the Simple Path to Wealth by JL Collins introduction what if wealth wasn't complicated what if you didn't need to be a financial expert to retire comfortably or even early in this video we explore The Simple Path to Wealth by JL Collins a life-changing guide to mastering money escaping debt investing wisely and achieving true freedom whether you're just starting out or feeling stuck financially this is your road map to peace of mind and independence no fluff no jargon just timeless principles that actually work ready to stop stressing about money and start building wealth on your terms let's dive in section one the wealth mindset before we talk numbers investments or retirement accounts we need to address something far more important your mindset because here's the truth wealth doesn't begin with a paycheck it begins with a perspective you can earn a lot and still stay broke if your thinking is rooted in scarcity status or short-term gratification but when your mindset shifts when you begin to see money not as the goal but as a tool that's when your financial journey truly begins this is where the simple path to wealth begins with a conversation not about how to get rich but about why jl Collins originally wrote the ideas in this book as a series of letters to his daughter he wasn't trying to turn her into a stock trader or financial wizard he wanted to prepare her for a life of freedom a life where money wasn't a source of stress but a source of security peace and choice and in doing so he stumbled onto something powerful the most important part of wealth building isn't knowledge it's mindset so what is the wealth mindset at its core it's understanding that money is simply a tool it's not the end goal it's not a symbol of your value or a scoreboard of success it's just a means to an end and that end is freedom the ability to choose how you spend your time who you spend it with and what kind of life you want to create when you internalize that everything changes this is a radical shift for many of us we've been trained from a young age to think like consumers not owners from the moment we start earning we're bombarded with messages telling us that more spending equals more happiness that the car the outfit the house the vacation those are the markers of a life well-lived but JL Collins challenges that idea he invites us to see money not as something to burn through for temporary pleasure but as something to save invest and grow so it can buy us something far more valuable our time back freedom is the ultimate wealth not a mansion not a sports car not a Rolex true wealth is the ability to walk away from a job you hate to take a month off when life demands it to sleep well at night knowing your bills are paid and to retire decades earlier than most that kind of freedom doesn't happen by accident it happens by adopting the wealth mindset without this foundation even the best financial strategies won't stick you'll hear advice like invest in index funds or avoid debt but if your mindset is still caught up in chasing status or short-term thrills you won't follow through you'll sabotage your own progress that's why Collins starts here because mindset is the lens through which all financial decisions are made so how do you begin developing this wealth mindset in your own life first you shift from consumerism to ownership instead of asking "What can I buy with this money?" Ask "How can I make this money work for me?" That doesn't mean you never enjoy your earnings it means you learn to find joy in building something lasting it means choosing delayed gratification over instant pleasure it means understanding that every dollar saved and invested is a seed for future freedom second you stop thinking in terms of luxury and start thinking in terms of independence for example instead of dreaming about a $50,000 car dream about what it would feel like to have $50,000 invested and earning returns for you instead of tying your identity to what you own begin to tie it to what you can choose the freedom to travel to take creative risks to care for loved ones to live life on your own terms a real world example of this mindset is seen in the way JL Collins approached teaching his daughter about money he didn't overwhelm her with complex financial strategies he gave her the mindset first he told her to avoid debt to live below her means and to invest in lowcost index funds but most importantly he taught her to see money as her ally not a burden not a master but a tool for crafting a life of freedom this kind of mindset is accessible to everyone regardless of where you're starting from you don't need to be rich to begin thinking like the wealthy in fact it's often those who've had to be resourceful those who've had to stretch every dollar who are best positioned to make this mindset shift because they already understand the value of money and the cost of financial stress let's be clear the wealth mindset doesn't mean never spending money it doesn't mean hoarding or living like a monk it means spending intentionally it means aligning your spending with your values if freedom is your highest value then you begin prioritizing savings investments and debt-free living over consumer trends or social comparisons and here's where the real magic happens when you adopt the wealth mindset you begin to experience a kind of peace that most people never feel you're not constantly chasing the next thing you're not trying to impress others or fill emotional voids with shopping sprees you're focused clear and purposeful and every financial decision you make becomes a step toward your freedom this mindset also protects you when life gets messy and it will markets crash jobs get lost emergencies happen but when your mindset is rooted in simplicity independence and long-term thinking you don't panic you stay the course because you're not trying to get rich quick you're trying to get free and that's a much more powerful motivator so here's your challenge for today a simple but powerful question what does financial freedom look like to you not the vague idea of being rich but the actual details what would your day look like if you didn't have to worry about money where would you go who would you be with what kind of work would you do or not do define it write it down because once you have a clear vision every financial decision becomes easier you can ask yourself does this bring me closer to that freedom or farther away remember the journey to wealth doesn't begin with an investment account it begins with a decision a decision to think differently to value freedom over flash to trust that simple consistent action over time will get you where you want to go that's the wealth mindset and once it clicks everything else becomes simple section two avoiding debt and escaping the trap debt it's the silent predator lurking behind every paycheck every shopping spree and every monthly bill that comes with interest attached it doesn't roar it whispers it invites you to live a little to enjoy life now and to pay later but make no mistake debt is a trap and JL Collins pulls no punches about this he calls it what it is a financial prison and the sooner we recognize it as such the sooner we can escape in the simple path to wealth Collins makes it clear avoiding debt is not optional if you want to build lasting financial freedom why because debt doesn't just take your money it takes your peace your options your ability to invest and ultimately your future you cannot invest your way to wealth if your interest