The simple path to wealth, book review

The simple path to wealth

I liked the author’s podcast interview by Mad Fientist, and I bought this book for two important reasons:

· it was self-published

· The author’s persistent reference to Jack Bogle’s.

I support self-published financial authors because the traditional publishers deploy editors to tweak the author’s voice, and original story, to make the final “processed” book more sellable.

Instead, self-published authors do not have to satisfy shareholders or generate sales, so the author’s message about Bogle’s investment philosophy and the company he founded, Vanguard, remains organic for the readers best interest.

This book is perfect for beginners, and some 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 last word. As a Bogle devotee myself, I appreciate his courage to stand up, write a terrific book and argue effectively for the powerful and low-cost indexing strategy and against the delusional appeal of day-traders, hedge fund managers, active management strategies, timers, or individuals 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 investor gets the skills to construct a simple portfolio you understand, and then have the courage and the confidence to permanently ignore the media’s seductive financial noise machine.

The Simple Path to Wealth’s basic message to beginners is well-known in the Do It Yourself (DIY) and especially for the youthful Financial Independence (FIRE Financial Independence Retire Early) community.

• Think long-term
• Live below your means
• Plan ahead with a fully diversified portfolio (except international stocks, more on this below)
• Invest in Vanguards low-cost index funds

 

What is not to like?

 

I’ll admit it’s a boring plan, and not all DIY will embrace it. But I love my boring plan and it’s exactly where the power of what we can do lies, after setting up our plan we must be patient.

Collins writes much about psychology, for good reason. The power lies with us, not us versus the big intimidating stock market.

With time and experience, we learn to be psychologically tough for long periods of time.

The hard part is the unfair and counterintuitive psychology. Thinking long-term is the best antidote. Over time the growth will pay enough of a return to meet or beat the inflation rate. Meeting or beating inflation is a simple, realistic goal, and psychologically attractive.

This book shows you how to like saving with minimal time and effort to discover the investing process.

Patience, psychology, and philosophy are a difficult sell. Many investing aficionados are more interested in the adrenaline rush and chasing the opposite sex than building wealth over time. The market is not something to conquer or control. It is simply made up of wonderful organizations of hardworking people, called publicly traded corporations. The author explains how to harness all of that positive corporate energy, and just flow with it, whether it goes up or down, and over time it goes up. The author addressed the tough sell challenge with elegance and subtle toughness.

My favorite chapters are “Why I don’t like Investment Advisers” and “Some final thoughts about risk.”

Financial advisers are an easy target with hundreds of reasons not to like. Most of us DIYers will never need a financial adviser, for two good reasons:

Collins writes “Nobody cares about your money more than you do” and “you can learn to manage your money yourself with far less cost and better results”

From my personal experience, knowing how to save investment costs alone was enough to pay cash for the Tesla Model S.

Are we really 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?

Not likely.” Economic Armageddon is not going to happen either.

There are a few minor omissions. The author is not well known, so he needs to talk more about himself about what he did. I felt like he had more to say as examples of his fears of risk and the mistakes he made.All of that would have made the book even more authentic and organic.

In sum, if any author self-publishes a book about investing, I think it is important to readers to know that the message is organic — no other agenda item hangs in secret, other than to explain and layout a simple plan which will connect with new investors and get those results.