Book Review: The Simple Path to Wealth by JL Collins

Reading The Simple Path to Wealth was part of my 2020 personal finance goals.  Here’s The Simple Path to Wealth book review as evidence of me doing my personal finance goals homework.  Here’s evidence of me enjoying my homework with a glass of rosé.

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The Simple Path to Wealth is a book by JL Collins who also has a website called JL Collins: The Simple Path to Wealth.  He started a personal finance blog before he started his book.  I had heard of this book talked about within the FIRE social media, but to be honest I had never checked out his website until now.

Who is JL Collins?

Who is JL Collins?  JL Collins known for his Stock Series on the blog.

He seems to be a Jack of all trades type of guy and has been a bus boy, landscaper, account executive, entrepreneur, consultant, sales trainer, and even a radio talk show host.  He even stopped working for a few years when his daughter was born (from what I read he was let go from his job but he had enough F-You money to be financially independent).

JL Collins wrote his book The Simple Path to Wealth for his daughter (it started off as a series of letters to his daughter about money and investing) and then it turned into a blog in 2011 and then it turned into this book that was published in 2016.

I think that’s a great idea as a money lesson for your children.  They may not want to listen to you when they are older but will appreciate your letters and words of wisdom when they are ready to read them.

What I Liked About THe Simple Path to Wealth

It was a very entertaining read, kind of like you were sitting down for a cup of coffee with JL Collins.  He’s funny and self-deprecating in the book.  He makes financial literacy easy and makes it very easy to understand the concepts.

He shares his own life examples and shares that you don’t need a six figure income and you don’t need to be a software engineer to be financially independent in your 30’s or 40’s.  He gives a very simple recipe for financial independence retire early but he isn’t snarky or condescending or arrogant about it.

He talks about having F-You money and how important it is.  I also like how he keeps investing towards financial independence simple with just VBTLX and VTSAX and how he tells readers to keep it simple.  The Canadian equivalent of keeping it simple would be to accumulate VGRO to your portfolio or another one ticket VEQT.

JL Collins has a very honest way of approaching the book and his recommendations did not feel slimy and did not seem biased as he disclosed that he had no personal gain from recommending Vanguard.

He also seems like a very likeable guy and has an enviable list of places that he’s been to, including Tahiti.  Sigh, one day for me!!

I also liked the back section “Praise for The Simple Path to Wealth” and saw some familiar personal finance blogging names including Fiery Millennials, Go Curry Cracker, and Femme Frugality.  He even has a foreward written by the ultimate FIRE blogger, Mr. Money Mustache Pete Adeney himself.

What I Didn’t Like About The Simple Path to Wealth

There wasn’t much that I didn’t like about The Simple Path to Wealth.  Being Canadian, some of the terms were a bit confusing and some of the US only topics were irrelevant for me.  Topics such as RMDs, and HSAs (health spending accounts) for medical bills were interesting but didn’t apply to me.

The only minor thing that bugged me was that he talks about saving 50% of your income as something that is very reasonable and easy to do.  Blanket statements like that can be a bit misleading.  If you are making $45,000 a year and living in a HCOL city, it’s going to be very difficult to save 50% of your income (unless you find very cheap rent).  Base expenses like shelter, food, and transportation are taken off the top.

In addition, I still contend that withdrawing from my portfolio at a 4% withdrawal rate per year isn’t enough (in a HCOL place like Vancouver at least) and having 25 times your living expenses is not enough to retire on, but this is my own discomfort and he shows the math proves otherwise.

Genymoney.ca’s Verdict

If you like reading personal finance blogs, this book is like reading a book version of a personal finance blog.  It was very personable and humorous and a great and easy read.  I think I finished it within a few days.

If you are into FIRE I would say this is, in addition to Your Money or Your Life by Vicki Robin, a must read.  If you are newly graduated or in college, I would say this would be a great read too, getting a head start and putting in the 10-15 years of working time (and accumulating your savings and throwing them in investments), can likely give you a financially independent life in your 30’s and 40’s.

Yup, I liked this book.  It was interesting to follow JL Collins on Twitter after reading his book and seeing that he swapped $100,000 of VBTLX into VTSAX during the great sell off at the end of February.

If you’re not into index investing and would rather invest with dividends, here are 5 dividend investing books for you.

Hope you enjoyed The Simple Path to Wealth book review.

Have you read The Simple Path to Wealth?

What did you think of it?

genymoney

GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.