payments are bleeding you dry you can't move forward if you're dragging a ball and chain of past purchases behind you and here's the kicker debt traps everyone not just those with low incomes in fact some of the most trapped people are those who make six figures and still live paycheck to paycheck why because their lifestyle inflated as their income rose they bought the car they upgraded the house they put the vacation on the credit card the raise came and the expenses grew with it this is called lifestyle creep and it's one of the most dangerous enemies of wealth it creates the illusion of prosperity but it's built on sand imagine this two people making $100,000 a year one lives on $70,000 invests the rest and avoids debt like the plague the other finances two new cars carries $15,000 in credit card debt and spends every bonus upgrading their lifestyle 10 years later one has a growing investment portfolio and the freedom to work or not work the other has flashy things but nothing to show for it and stress to spare debt doesn't care how much you make it only cares how much you owe and if you're paying 18 to 24% interest on a credit card there is no investment on earth not even the mighty stock market that can outpace that cost that's why Collins doesn't suggest managing debt he says obliterate it kill it burn the bridge and never look back the most dangerous form of debt is highinterest consumer debt things like credit cards payday loans and store financing these are designed to keep you stuck every time you pay the minimum you're feeding the beast and even when you think you're getting ahead the interest pulls you back down it's financial quicksand so how do you escape this trap jl Collins recommends two things never take on highinterest debt in the first place and if you already have it make getting rid of it your top financial priority before you start investing before you save for a house before you dream about retirement kill the debt why because every dollar you pay off is a guaranteed return if your credit card interest is 20% paying it off is like earning 20% on your money risk-free that's powerful practically one of the most effective ways to do this is the avalanche method here's how it works you list all your debts from highest interest rate to lowest you continue making minimum payments on all of them but you throw every extra dollar at the highest interest debt first once that's gone you move to the next highest it's not always the most emotionally satisfying method the snowball method which tackles smallest balances first can be more motivating but avalanche is the most mathematically efficient and when you're fighting for your financial life efficiency matters let's look at a real world example imagine someone with $30,000 in credit card and personal loan debt their minimum payments are $800 a month and the average interest rate is 20% that means they're paying $6,000 a year in interest alone money that does nothing for them except keep them afloat now imagine that same $800 being invested monthly into a lowcost index fund over 10 years that could turn into more than $140,000 the opportunity cost of staying in debt is staggering and yet millions of people stay stuck here not because they're lazy or irresponsible but because debt has been normalized banks call it leverage advertisers call it buy now pay later culture calls it living your best life but it's none of those things it's a cage and once you're in it's hard to get out because debt doesn't just steal money it steals hope it makes you feel behind it fills you with shame it causes stress in relationships it affects your health it makes you think that freedom is impossible but here's the truth Collins wants you to hear you can escape and you must because your future depends on it if you're in debt right now don't panic don't despair just begin start by facing the numbers make a list of every debt you owe the balance the interest rate the monthly payment don't hide don't sugarcoat just be brutally honest that list is your enemy but it's also your road map once you've got the list calculate your freedom date the day you'll be debtree if you go allin make a plan cut expenses sell things pick up side income but most importantly get obsessed with one thing getting out make it a game make it your mission make it the mountain you're going to conquer because once you're debtree the doors of wealth swing wide open suddenly your money is yours again you can save invest and grow it without the constant leak of interest payments you can breathe you can plan you can build and if you haven't yet fallen into the debt trap let this be your wakeup call to stay out avoid financing cars pay off your credit card every month don't borrow for wants only for needs and even then with caution the best kind of debt is no debt debt isn't just a financial issue it's a freedom issue and that's what the simple path to wealth is all about freedom every dollar of debt you pay off is a step closer to that freedom every payment you avoid by not borrowing is a victory every time you choose to live below your means you're taking power back so here's your challenge today list every debt you have be specific then ask yourself if I made this my focus how long would it take me to be free that's your freedom date circle it on the calendar work backward get aggressive get creative but get serious because every day you stay in debt is a day your dreams are on hold you don't need a miracle to get out of debt you just need a plan a mindset and a burning desire to be free and once you're out stay out because that's when the real journey to wealth begins section three spend less than you earn if there were a single phrase that could act as the cornerstone of wealth it would be this spend less than you earn it sounds simple maybe even obvious but it is profoundly powerful in fact this one idea is the heartbeat of the simple path to wealth without it nothing else in the book matters you can understand investing inside and out have the perfect portfolio and even earn a six-figure salary but if you don't spend less than you earn you'll always be treading water financially you'll never build wealth you'll only ever chase it why because you cannot invest what you do not save jl Collins explains that your savings rate the percentage of your income that you set aside instead of spend is the most important factor in how quickly you can achieve financial independence not your income not your investment returns not your stock picks your savings rate it's the engine that drives the car think about it if you earn $4,000 a month and spend $4,000 your savings rate is 0% even if you have a great job you're not moving forward you're working to sustain your lifestyle not build your future on the other hand if you earn $4,000 and spend $3,000 you're saving $1,000 every month that's $12,000 a year money that can be invested grown and used to buy your freedom this principle is powerful because it puts the control back in your hands you might not be able to double your income overnight but you can reduce your spending today and even if your income is modest if you manage to live significantly below your means you can still build wealth over time in fact some of the wealthiest people in America are not flashy tech founders or high earning doctors they're quiet everyday people who embraced this principle and stuck with it they are what Thomas Stanley and William Denko called the millionaire next door the millionaire next door isn't driving a