The Simple Path to Wealth (Revised & Expanded 2025 Edition): Your Road Map to Financial Independence and a Rich, Free Life

Praise for The Simple Path to Wealth

In the dark, bewildering, trap-infested jungle of misinformation and opaque riddles that is the world of investment, JL Collins is the fatherly wizard on the side of the path, offering a simple map, warm words of encouragement, and the tools to forge your way through with confidence. You’ll never find a wiser advisor with a bigger heart.

—Malachi Rempen, filmmaker, cartoonist, author, and self-described ruffian

"It’s rare to find a book that truly changes your life, but JL Collins’s commonsense explanations allowed me to see clearly what was previously so muddled. All the stress and indecision I previously felt with investing has melted away, and for the first time, I feel 100% confident in my strategy. I am forever in his debt and have become an evangelist for his approach.

If you’re serious about your financial life, you need to read this book!

—Brad Barrett, CPA, founder and host of the Choose FI podcast

"The Simple Path to Wealth provides a refreshingly unique and approachable take on investing. It’s not only about reaching financial freedom; it’s about building a better life. It’s not about finding the next hot thing. It’s about sticking to the small number of time-tested principles that actually work and anyone can implement. If you’re looking for a way to use your money purposefully and intelligently to create a life you enjoy, this is it."

—Matt Becker, founder, Mom and Dad Money

This is the START HERE book I recommend to everyone interested in investing. An amazing overview of everything you need to know, this is easily the best foundational investing book available. If you’re thinking of investing, this book will radically increase your confidence. If you’re already an investor, this book will help you optimize your investing strategy to get better results. These simple principles are astoundingly effective. I followed his guidance and went from zero to a six-figure investment portfolio in less than five years.

—Hahna Kane Latonick, bestselling author, Master Your Money: Stop Yearning, Start Earning

JL Collins is the consummate expert on sane, rational investing methodology, and he has a knack for explaining the underpinnings of the stock market in a straightforward, approachable manner. Collins’s writing is thorough, informative, and best of all—effective. Most importantly, he’s one of the rare financial experts who isn’t trying to sell you something or rip you off.

—Mrs. Frugalwoods

"Hey, millennials, listen up. The Simple Path to Wealth is an essential addition to your financial library. Sure, you could probably figure this out on your own, but why reinvent the wheel? It’s everything you should’ve been taught about investing and finances in high school. With funny personal anecdotes and a ton of valuable lessons, you can’t afford to not buy this book!"

—Gwen, founder, Fiery Millennials

JL Collins’s blog is where I send those wanting to learn about effective investing. Now, in this book, he has managed to take all the confusing investing knowledge of our age and condense and clarify it into something anyone can understand. Despite the simplicity of the message, the outcome is powerful: the most effective investing strategy one can implement, whether beginner or expert!

—Joe Olson, Adventuring Along; chief moderator, Mr. Money Mustache

"Investing doesn’t have to be difficult. In fact, it’s much better when it’s not, and the people who try to make it complicated are often the ones hoping to move your money into their pockets. The Simple Path to Wealth contains everything you need to know to become a successful investor, so read it and ignore all the other nonsense, and one day you’ll have more money than you know what to do with!"

—The Mad Fientist

"Personally, I don’t follow the strategy laid out in Collins’s book. But then, I have spent years of work and study developing and managing my own. For those who don’t want to do this, I’d recommend this book. If your goal is financial independence, you’re going to need strategies that are optimal for your skills, talents, and temperament. Those in The Simple Path to Wealth will serve you well."

—Jacob Lund Fisker, Early Retirement Extreme

JL takes a topic that is often complex and sometimes intimidating and shares it in a way that anybody can understand. Finally, there is a book I can recommend that explains how to become wealthy in a way that is both easy to understand and easy to implement.

—Jeremy Jacobson, Go Curry Cracker

"Whenever I think about writing anything on investing, I recall JL Collins’s insight and logical advice in The Simple Path to Wealth, marvel at its brilliance, then dramatically pluck a piece of paper from my typewriter, crumble it in resignation, and go learn another recipe from my mom. I cannot improve upon the best."

