I read The Simple Path to Wealth: Your road map to financial independence and a rich, free life by J.L. Collins during my travels this morning. Are you impressed that I started a finance book at five in the morning? (I am impressed with myself, after all, it’s so much easier to just watch tv.)
I’d heard this book mentioned a couple of times, most recently during a webinar I listed to during Bravely’s Financial Feminist Summit. The webinar was titled “Financial Independence as a Single Woman” by A Purple Life.
I like to think I know a passable amount about my money and finances . . . not enough that I’d ever read the finance section of a newspaper or to get lost in the complexities of the economy . . . but I pay attention to my money, have investment accounts, and think about long term savings and plans. Especially as a single human who’s planning to have kids.
I do recommend this book. A lot of it was validating from what I know and what my money-savvy parents have already instilled. Some of it was a needed refresher — I swear I need to hear basic definitions of bond, Roth, etc a hundred times before they sink in. Some of it made me consider how I can do things differently going forward.
But above all it was SIMPLE. “Spend less than you earn, invest the surplus, avoid debt.” It’s not rocket science. When it comes to investing, the data shows that a “set it and forget it” strategy yields better returns than anything when it comes to investing in index funds (and you should invest in index funds). The long game is what matters and you have to ride out the dips because over time the market always goes up. The author recommends investing in Vanguard’s Total Stock Market Index Fund (he’s a big proponent of Vanguard overall, and explains why, which is great because I use them too).
Trying to predict the market, investing in mutual funds, using financial advisors . . . all can have significant downfalls. On financial advisors, at one point the author writes that you can either spend the time researching a good financial advisor or researching how to do it yourself. It’s basically the same investment and the latter will earn you a lot more money.
Anyway, I was super interested despite it being my casual travel read, and I recommend it to anyone who’s looking to understand more about their finances or is curious about what it means to be financially independent.
With Love,
Natalie