brand new luxury car he's driving a reliable used vehicle that's paid off he isn't wearing designer brands or dining out every night he's packing lunch shopping smart and living in a modest home in a decent neighborhood his wealth is hidden not flaunted but it's real it's growing and it gives him peace and power most people never experience that's the beauty of frugality not as a punishment but as a path to freedom too many people hear frugality and think sacrifice but JL Collins reframes it he shows that frugality is not about deprivation it's about deliberation it's about aligning your spending with what truly brings you value and cutting out the rest why spend $5 on a coffee every day when you can brew it at home for pennies and invest the difference why buy a brand new car when a reliable used one will get you to the same places without draining your wallet frugality means learning the difference between needs and wants between status and substance between impulse and intention it's about being clear on your goals and letting those goals guide your financial decisions now this doesn't mean you have to live like a hermit collins isn't asking you to eliminate all joy from your life he's asking you to be intentional to understand that every dollar you don't spend is a dollar that can be saved invested and put to work buying back your time so how do you start spending less than you earn step one is awareness you cannot improve what you don't measure track your expenses for the next month every dollar Use a spreadsheet an app like YNAB or Mint or a simple notebook it doesn't matter what matters is that you get a clear picture of where your money is going you might be surprised the $9 subscription here the $30 impulse buy there the $200 on restaurants it all adds up awareness is the first step toward change step two is cutting the fat look at your list of expenses and ask yourself "What could I cut by 10% this month without really feeling it could I cancel that subscription I never use could I cook more meals at home could I swap the gym membership for free outdoor workouts?" The truth is many of us have dozens of small leaks in our financial boats plugging just a few of them can lead to significant savings over time step three is increasing the gap between your income and expenses you can do this by cutting spending and or raising income take on a side hustle ask for a raise sell things you don't use start a small online business there are countless ways to boost your income today and every extra dollar you don't spend is a dollar closer to financial independence and here's the exciting part the more you save the faster you can buy your freedom jl Collins breaks it down like this if you save 10% of your income it might take you 50 years to retire but if you save 50% you could retire in just 15 to 17 years the math is simple the higher your savings rate the less time you spend working for money and the more time you spend letting money work for you let's look at a quick example say you earn $60,000 per year and spend $40,000 that's a 33% savings rate if you invest that $20,000 each year in a lowcost index fund with an average return of 7% in 20 years you'll have over $820,000 that's not counting compound growth beyond that point now imagine cutting your expenses even more or increasing your income you can easily shave years off your working life the key isn't perfection it's progress every dollar saved is a step toward freedom every expense questioned is a moment of clarity every intentional decision compounds into a life of independence so here's your challenge how much did you spend last month if you don't know find out pull your bank statements your credit card bills your receipts tally it up then ask yourself could I cut 10% without pain not suffering not starvation just smarter choices a 10% cut might mean skipping a few takeouts cancelling a streaming service or downsizing one part of your lifestyle but the long-term impact huge the ability to spend less than you earn is a superpower it's what separates the financially secure from the financially stressed it's what allows you to build wealth even on a modest income it's the silent discipline that creates loud results and best of all it's completely within your control you don't have to wait for a promotion you don't need a financial advisor you don't have to be perfect you just have to make one powerful decision to live on less than you make to build a gap and then grow that gap that gap is your freedom that gap is your future so start today cut 10% track everything reclaim control and watch what happens when you begin living below your means instead of above them because that's how wealth begins not with a lottery ticket or a lucky break but with one small consistent decision spend less than you earn section four the power of FU money there's a concept in the simple path to wealth that's both practical and deeply empowering jl Collins calls it FU money crude maybe but its raw honesty is part of what makes it so potent it's not just about having money in the bank it's about having the power to walk away from a job a boss a toxic relationship or a system that doesn't align with your values it's about reclaiming your autonomy in a world where most people are trapped by financial dependency so what exactly is FU money in its simplest form FU money is the financial cushion that allows you to make decisions based on what you want not what you need to survive it's enough saved and invested that you're not forced to say yes when you want to scream no it's the space between desperation and dignity between being stuck and having a choice jl Collins doesn't glamorize wealth for its own sake he isn't advocating for private jets and golden watches what he's offering is far more valuable freedom and FU money is the gateway to that freedom imagine this you're working in a job that drains you the culture is toxic the hours are brutal and your boss treats you like you're disposable but you can't leave because the bills are due the rent is coming and your savings are non-existent so you stay you swallow your pride you endure now contrast that with someone who has a buffer a savings account with 12 months of expenses that person walks in hears the same abuse and smiles they say "Thanks but I'm done here." That's the power of FU money collins tells the story of his own turning point after decades in the corporate world he reached a moment where enough was enough the job wasn't worth it anymore but unlike many he could walk away without fear why because he'd been quietly building his financial cushion for years he didn't need the paycheck anymore that freedom gave him the clarity and confidence to live life on his own terms this isn't about recklessness it's not about flipping off your boss just for fun it's about having the option to choose integrity over income it's about not being financially coerced into situations that compromise your well-being fu money is your escape hatch your lifeline your silent source of strength when everything else feels out of control and here's the best part you don't need to be a millionaire to have it you can start building FU money with a simple practical goal 6 to 12 months of living expenses saved and easily accessible that's it not your dream retirement number not some elusive financial independence target just enough to breathe enough to pause enough to make clear-headed decisions without the sword of debt or unemployment hanging over you this is your emergency fund but