File Size: 3195 KB
Print Length: 288 pages
Publisher: jlcollinsnh.com; 1 edition (June 17, 2016)
Publication Date: June 17, 2016
This book is exquisite for newbies, and several seasoned investors who are sick and tired of searching for that short-term investment miracle. Collins stuck with Bogle’s purest message from the beginning to the final word. As a Bogle devotee, I appreciate his courage to stand upwards, write a terrific guide and argue effectively for the indexing strategy and against the delusional appeal of day-traders, hedge fund supervisors, active management strategies, termes conseillés, or those who claim they can successfully speculate and win big. Far too many normal investors get caught up in those phony, but exciting fantasies and lose. The new guy or gal buyer has got the skills to build a simple portfolio you understand, and then have the courage and the self-confidence to permanently ignore the media’s seductive financial sound machine.
The Simple Way to Wealth basic information to beginners is popular in the Do-it-yourself (DIY) investing culture:
• think long-term
• live below your means
• plan ahead with a fully diversified portfolio (except international stocks, more on this below)
• spend money on Vanguards low-cost index funds
Sooooo, what is not to like? I’ll admit it’s a boring plan, and not all DIYers embrace it. But I enjoy my dull plan and it’s exactly where the power of whatever we can do lies—after setting up our plan, we must be patient.
Collins writes much about psychology, for good reason. The power lies around. It's not us vs the big intimidating stock market. With time and experience, we learn to be psychologically tough for long periods of time. In the movie Wizard of OZ, Glenda told Dorothy that she “always had the power to go home again? ” It's the same for people investors. All of the features of a constructing a balanced plan remains under our control. It fairly easy to learn. However the hard part is the unfair and counterintuitive psychology. Thinking extensive is the best médicament. Over time the growth will pay enough of a return to meet or beat the inflation rate. Meeting or conquering inflation is a simple, realistic goal, and psychological attractive. This specific book shows you how to like saving with minimal time and work to discover the investment process.
Patience, psychology, and philosophy are a difficult sell. Many investing enthusiasts are more thinking about the adrenaline rush and running after the opposite sex than building wealth over time. The marketplace is not something to conquer or control. It is simply made upwards of wonderful organizations of hardworking people, called openly traded corporations. The writer explains how to funnel all that positive corporate energy, and simply flow with it, whether it goes upwards or down, and over time it goes up. The writer addressed the tough sell challenge with elegance and subtle toughness.
The writer discusses investment costs, fees, tax-deferred retirement plans proposed by employers, the retirement years and strategies to avoid running out of money. My favorite chapters are “Why I don’t like Investment Advisers” and “Some final thoughts about risk. ” Financial advisers are a fairly easy target with 100s of reasons not to like. Most of all of us DIYers will never have to have a financial adviser, for two good reasons: Collins creates “Nobody cares about your money more than you do, ” and “you can learn to control your money yourself with much less cost and better results. ” From my personal experience, knowing how to save investment costs only was enough to pay cash for the Tesla Model S.
On the subject of risk, my personal favorite part, and I estimate since the author was speaking to the zombie apocalyptics among us especially the financial media: “Major Armageddon disparitions events, like the asteroid that took your dinosaurs some 65 million years ago, have happened about five times. So that is about one every 10 million years or so. Are we arrogant enough to think it’s going to happen in the geological eye-blink we’ll be around? That we’ll be the ones to witness it? No likely. ” Economic Armageddon ain’t going to happen either.
There are several minor omissions. The author is not well known, so he needs to talk more about himself about what he did. I sensed like he had more to say as examples of his concerns over risk and the mistakes he made. All of that would have made the guide even more genuine and organic. The thing that was the role of his wife? Exactly what exactly did the author and his wife do for a living? He performed report that he worked as a financial analyst. Thus, was he in the financial industry? He performed not explain why he had an overly aggressive portfolio for an person in the 60s. He performed not share his diversity plan, only that he does not own international stocks (he explains why).
Consequently, I actually give him an A for telling us how to set up a portfolio and his rationale, but I actually provide him a B for not showing what exactly he did and for how long. His rationale is spot on, but portfolio construction and asset allocation strategies and information can be found in many books (The Boglehead Guideline to Investors, any guide written by Jack Bogle or his followers, Ferri, Swedroe, Roth, and Bernstein).
• Some other minimal items that I found perplexing. On page 246, he writes, “Save and commit at least 50% of your income. ” Exactly what? I reread this again and again, and could not comprehend why the author wrote this. In my working career, I could not even contribute the maximum allowed in my 403(b) plan let alone save 50% of my income (No, I never had new car payments because I could not pay for car payments and commit too). Yet, I arrived at financial independence at age 61. 50% of one’s income is overreaching and dangerously discouraging (unless you are a highly high level and talented employee with a 7 figure income). For the rest of us, just start with what you can pay for. For example, I started at age 37 with 0 a month in my 403(b), and this was a lot out of my meager income. Nevertheless I kept it upwards for 24 more years.
