I just finished reading The Simple Path to Wealth: Your road map to financial independence and a rich, free life by JL Collins.📚 Complex investments are there only to profit the sellers and not the investor.
In this book, the author shows alternatives that allow everybody to start investing.
Please note that from here on out, the text can contain spoilers of the book.
I liked the introductory chapter explaining what it means when you buy something - regarding its opportunity costs. And also that it is freeing to have some money on the side. As it gives you more choices, in the end, this was nothing fundamentally new for me, but it was still lovely to have it written up somewhere.
When selecting your asset allocation, you should not fiddle too much with the investment. The simplest solution is to choose an index and let it sit. Everything else means you try playing the market – a game that nobody can do in the long term, less than 1% off professional funds manager, can time the market - you cannot.
An important factor is also to prevent paying taxes on your capital gains. The book contains multiple chapters on this topic. For me, these chapters did not directly provide value. I need to find this information somewhere else, so I at least know what to look out for. I’m pretty sure that my country has similar tools to reduce the tax burdens on capital gains.
I liked that this book gives concrete numbers, how much you can withdraw from your portfolio to live on without destroying your assets. So it allows you to let your money work for you. And it does not needs very much to be able to do this at all. When you start collecting money in your twenties over 20 years, you can collect enough to pull this off.
I should have read this book 15 years ago! It contains a lot of good information, but as investing needs many years, the earlier you start with it, the better. But still, I’ve enjoyed this book very much, and it contains a lot of helpful and especially easy-to-understand information. One drawback for international readers is that most of the information is not directly relevant when you live outside the USA. I highly recommend reading this book – no matter your age.
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