upgraded it's not just for flat tires and medical bills it's for moments of truth when your values are tested when you're offered a job that doesn't align with your goals when you want to take a sbatical start a business or just take a break to find your footing again f you money is your permission slip to live boldly not desperately so how do you start building it first know your number what are your monthly living expenses truly not your income not your lifestyle spending your bare minimum needs rent or mortgage groceries utilities transportation insurance the essentials total that up and multiply by 6 to 12 that's your FU money target for many people it's somewhere between$10,000 and $30,000 it's not small but it's not impossible either then create a dedicated account for this money don't mix it with your checking account label it clearly freedom fund walk away money FU money whatever inspires you automate contributions to it each month treat it like a non-negotiable bill because in a sense it is you're buying your future freedom in installments next protect it this money is not for vacations or upgrades or splurges it's not for new gadgets or nights out it's sacred it's the moat around your mental and emotional well-being it's not meant to be touched until you need it most and here's the beautiful irony once you have fu money you'll probably need it less often why because you'll act from a place of strength not fear you'll carry yourself differently in negotiations you'll take smart risks you'll be less likely to tolerate disrespect or burnout people can sense when you're not financially desperate and that confidence changes everything it's not about being rich it's about being resilient let's look at a real life example sarah is a 35year-old project manager earning $70,000 a year she lives modestly and saves 30% of her income over time she builds up $25,000 in savings roughly 9 months of expenses one day her company gets bought out and the new leadership begins gutting departments the culture shifts toxicity grows people are afraid but Sarah isn't because she knows something others don't she has options she takes her time she interviews carefully she finds a remote job with better pay and a healthier environment she makes a move from strength not survival that's the hidden power of FU money it gives you leverage in a world that often robs you of it and it's not just about jobs fu money can save you from bad relationships too many people stay in unhealthy or even abusive situations because they don't feel financially secure enough to leave building a cushion isn't just a financial strategy it's a tool for personal empowerment it can be the difference between staying stuck and stepping into the life you deserve so ask yourself this how much money would you need to say no without fear not just no to bills but no to disrespect burnout and regret that's your number write it down make it your mission build toward it with every paycheck every side hustle every smart spending choice because FU money isn't about being reckless it's about reclaiming control it's the quiet confidence of knowing that if everything goes sideways you'll still be okay it's the strength to choose principle over panic it's the peace that comes from knowing you're not trapped and ultimately it's what gives the rest of the simple path to wealth its meaning because wealth in its purest form isn't about consumption it's about freedom fu money is your first taste of that freedom and once you've had it you'll never want to go back so start now build your cushion claim your power because nothing in your financial life will feel as good or as liberating as knowing that you can walk away and still stand tall section five the stock market is your ally let's face it the stock market gets a bad rap it's seen by many as a chaotic casino a mysterious place where fortunes are made and lost by slick traders in fast-paced suits but if there's one myth the simple path to wealth shatters it's this the stock market isn't your enemy it's your greatest ally if you understand how to use it wisely it can quietly steadily and powerfully build your wealth while you sleep jl Collins puts it bluntly the stock market is a wealthb buildinging machine but it only works for those who know how to play the long game it's not about chasing hot stocks or timing the next crash it's about participating in the growth of the global economy by owning pieces of the best companies in the world and doing it consistently simply and patiently here's the truth over the long term the stock market has always gone up yes it dips yes it crashes but it recovers historically it's returned about 7% annually after inflation which means that your money doubles roughly every 10 years no savings account no certificate of deposit no checking balance can come close to that kind of growth so why do so many people stay out of the market fear confusion misinformation and above all a lack of trust that's why Collins wrote his famous stock series to explain in plain English how the market works and more importantly how you can win with it the foundation of his advice invest in lowcost broad-based index funds more specifically he recommends VTSAX the Vanguard Total Stock Market Index Fund why because it gives you instant ownership in over 4,000 companies across every sector of the US economy tech healthcare finance energy consumer goods it's all there if the economy grows you grow if the market thrives you thrive you're not betting on one company you're betting on human progress now let's pause for a moment and look at real numbers over the past 30 years VTSAX has returned an average of about 10% annually that means if you invested $10,000 in 1994 and left it alone by 2024 you'd have over $170,000 that's not magic that's the miracle of compounding powered by consistent investing in the stock market but here's the catch this only works if you stay in the game you can't panic sell every time the market drops you can't try to time the dips or chase the next big thing the secret is to keep investing month after month year after year regardless of the headlines as Collins says the market always recovers always he tells the story of his daughter the primary reason he started writing about money in the first place he wanted to leave her with a road map something simple effective and timeless and his advice put your money into VTSAX keep your costs low don't try to beat the market and let time do the heavy lifting that's it no day trading no predictions just simple steady investing it's worth mentioning why index funds are so powerful first they're diversified you're not putting all your eggs in one basket you're spreading risk across thousands of companies second they're low cost traditional mutual funds charge fees that eat away at your gains index funds like VTSAX charge less than 0.05% annually that means more of your money stays invested and growing third they're passive which means less stress less research and fewer decisions to make you just set it and forget it this approach might sound boring and that's the point boring investing is often the most profitable it avoids the emotional roller coaster it shields you from the flashy but risky trends and it rewards discipline over time think of it this way every dollar you invest in the stock market is a tiny worker you're sending out into the world over time those workers generate returns they create more dollars and those new dollars become workers too your job keep sending more workers out keep