• Back to his strategy about avoid international stocks. The writer knows he will get pushback, and he probably has observed my argument for international investing many times. Diversity means investing in all available stocks, worldwide. Thus, let’s take benefit of these opportunities to spend money on just one fund, the Vanguard Total World Stock ETF (VT). The author would not get it. IMO, the writer might be reflecting his age because he states that investing in the United States domestic market is enough diversity due to the worn-out global connections argument. He tries to offer valid reasons, but they are out-of-date, and one about excessive costs is flatly wrong. Vanguard's Global fund charges. 14%. I actually don’t know about you, but that is inexpensive.
Also, I am 69 years old and old enough to remember my elders saying that is too risky to invest in international stocks. We are well into the 21st hundred years and the planet has transformed. Don’t you think that international corporations want to develop and prosper too? Needless to say. Seldom you think opportunities for diversification have evolved for the better? Yes. I actually want all the diversification as possible to reduce equity risk, and reduce unpredictability. I would even get higher returns, but that’s not part of my expectations. The global index funds or ITFs make full diversity in only one investment a synch.
• Another minimal objection is his downplaying the Roth IRA. I actually think he over complicated with seeking to predict the tax rate to decide to use or not use the Roth INDIGNACIÓN. It’s futile and a stupidity to guess the future. Not having to pay capital gains taxes after investing in the Roth IRA is among the best techniques for us regular investors (you actually can run the figures on a brilliant Exceed program created by The Finance Buff). After running the numbers on the Excel program, you will be thoroughly convinced to add the Roth IRA in your plan.
• 1 last objection. I recommend to readers who do not have a “lump sum” that is, a pack of money to commit already, that you overlook the “Why I do not like dollar cost averaging” chapter. I had to make use of DCA during my complete working career investing in my 403(b). Because I actually started from NOTHING and had less than fifty dollars, 000 for years. In case you have a group sum to invest, follow the author’s advice. Nevertheless I think I could communicate for most investors who have little choice but to use DCA. His opinion about DCA was more discouraging than encouraging.
Collin’s strong opinions about some of his investment ideas represent associated with his personality than sound investment practice. Of course, the author never intended to be disheartening. We are just responding as a reader with a few of my opinions about his outstanding work. That’s flawlessly fine for him as his opinions worked for him and they might work for you too. My opinions worked well for me personally. In the final analyses, he follows the “Boglehead” way. For that, I feel delighted he wrote a great self-published book showing once again the work of the legendary investor, recommend, and teacher, Jack Bogle. Outside of these minimal dissimilarities of opinion, Mr. Collins earned a well-deserved five stars.
In amount, if any author self-publishes a book about investment, I do believe it is important to readers to know that the message is organic—no other agenda item hangs in secret, other than to explain and lay out a simple plan which will connect with new investors and get them results., Exceptional read. Just more or less solidified that what I had been doing was the proper path to be taking. Mr Collins and Mr Cash Mustache are outstanding instructors in the ways of the financial and investment realms. Listen to them. Investing doesn't have to be difficult. You don't have to listen to the echo chambers on business news TV. At the end of the day, nobody truly knows what the market is heading to do and Collins goes in depth on explaining why attempting to time the market for your investments is a fool's errand. Nobody should have to get another job during their old age years to make comes to an end meet. Be a smart and non-emotional investor and retire with actual riches and don't assume social security will be there to help you together. Read this book and prosper. You can be retired in your 30's if you start early enough. Best of luck!, Purchased the book because I use read the majority of the things on his website. Really like the simplicity of his proposed retirement plan. Buy a mutual fund that tracks all US companies. Put money in whenever you can during your working career. Give it time to grow. Once you retire, purchase a bond fund to smooth out the trip from stock market changes with some per cent of the money. Venture out and live your life and give up worrying about money (within reason). Great couple of stories about people writer met on trip to Tahiti many years ago towards the end of the book. Book actually makes thinking/talking about old age financial plans entertaining. Advise reading his book and checking out his website., I am about 50 % way through this book and i also am just loving the fundamental simplicity of it. I have read other books on the subject and I think J Collins really hits this one home. It is not a get rich quick book and he makes it well known through the beginning of the book. The data put forwards matches a lot of my understanding of investment long-term. I think he will do a great job streamlining some of the jargon out there and again his ideas up with his personal experience in a way that is not overbearing and " look at me" in tone. I suggest this book!!
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