—Anita Dhake, The Power of Thrift

"JL Collins has the gift of making boring financial concepts funny and interesting. He makes complicated subjects simple and easy to understand. The Simple Path to Wealth is the first book I recommend to people curious about financial independence."

—Mike Moyer, Mike and Lauren TV (YouTube)

There are loads of books on investing. This is the one to get. It is smart, thorough, and accurate—and sometimes even funny. It is no understatement to say that his principles changed the way I invest and made me wealthier in the process.

—Mr. 1500 Days

"The Simple Path to Wealth is really about choosing a lifestyle—one that embraces a simple three-step philosophy that will change the way you view life and how you live it: spend less than you earn, invest wisely, and avoid debt. The book includes simple parables that untangle unnecessary complexity and show how the power of compound interest can provide you with the wealth of freedom. The writing is straightforward and colloquial, and powerful points are highlighted in a way that is easy to grasp. Reading this book can be a wise investment in your future, as well as a clear reminder of what is really important in life."

—T. Mullen, Roundwood Press

"Based on JL Collins’s excellent blog Stock Series, this book deserves to become a ‘go-to’ resource for investors. He cuts through all the spin, complexity, and jargon of Wall Street and makes investing simple enough for anyone to manage their own portfolio. Crucially, JL Collins covers the mental and emotional aspects of investing as well as the technical aspects, which is rare among investment writers."

—The Escape Artist

"JL enjoys a financially independent lifestyle while sharing money and life lessons through his blog. His Stock Series introduced passive index investing to a wide audience. Now you can get the same wisdom, distilled in book form. JL tells you how to avoid common investing fears, misperceptions, and mistakes. He teaches about diversification, asset classes, asset allocation, and the best way to use retirement plans. This is a simple, proven path to investment success from a guy who actually did it. If you’re new to investing, don’t miss this crash course in the essentials!"

—Darrow Kirkpatrick, Can I Retire Yet?

As small business owners, our biggest fear is always about how we plan for retirement. Collins removes the mystery and nonsense surrounding investing. We feel much more confident about how we invest our money. We love our business, but love even more that work is becoming a choice, not a requirement.

—Jay Dedman and Ryanne Hodson, Scavenger Life

I came of age in the midst of the Great Recession. Like many of my peers, I developed an unhealthy fear of the market. By the time I finally realized investing was one of the best ways to build wealth while beating inflation, I had no idea how to do it. Then I started reading JL Collins. This book makes one of the most overwhelming financial tasks not just simple but exciting. While time has taught us that the market doesn’t always go up in a perpetually straight line, Collins has taught us how to invest so the ups and downs don’t hurt so badly. And he’s taught us how to do it without getting a headache.

—Brynne Conroy, Femme Frugality

A brilliant collection of practical, personal finance advice that produces extraordinary results for your financial happiness. JL Collins has a knack for fact-driven investment ideas that you can learn from to strengthen your financial muscle. A masterful must-read for anyone who expects financial peace.

—Shilpan, Street Smart Finance

This book should be required reading for any new investor! In it, you’ll find comprehensive investing information, along with some neat tips and interesting twists to help make the most of your money. The JL Collins commonsense approach to building wealth makes it easy for anyone to be successful.

—Mindy Jensen, Bigger Pockets

The Simple Path to Wealth

Also by JL Collins

How I Lost Money in Real Estate Before It Was Fashionable: A Cautionary Tale

Pathfinders: Extraordinary Stories of People like You on the Quest for Financial Independence—and How to Join Them

The Simple Path to Wealth

Your Road Map to Financial Independence and a Rich, Free Life

JL Collins

First Draft, an imprint of Authors Equity

1123 Broadway, Suite 1008

New York, New York 10010

Copyright © 2025 by JL Collins

All rights reserved.

Cover Design by Carol Chu

Cover Illustration by Trisha Ray

Interior adapted from Mary Jaracz’s design of original edition

No part of this publication may be reproduced, distributed, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording or any other—except for brief quotations in printed reviews, without prior written permission of the author.