feeding the system and one day your army of dollars will be working so efficiently that you won't have to let's look at another example meet David he's 25 and just getting started he decides to invest $500 a month into VTSAX nothing flashy just a consistent habit by the time he's 65 assuming a 7% return he'll have over $1.3 million he never made a fortune he didn't win the lottery he simply used the stock market as his ally and gave it time to work its magic compare that with someone who saves their money by keeping it in a traditional bank account with inflation averaging around 3% annually their purchasing power shrinks every year they may feel safe but safety comes at a cost the slow erosion of wealth that's why Collins is so passionate about getting people into the market not because it's trendy but because it works and remember investing doesn't mean gambling gambling is unpredictable short-term and emotionally charged investing is patient long-term and grounded in data it's the difference between playing a slot machine and planting a tree so here's your challenge today are you investing or are you just saving are you letting your money grow or are you letting it sit idle if you haven't started now is the time you don't need thousands of dollars you can start with $50 what matters is building the habit open a brokerage account choose a lowcost index fund set up automatic contributions ignore the noise trust the process and watch what happens in 10 20 30 years this is how ordinary people become millionaires not overnight but over time jl Collins reminds us that the market doesn't care about headlines tweets or political drama it reflects the long-term growth of businesses and the economy and when you invest in it wisely you tap into the same engine that has built wealth for generations the stock market isn't something to fear it's something to understand something to harness and when used right it becomes your quiet partner in building a life of freedom so take that first step don't let fear hold you back don't wait for the perfect moment because it never comes instead trust in the simple path trust in history and most of all trust in your future the stock market is your ally now go and make it work for you section six the magic of index funds let's cut through the noise when it comes to investing there are two roads you can take one is crowded noisy filled with financial experts shouting conflicting advice flashy apps promising 10x returns hot stock tips hedge funds and high stakes trading the other road quiet simple almost boring but here's the kicker that second road consistently outperforms the first that road is index fund investing and it's the magic key that JL Collins advocates for in the simple path to wealth the core idea is this simplicity beats complexity especially in investing index funds particularly total stock market index funds like VTSAX are not just beginner friendly they're what many of the world's smartest investors recommend for everyone including professionals that's not because people aren't smart enough to pick stocks it's because even the smartest professionals often can't beat the market consistently especially after fees taxes and human emotion take their toll so what exactly is an index fund it's a type of mutual fund designed to track a market index like the S&P 500 or in the case of VTSAX the entire US stock market instead of trying to pick winning stocks the fund owns a tiny piece of everything from Apple and Amazon to the coffee company you've never heard of this diversification makes index funds inherently less risky but more importantly they match the performance of the market itself which historically has been one of the most powerful wealthbuilding tools in existence jl Collins didn't stumble onto index funds by accident like many of us he first tried the hard way picking stocks chasing returns and trying to beat the system but over time he realized the market is humbling most investors including professional money managers fail to outperform the market study after study confirms this in fact over 90% of actively managed mutual funds underperform index funds over a 15-year period that's right most of the people paid to beat the market can't even keep up with it why because of fees poor timing emotional decisions and the sheer unpredictability of markets active fund managers not only charge higher fees sometimes 1 to 2% annually or more but they also buy and sell frequently generating capital gains taxes and transaction costs that eat into your returns in contrast index funds are lowcost lowmaintenance and tax efficient they don't try to beat the market they become the market and let it do the heavy lifting collins famous recommendation is simple buy VTSAX invest regularly don't touch it let time compounding do their thing and he didn't just recommend this strategy to readers he gave it to the person he cares about most his daughter in fact the entire foundation of the simple path to wealth came from the letters and lessons he wrote to her he wanted her to be free not just financially secure but free from fear complexity and dependence on others for her future her entire portfolio 100% in VTSAX that's it no bonds no reites no crypto just one single fund that covers the entire market think about that for a moment a fully diversified portfolio thousands of companies from every industry of every size all in one fund and the cost just 0.04% in annual fees that means for every $10,000 invested you pay only $4 per year in management fees compare that to traditional mutual funds charging 1% that's $100 per year on the same amount over decades that difference is staggering high fees quietly rob you of your future index funds protect it let's go deeper if you invest $500 per month for 30 years with a 7% average return after inflation you'll end up with about $567,000 but if you're paying just 1% more in fees your portfolio drops to about $432,000 a difference of over $135,000 just because of fees that's why Collins is passionate about this fees matter they seem small but over decades they take a massive bite out of your wealth now you might hear some people say "But what about the next big thing i want to invest in AI or tech or the next Tesla." That kind of thinking is seductive but it's dangerous markets are efficient by the time you hear about a hot stock chances are its future is already priced in plus for every Tesla there are 50 companies that crash and burn collins advice don't try to outguess the market own the whole thing let the winners pull your portfolio up and let the losers quietly fall away in the background with VTSAX you win by not trying to win a common question is should I invest in just one fund and Collins answers with confidence yes one fund is enough vtsax covers every sector every company type and every size you don't need to pick and choose you just need to show up contribute regularly and trust the process that's the beauty of index investing it's simple but not simplistic it's elegant powerful and proven so let's get real are you currently investing in index funds or are you holding on to expensive mutual funds employer selected plans with hidden fees or even worse sitting on cash that's losing value to inflation here's your challenge for today do you know your funds fees what are you really paying and what is it costing you in the long run most people have no idea it's time to find out check your 401k your IRA your brokerage account look at the expense ratio of your investments if it's