The Simple Path to Wealth
No worries. Take a look at a global fund like VTWSX (Vanguard Total World Stock Index). This is an index fund that invests all over the globe. In some ways I like it even better than my beloved VTSAX. I don’t recommend it instead only because of its relatively steep expense ratio (.25%) and because VTSAX covers international pretty well for the rea
... See moreJL Collins • The Simple Path to Wealth
Finally embracing the indexing lessons Jack Bogle—the founder of The Vanguard Group and the inventor of index funds—perfected 40 years ago.
JL Collins • The Simple Path to Wealth
In the Berkshire Hathaway 2013 annual shareholder letter Buffett writes: “My advice … could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained
JL Collins • The Simple Path to Wealth
In 1935, for men the average was around 65, for women about 68. Since then, life expectancy in the U.S. has continued to expand. As of 2013, according to the World Health Organization, it is now ~77 for men and ~82 for women. From those numbers it’s easy to see that setting the age to collect Social Security at 65 was a pretty good bet for the syst
... See moreJL Collins • The Simple Path to Wealth
We keep talking about the insolvency of Social Security but it would be worth looking into regressions in life expectancy caused by unhealthy modes of living. I have no idea what pace that regression is at or if that’s a country-wide trend, but it could be that the system is not insolvent if unhealthy folks start dying sooner.
They can, and most often do, make things much worse and they always charge more fees to do so. We’ll talk a bit more about this in a later chapter.
JL Collins • The Simple Path to Wealth
As untrue as this is, it’s actually a healthy skepticism. It’s just on a professional money manager to show that they can beat the averages over a long period of time.
This means you must recognize the counterproductive psychology that causes bad investment decisions—such as panic selling—and correct it in yourself. In doing so, your investments will be far simpler and your results far stronger. To start you need to understand a few things about the stock market: 1. Market crashes are to be expected.
JL Collins • The Simple Path to Wealth
Each year I calculate what income we have and—consistent with remaining in the 15% tax bracket—I shift as much as I can from our regular IRAs to our Roths. This is in preparation for the RMDs coming at age 70 1/2. When that time comes, I want our regular IRA balances to be as low as possible.
JL Collins • The Simple Path to Wealth
It’s not hard. Stop thinking about what your money can buy. Start thinking about what your money can earn.
JL Collins • The Simple Path to Wealth
- The market always recovers. Always. And, if someday it really doesn’t, no investment will be safe and none of this financial stuff will matter anyway.