Most Authors Equity books are available at a discount when purchased in quantity for sales promotions or corporate use. Special editions, which include personalized covers, excerpts, and corporate imprints, can be created when purchased in large quantities. For more information, please email [email protected].

First published in 2016.

Revised and expanded edition published in 2025 by Authors Equity.

Library of Congress Control Number: 2025930312

Print ISBN 9798893310474

Ebook ISBN 9798893310856

Version 250718

www.thesimplepathtowealth.com

www.authorsequity.com

This book is dedicated to my daughter Jessica, for whom it is written and who inspired me to write it. And to my readers, whose questions and comments over the years helped me more fully understand what those aspiring to financial independence want and need to know.

Start Here

The ideas, concepts, and everything else in this book are my opinions based on what has worked for me and what has kicked me in the ass. The approach may not continue to work for me, and it may not work for you.

While I hope the book answers some of your questions and provides valuable guidance, I cannot possibly know the full details of any reader’s personal situation or needs. At some points in this book, I’ve cited various laws and regulations and used specific numbers for things like the expense ratios of mutual funds, tax brackets, limits on contributions to investment accounts, and the like. While to the best of my knowledge, these were all accurate at the time of updating this edition of the book, they may well have changed by the time you read it. As they are used primarily to illustrate the broader concepts I am presenting, this shouldn’t matter much. However, if you find for your situation or even just for your own curiosity it does, by all means, take the time to look up the most current rules and numbers for yourself.

While both my publisher and I have made our best efforts here, we make no representations as to the accuracy, completeness, currentness, suitability, or validity of any information in this book and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

You are solely responsible for your own choices. There are absolutely no guarantees here.

Contents

Foreword

A Parable: The Monk and the Minister

Beginnings

How We Got Here

My Story: It Has Never Been About Retirement

Things Change; the Principles Remain

Important Note on Projections

Part I: Orientation

1 Debt: The Unacceptable Burden

2 Why You Need F-You Money

3 Can Everyone Really Retire a Millionaire?

4 How to Think About Money

5 Investing in a Raging Bull (or Bear) Market

Part II: How to Harness the World’s Most Powerful Wealth-Building Tool

6 There’s a Major Market Crash Coming!!!! And Even Famous Economists Can’t Save You

7 The Market Always Goes Up

8 Why Most People Lose Money in the Market

9 The Big Ugly Event

10 Keeping It Simple: Considerations and Tools

11 Index Funds Are Really Just for Lazy People, Right?

12 Bonds

13 Portfolio Ideas to Build and Keep Your Wealth

14 Selecting Your Asset Allocation

15 International Funds

16 TRFs: The Simplest Path to Wealth of All

17 What If You Can’t Buy VTSAX? Or Even Vanguard?

18 What Is It About Vanguard?

19 The 401(k), 403(b), TSP, IRA, and Roth Buckets

20 RMDs: The Ugly Surprise at the End of the Tax-Deferred Rainbow

21 HSAs: More Than Just a Way to Pay Your Medical Bills

22 A Couple of Case Studies

23 Why I Don’t Like Investment Advisors

Part III: Magic Beans

24 Jack Bogle and the Bashing of Index Funds

25 Why I Can’t Pick Winning Stocks and You Can’t Either

26 Why I Don’t Like Dollar Cost Averaging

27 How to Be a Stock Market Guru and Get on CNBC

28 You, Too, Can Be Conned

Part IV: What to Do When You Get There

29 Withdrawal Rates: How Much Can I Spend?

30 How Do I Pull My 4%?

31 Social Security: How Secure and When to Take It

32 How to Give like a Billionaire

Afterword

33 My Path for My Kid: The First Ten Years

34 Tales from the South Pacific

35 Some Final Thoughts on Risk

Tool Kit

The Punch List

FAQ

Resources

Acknowledgments

Foreword

There’s no shortage of stuff you really should be learning in this world, and no shortage of books about exactly that same stuff. Every bit of knowledge you could ever hope for is already waiting right there in a book somewhere. Or a whole shelf of books. Heck, you could probably fill an entire underground parking garage with all the books that have been written on the subject of investing alone and still find more pouring out onto the ground when you climb back out.