above 0.2% it's time to rethink take action open a Vanguard account choose VTSAX or its ETF equivalent VTI set up automatic contributions you don't need to be perfect you just need to be consistent and if you're outside the US find a broad lowcost index fund that tracks your local or global market the principle is the same simplicity low fees wide exposure there's one more thing to remember investing isn't about maximizing returns it's about buying your freedom index funds aren't sexy but they're incredibly effective they give you time back peace of mind they remove the stress and complexity that derail so many investors they allow you to focus on what matters most living your life pursuing your dreams and becoming truly wealthy not just in money but in time and choice jl Collins didn't invent index funds but he might be their most passionate evangelist why because they work they've worked for decades they've worked through wars crashes recessions and bubbles and they'll continue to work as long as businesses grow and economies evolve that's the bet and it's a good one so trust the path keep it simple let the magic of index funds carry you forward and when you look back years from now you'll be amazed at how such a humble strategy could deliver such extraordinary results the magic isn't in complexity it's in clarity in consistency in choosing the right vehicle and staying the course that's the real power of index funds section seven why most financial adviserss are not on your side let's get brutally honest for a moment when you think of a financial advisor what comes to mind a trusted expert a guide to your future a partner in building your dreams unfortunately for many people that image is far from reality in the simple path to wealth JL Collins pulls back the curtain on an uncomfortable truth most financial advisers are not working in your best interest instead many are glorified salespeople trained not to help you grow your wealth but to grow their own that's the core idea of this chapter most financial adviserss are not fiduciaries that word fiduciary matters more than you might think a fiduciary is legally required to put your interests first above their own sounds like a no-brainer right you'd assume anyone managing your life savings would have that obligation but here's the shocker most financial adviserss are not fiduciaries they operate under what's called a suitability standard which only requires that the products they recommend are suitable not best that loophole opens the door to all kinds of abuse what does that mean in practice it means advisers can and often do push high fee mutual funds insurance-based investment products like annuities and commissionheavy portfolios even when better cheaper alternatives exist why because they earn more money that way and the worst part it's perfectly legal under current regulations let's say an adviser has two funds to offer you one is a lowcost index fund like VTSAX with an expense ratio of 0.04% the other is a managed fund that charges 1.5% annually and pays the adviser a nice fat commission if both funds are suitable for your needs there's nothing stopping that advisor from putting you in the expensive one even though it will cost you tens of thousands of dollars over time and most people will never know because these fees they're often hidden buried in fine print subtracted from your returns so silently you don't even feel the pain until it's too late here's the painful truth jl Collins lays out fees are the enemy of compounding it's not just the fee itself it's the lost growth on that money over time let's break it down suppose you invest $100,000 in a fund that earns 7% per year for 30 years with no fees you'll end up with about $761,000 now add a 1% annual fee that drops your total to $574,000 a difference of nearly $187,000 all because of one seemingly tiny percentage point that's the hidden tax of poor advice and it gets worse many advisers also churn your account buying and selling frequently to generate commissions they might encourage you to rebalance too often switch to trendier funds or diversify into complex financial products you don't understand and they don't fully explain this is not strategy it's sales disguised as service and you're the one paying for it but it doesn't have to be this way collins offers a simple liberating truth you are smart enough to manage your own money you don't need an adviser to pick stocks time the market or create complicated charts what you need is a system simple lowcost proven and the discipline to stick with it that's what the simple path to wealth is all about collins argues that a basic portfolio like 100% in a total stock market index fund beats 90% of what most advisers will give you no complexity no commissions just steady long-term growth now to be fair not all financial advisors are bad there are excellent ones out there but they are rare and you need to know how to find them step one only work with fiduciaries ask them directly are you a fiduciary are you legally obligated to act in my best interest 100% of the time if the answer is anything less than an enthusiastic yes walk away step two understand how they're compensated feeonly adviserss who charge a flat fee or hourly rate are generally more trustworthy than commission-based adviserss avoid anyone who makes money only when you buy what they're selling step three educate yourself you don't need a PhD in finance you just need to understand a few core principles spend less than you earn avoid debt invest in lowcost index funds and stay the course that's it the rest is noise once you internalize that you'll realize you don't need someone else managing your money because you already know what to do you don't need permission to be financially free you need clarity confidence and consistency collins shares the story of people who lost years even decades of compounding growth because they trusted the wrong adviser one man followed his advisor's recommendations for 20 years only to realize he'd paid over $80,000 in fees and underperformed the market by a wide margin another woman had her entire IRA in expensive annuities earning dismal returns while her adviser collected fat commissions these stories aren't rare they're everywhere and they highlight a sobering truth bad financial advice isn't just costly it's devastating so here's your challenge today look at your investments who benefits more you or your adviser what fees are you paying what are the returns compared to a simple index fund are you being sold products or are you being taught principles and most importantly do you understand what's happening with your money or are you blindly trusting someone else to figure it out if you don't like the answers it's time to take back control start learning ask questions read books watch videos trust yourself more than the sales pitch the more you know the fewer mistakes you'll make and the beauty of the simple path is this you don't need to be a financial wizard you just need to not be taken advantage of the financial industry thrives on your confusion it profits from complexity but wealth isn't complicated it's about habits patience and smart choices when you strip away the layers of noise and sales tactics what's left is the truth you can build wealth on your own and you can do it better faster and cheaper than most experts so don't outsource your future to someone who doesn't care as much as you do don't let hidden fees eat your freedom take the wheel steer your own financial journey