts by explaining his personal story around wealth, retirement and the hard lessons he learned along the way. The first few chapters include an orientation section about debt and “F-You Money”. Then goes into the simple path to wealth, the “losers’ game”, and what to do when you get there. ie retirement. The first two takeaways I want to note are debt and “F-You Money”. Debt is a double edged sword that can make or break people. The universal understanding about debt is that it is bad. Bad debt includes consumer debt from credit cards, ridiculously high student loans, car loans, and in some cases, a mortgage. The strategies Collins suggests are to first, get rid of high interest debt as quickly as possible. If the debt carries an interest rate higher than 5%, pay that off ASAP. 4-5% is at your discretion but should not be ignored, and anything less than 4% is deemed okay. Pay your debts off but if you can make money elsewhere at a higher rate, it’s absolutely advantageous to do so. The simple path to wealth involves this simple phrase, “broad index funds” Index funds, not to be confused with actively managed funds, are market trackers such as the S&P 500 or a blend of stocks that define an index. I believe there are more index and mutual funds than actual U.S. stocks. Vanguard, one of many major investment companies out there, provides some of the BEST index funds to choose from. The most prominent is VTSAX which is an index fund that tracks ALL U.S. stocks with a low expense ratio. If you own VTSAX admiral shares, you own a piece of EVERY U.S. based publicly traded company. If you look at a similar index like the Dow Jones, HISTORICALLY the index has ALWAYS gone up. Despite the Great Depression in the 1930s, the .Com boom, the Great Recession more recently and any other drops that have occurred in history, the market has always gone up. There are many examples in this book that discuss this principle of growth. One key part of an index I appreciate is they ‘self-cleanse’ or generally speaking, if a stock doesn’t perform or fails, the fund removes them and then adds better performing ones. On top of that, any dividend stocks in the index pay out to your account the same way if you were to own individual dividend stocks. Simply put, you own shares of one fund and this keeps it simple and VERY easy to manage YOURSELF. This keeps out phony insurance agents passing as financial advisors or financial managers who charge A LOT of money to implement investment options that aren’t always in your best interest. Investing is not for everyone, BUT I also believe everyone should have some sense of financial literacy, at least starting with the basics. You can save all your money and put it under your mattress, but you deal with demons like inflation. An example of inflation is I’m sad I can only buy one apple pie instead of two for $1 at McDonalds now… If you don’t currently have the funds to comfortably begin investing, start paying off your highest interest rate debts first, and save responsibly for a cushion towards your future investing endeavors. Reference links: VTSAX: https://jlcollinsnh.com/2011/06/14/what-we-own-and-why-we-own-it/ The Simple Path to Wealth https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926 Earn a free stock and free trade commissions http://join.robinhood.com/verands1 Open an account and receive a FREE stock valued from $2.50-$250 Deposit ANY amount and receive a SECOND FREE stock valued from $12-$1400 https://act.webull.com/promotion/invitation/share.html?inviteCode=jFoCPTXQkPpJ

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