The problem is that most of those books are boring, and you end up setting them down with a bookmark somewhere around page 25, never to return. Even with the best of skills and intentions, I find that the writers of most books about stock investing cannot seem to get it right. They drag it out painfully or write paragraphs so dry and dense that you find yourself rereading the same passage over and over for half an hour while your mind wanders off to more interesting pastures.

JL Collins takes this old style of investment book writing and disregards it completely. He creates the stuff that your mind wants to run to when it is tired of reading about stocks. Instead of esoteric equations about measuring a stock’s alpha and comparing it to its beta, he compares the entire stock market to a large mug of beer and explains why it’s still worth buying even when it comes along with an unpredictable quantity of foam.

He lights up the campfire and just starts telling stories, and if those stories just happen to be about exactly what you wanted to learn in the first place, your new knowledge is a happy side effect.

This is exactly what happened in real life a few years ago, when JL started writing a series of blog posts about good investing. I read them all as they came out, and they were so good I started referring my own readers to them. The readers liked them so much, they referred others. Their numbers reached the thousands, then the hundreds of thousands.

Word kept spreading about the Stock Series (and still does to this day) because it is something people actually enjoy reading. Sure, the author has the technical chops and demonstrates them well in his own enviable financial life. But readers don’t keep coming back just to bask in technical wizardry—they are there to enjoy the fire and hear a good story.

I think that amazing response is what motivated JL to rewrite and expand his great Stock Series into this even better book. The Simple Path to Wealth is a revolutionary book on stock investing (and good finance in general) because you’ll actually read it, enjoy it, and then be able to immediately put the lessons profitably into action with your own money.

You’ll be relieved to hear that you can be very successful by holding only a single Vanguard fund over your entire lifetime. You can branch out and get a little fancier if you like, but there is nothing to lose—and everything to gain—by keeping things as simple as you can.

Although very few people actually follow it, I have found that the road to a wealthy life really is simple and quite enjoyable to follow, so it only makes sense that a book about it should have those same fine traits. This one does.

Peter Adeney

a.k.a. Mr. Money Mustache

Colorado, June 2016

A Parable: The Monk and the Minister

Two close boyhood friends grow up and go their separate ways. One becomes a humble monk, the other a rich and powerful minister to the king.

Years later they meet. As they catch up, the portly minister (in his fine robes) takes pity on the thin and shabby monk. Seeking to help, he says,

You know, if you could learn to cater to the king, you wouldn’t have to live on rice and beans.

To which the monk replies,

If you could learn to live on rice and beans, you wouldn’t have to cater to the king.

Most of us fall somewhere between the two. As for me, it is better to be closer to the monk.

The Simple Path to Wealth

Beginnings

If you reach for a star, you might not get one. But you won’t come up with a handful of mud either.

—Leo Burnett

How We Got Here

What you hold in your hands is a revised edition of a book, which itself grew out of my blog, which in turn grew out of a series of letters I wrote to Jessica, my then-teenage daughter. These letters concerned various things—mostly money and investing—she was not quite yet ready to hear.

Since money is the single most powerful tool we have for navigating this complex world we’ve created, understanding it is critical. If you choose to master it, money becomes a wonderful servant. If you don’t, it will surely master you.

But Dad, my little girl once said to me, I know money is important. I just don’t want to spend my life thinking about it.

For me this was eye-opening. I love this stuff. But most people have better things to do with their precious time than think about money. They have bridges to build, diseases to cure, treaties to negotiate, mountains to climb, technologies to create, children to teach, businesses to open and build.

Unfortunately, this benign neglect of things financial leaves you open to the charlatans of the financial world. The people who make investing endlessly complex because the more complex it is, the more profitable it is for them and the more expensive for us. We are then forced into their waiting arms.

Here’s an important truth: Complex investment instruments exist only to profit those who create and sell them. Further, not only are they more costly to the investor; they are less effective.

There are three key principles that have persisted from those letters, through the blog,