because once you understand that most financial adviserss are not on your side you gain the power to make sure your money is working for you and no one else section 8 the wealth-b buildinging formula if there's one formula that can transform your life give you peace of mind and lead you to financial freedom it's this save invest wait that's it three steps no Wall Street wizardry no get-richqu schemes just consistent action and the power of time in the simple path to wealth JL Collins calls this the fundamental engine of wealth creation it's simple elegant and foolproof if you stick to it let's start with the first piece of the formula save you cannot build wealth if you don't consistently set aside a portion of what you earn sounds obvious but for most people saving is the hardest part why because we live in a world that encourages consumption at every turn from flashy ads and social media envy to peer pressure and lifestyle creep we're constantly being told that spending equals success but the truth is every dollar you don't spend is a dollar that can start working for your future collins insists that your savings rate is the most important factor in how fast you can achieve financial independence forget how smart your investments are if you're only saving 2% of your income you'll be working forever but if you can save 20% 30% even 50% you dramatically shorten the time it takes to buy your freedom the math is stunning save half your income and you could retire in just 15 to 17 years and you don't need to win the lottery or earn six figures to do it you just need to live below your means and make saving a habit once you're saving the next step is to invest this is where your money starts to multiply collins recommends investing in broad-based lowcost index funds like VTSAX because they give you exposure to the entire market with minimal fees and maximum simplicity the goal isn't to beat the market it's to own the market and let it do the heavy lifting over time this is where the third piece of the formula comes in wait patience is what turns small savings into massive results when you invest consistently over decades compounding begins to work its magic it's like a snowball rolling down a mountain slow at first but eventually unstoppable albert Einstein called compound interest the eighth wonder of the world and he wasn't wrong it's the most powerful wealth-b buildinging force on the planet and all it asks of you is time and discipline let's break it down with a real world example suppose you invest $500 per month in an index fund earning an average of 7% annually after 10 years you'll have around $85,000 after 20 years it's nearly $250,000 and after 30 years over $566,000 that's not magic that's math and the more you invest or the earlier you start the more exponential your growth becomes just imagine what happens if you invest $1,000 a month or $2,000 the numbers get big fast and you didn't have to pick stocks time the market or hire an expensive advisor you just followed the formula save greater than invest greater than wait here's the key you have to stay consistent that means saving automatically every month investing without emotion ignoring the headlines the market crashes the fear-mongering pundits the market will rise it will fall but over the long haul it always trends up don't let short-term panic derail your long-term plan as Collins puts it the market always recovers stay the course one powerful way to stay on track is to automate everything automate your savings so money goes straight from your paycheck to your investment account automate your investments so they buy shares on a regular schedule regardless of what the market's doing this removes the temptation to time the market or wait for the right moment there is no perfect moment the best time to invest was yesterday the second best time is today when you automate you also eliminate decision fatigue you don't have to worry about whether to buy or sell or what the market's doing your plan runs in the background like a financial autopilot and the less you tinker the better off you'll be history shows that investors who do the least who buy and hold tend to earn the most now some people might say that sounds too slow i want to be rich now but here's the thing fast wealth is often fragile wealth lottery winners overnight successes and speculative gamblers often end up broke because they never learned discipline true wealth lasting wealth is built slowly steadily and intentionally it's not about hype it's about habits and this formula gives you the habits that work let's return to the core of the message this is not rocket science you don't need to master complex financial models you just need to make a commitment to save invest and wait that's the simple path and it works across income levels economic cycles and generations it's been tested it's proven and best of all it's in your control one of the most inspiring aspects of this formula is how accessible it is jl Collins originally wrote these lessons in letters to his daughter not to hedge fund managers or finance nerds but to a young adult just starting out he wanted her and by extension all of us to know that wealth is not reserved for the elite it's available to anyone willing to be intentional you don't need a fancy degree you don't need to be perfect you just need to begin so here's your challenge today could you automate 10 to 20% of your income starting today could you set up a system where your money flows effortlessly from your paycheck into investments before you even see it could you commit to sticking with it through the ups and downs for 10 20 30 years because if you do the outcome is virtually guaranteed freedom the ability to work because you want to not because you have to the ability to walk away from stress from debt from scarcity the ability to live life on your terms this is the wealthbuilding formula and it's yours to use section nine market crashes are opportunities not disasters let's get one thing straight right now the market will crash not once not twice but many times during your lifetime and every time it happens headlines will scream financial collapse panic will spread like wildfire and everyone around you will start talking about pulling out their money just until things calm down but if you've read The Simple Path to Wealth by JL Collins you already know market crashes are not disasters they're golden opportunities dressed in scary headlines this is one of the most vital mindset shifts in investing understanding it and applying it can be the dividing line between becoming wealthy or broke because here's the brutal truth most people don't lose money in the stock market because the market fails they lose because they panic and sell they act on fear instead of strategy emotion instead of logic collins drives this point home by reminding us the stock market is a wild ride but over the long term it always goes up it's never a straight line it's more like a roller coaster that ends higher than it started the only people who get hurt are the ones who jump off midride let's take a step back and look at history in 2008 the market plunged the SNP 500 lost over 50% of its value people were terrified retirement accounts were cut in half the media made it sound like the financial world was ending many investors including those close to retirement bailed out they sold everything at the bottom and waited for things to settle but guess what the market recovered in fact it went on to reach record highs in the following