Book Review – The Simple Path to Wealth by JL Collins
JL Collins is one of the first people to start blogging about FIRE, he began over 10 years ago back in 2011, and since this time the FIRE world has exploded in popularity. JL Collins is one of the trendsetters that put FIRE into the mainstream.
He does not just talk the talk but walks the walk and has retired early a couple times throughout his career, and at the moment I believe he is retired again, potentially permanently this time, but there is always the option for him to go back to work if he feels the need.
JL Collins provides a simple message that by having financial independence it can give you the freedom to live the life that you want to.
That is a bit of a background regarding JL Collins, I think it means a lot to be reading something from someone that has successfully traversed the journey of financial independence, rather than just someone who is simply a spruiker who is just out there trying to make the money. You can tell that JL Collins isn’t out there trying to build his wealth with his book, because you can actually get it for free in an eBook if you look hard enough. That being said, the book is definitely worth every cent if you do want to purchase a hard copy.
My favourite part of this book is how simplified he really does make things sound. And he is not wrong, the process of FIRE really is simple, and that a lot of people can potentially make it a lot more complicated than it really needs to be. JL Collins regularly focuses on making the message as simple as possible, spend less than you earn, and invest the gap, and let it build over time. That is all you need to do.
The book also goes into other important factors involved with wealth creation, and there is a big point to eliminate and prevent debt from entering your life. This is another characteristic that needs to be enforced more vigorously as a lot of people do get themselves unnecessarily into debt. Although, JL Collins does seem to push for never going into debt, which I do believe is unrealistic, particularly in Australia if you were looking at purchasing a property.
I should say now that JL Collins is US Based, so there are a lot of chapters in the book which are US specific, and even the ETF he recommends is a US based one that is not really accessible to Australians (at least not easily), but the principles remain the same.
There are also plenty of chapters which are completely irrelevant for Australians, talking about Roth IRAs, Pension Funds (very rarely relevant to Australians), the necessity for Health Insurance, and a couple other things. These chapters can easily be flicked over because they offer minimal relevance to the Australian situation. But the vast majority of the book is still relevant enough that it is able to have universal principles relating to FIRE.
Lastly, I believe the biggest benefit from this book was going through the psychological aspects associated with investing, dealing with the risks and how to deal with it personally when there are hard times through investing. It does not matter how many times we hear about having to stay strong through difficult times, actually having to go through it ourselves is a whole new story. It is interesting to see that JL Collins went through a crash early on in his investing career and actually made the mistake to sell close to the bottom, he fell for the hype and ended up losing a fair bit of money. At least he was able to learn from his previous errors and has not made the same mistake again, and hopefully reading his book, we can learn from his experience.
This was the first time I read a book which was specific to FIRE and written by a prominent member from the FIRE community. I thoroughly recommend this book to anyone who is starting out on their FIRE journey, or even if they are closer to the end of their journey, there really is something for everyone in this book. JL Collins also writes in a really upbeat tone which makes it light and easy to read, I was able to flip through the book relatively quickly.
If you want to read more from JL Collins he has plenty of articles available on his website.