J.L. Collins’ ‘The Simple Path to Wealth’ outlines a straightforward, three-step approach to financial freedom: spend less than you earn, avoid debt, and invest in index funds. Originally written as letters to his daughter, it emphasizes financial independence.
Main Lessons
- Financial freedom is the true wealth; it’s not about luxury or power.
- Spending less than you earn is crucial to avoid becoming a ‘gilded slave.’
- High savings rates provide flexibility and investment opportunities.
- Debt is comparable to harmful leeches; escaping it quickly is vital.
- Even ‘good debt’ like student loans can be burdensome long-term.
- Living modestly in an affordable home can prevent financial stress.
- Investing in index funds consistently grows wealth over time.
- Market crashes test resolve; staying invested is key to success.
- A portfolio goal, like a NASDAQ 25x your expenses, ensures safety.
- The ‘four percent rule’ supports sustainable withdrawals in retirement.
- Enjoy freedom by maintaining a simple, debt-free financial path.
