Monday, 27 February 2017

The Simple Path to Wealth (JL Collins)

Collins runs the website at which publishes his opinions on investing. The book grew out of a series of letters he wrote to his daughter about money and investing.

The book is about simplified money management. Collins covers debt management, amassing F-You Money, his very limited suggestion of investments, tactical considerations such as withdrawals, etc. There are also sections specific to the US audience on retirement schemes which non-residents can skip. In a summary, he recommends the Vanguard funds for their low cost, specifically VTSAX, VBTLX, and cash. He also discusses the proportion and if it is useful, as well as international funds.

Some of the novel ideas in this book which stuck in my mind, are: fitting one's psychology to investing, which means being able to absorb losses psychologically, withdrawal rate discussions to live comfortably, and his unorthodox view on dollar-cost averaging not being useful. Although he is focused on promoting Vanguard funds and explains why, he has a disclaimer that he is not on their pay. Although the author does mention his own personal investing journey, I wish more had been shared and also more covered on the topic of psychology. I find his section on explaining bonds to be particularly clear and succinct among books I have read.

Numbers are also brandied about in the book, but overall an easy read. The book is similar to Andrew Hallam's Millionaire Teacher book but Collins'philosophy more simplified conceptually (even though Hallam's is also quite simplified). However, much of this book is not new content as many books out there have similar topics but this book is good for those who want a super simplified plan to follow, hence I have recommended it. For local readers, you still need to be able to invest in his recommended funds with the right brokers.

Recommended: Yes

Found in NLB: Yes