
The Simple Path to Wealth

Churning refers to the frequent buying and selling of investments to generate commissions. It is illegal. But it is also easily disguised, principally as “adjusting your asset allocation.”
JL Collins • The Simple Path to Wealth
Roth 401(k) = No immediate tax benefit, tax-free growth and no taxes due on withdrawal.
JL Collins • The Simple Path to Wealth
When you leave your employer you can roll your 401(k) into an IRA, preserving its tax advantage.
JL Collins • The Simple Path to Wealth
Making a few sound choices and letting them run is the essence of success, and the soul of The Simple Path to Wealth.
JL Collins • The Simple Path to Wealth
Each of these Target Retirement Funds is what is known as a “fund of funds.” This just means that the fund holds several other funds, each with different investment objectives. In the case of Vanguard, the funds held are all low-cost index funds.
JL Collins • The Simple Path to Wealth
Put all your eggs into one large and diverse basket, add more whenever you can and forget about it. The more you add the faster you’ll get there.
JL Collins • The Simple Path to Wealth
The great irony of investing is that the more you watch and fiddle with your holdings the less well you are likely to do.
JL Collins • The Simple Path to Wealth
A big factor in determining the interest rate paid on a bond is the anticipated inflation rate. Since some inflation is almost always present in a healthy economy, long-term bonds are sure to be affected. That’s a key reason they typically pay more interest. So, when we get an Inverted Yield Curve and short-term rates are higher than long-term rate
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The longer a bond’s term, the more likely interest rates will change significantly before it matures, and that means greater risk.