years and those who stayed in they not only recovered their losses they grew wealthier than ever that's the secret most people miss market crashes are temporary recovery is inevitable if you zoom out and look at the market over decades it's clear every crash is followed by a rebound not some of them all of them the Great Depression Black Monday the dot bust the Great Recession the COVID crash every single one came with a surge of fear and was followed by a rebound the long-term investor wins every time as long as they don't sell so what does Collins recommend stay the course don't sell don't flinch don't check your account every hour when things get scary the market goes up and down but the trend is always up and if you can stomach the temporary drops you will reap the long-term rewards in fact Collins doesn't just say you should not fear market crashes he says you should celebrate them why because a downturn is the best time to buy prices are low everything is on sale it's like walking into a store where all the best products are 30 to 50% off would you run out of the store in fear of course not you'd buy as much as you could the same logic applies to investing if you're still in your wealthb buildinging phase meaning you're still working saving and buying into the market then a crash is a gift it's the universe offering you more shares for your money and the more shares you own the more wealth you build when the market eventually rebounds but this is easier said than done right when the market drops it's terrifying your account shrinks people are panicking the news is all doom and gloom it's hard to stay calm that's why Collins emphasizes emotional discipline as one of the most important skills any investor can build you have to train yourself now to react rationally then think of it like fire drills we practice them so that when there's a real emergency we don't freak out we act with clarity your fire drill for investing is this decide today how you'll act when the market drops 30% 40% even 50% will you panic and sell or will you stick to your plan trust history and buy more here's something powerful to consider warren Buffett one of the greatest investors of all time has always looked forward to bare markets he calls them a chance to buy when there's blood in the streets why because fear leads to underpricing and buying undervalued assets is the best way to build wealth in that spirit you can choose to see every crash as a gift not a threat collins also reminds us of the illusion of control many people think they can time the market sell before the drop and buy back in at the bottom but that strategy almost never works why because you have to be right twice when to sell and when to buy back in miss one of those and you've hurt yourself far more than if you had just stayed put in contrast the buy and hold investor doesn't try to be clever they just keep investing rain or shine and they come out ahead almost every time let's revisit a real world example from 2008 imagine two investors Sarah and Mark both had $200,000 in retirement accounts when the crash hit Sarah panicked and sold everything mark stayed put in fact he kept investing monthly by 2013 Mark's portfolio had not only recovered it had grown sarah meanwhile sat in cash waiting for the right time to get back in but fear held her back she missed the rebound and her financial future suffered as a result this isn't just about money it's about your future freedom every time you sell in a panic you delay your financial independence every time you let fear win you hand over your power collins wants you to reclaim that power with knowledge discipline and a long-term mindset so how do you prepare practically one build your emotional armor now read books like The Simple Path to Wealth understand the history of the market know that crashes are normal and temporary two automate your investments keep buying on a schedule no matter what the market is doing three turn off the noise avoid financial news and emotional investing forums during downturns stay focused four reframe your thinking say this out loud when the market crashes I will buy more crashes are sales not signals to run five keep a crash journal write down your plan now how you will respond during the next downturn refer to it when emotions rise and here's your challenge for today how will you react next time the market drops 30% will you panic like the crowd or will you smile like a seasoned investor knowing that fortune favors the brave and the disciplined remember the market is a wealth machine but only for those who can stay on the ride especially when it gets rough so buckle up trust the process and know this every crash is just another chapter in your journey to financial freedom section 10 reaching financial independence financial independence or FI is more than just a trending hashtag or a dream for early retirees sipping coffee on a beach it's the heartbeat of the simple path to wealth it's the ultimate goal behind every dollar you save every investment you make every unnecessary expense you choose to forego financial independence means your investments generate enough income to support your lifestyle whether you choose to work or not let that sink in when you achieve FI you no longer work because you have to you work because you want to you can choose projects you love people you enjoy and causes that inspire you or choose to not work at all you reclaim ownership of your time and with it your life jl Collins calls FIFU money on steroids it's not just a 6-month or one-year emergency fund it's permanent freedom it's waking up on a Monday and doing exactly what you want without asking for vacation time or fearing bills at the end of the month it's having control over where you live what you do and who you spend your time with now the path to FI isn't complicated and that's the beauty of this book collins simplifies the journey in a way that feels doable no matter your income level the formula is straightforward spend less than you earn save the difference invest in index funds wait that's it there's no secret club no hedge fund strategy no advanced calculus just a commitment to discipline patience and living intentionally so how do you know when you've actually reached financial independence that's where the 4% rule comes in a game-changing concept derived from the Trinity Study a famous piece of research that examined retirement withdrawals over different time periods the conclusion if you withdraw no more than 4% of your portfolio annually your money is statistically very likely to last at least 30 years often far longer in simpler terms if your annual expenses are $40,000 and your portfolio is $1 million you're financially independent why because 4% of $1 million is $40,000 and you can live off that amount without touching the principle your investments continue to grow even as you withdraw that's the magic of long-term compounding and conservative withdrawals to calculate your own FI number just multiply your annual expenses by 25 since 1 / 0.04 equals 25 if you spend $30,000 per year your FI number is $750,000 if you spend $50,000 per year your FI number is $1.25 million the lower your expenses the lower your FI number that's why frugality is a superpower on this journey every unnecessary expense you cut shaves years off your working life every dollar you save today gets you one step closer to freedom tomorrow let's look at a real world example meet Chris and Jen a married couple in their mid30s they were both earning decent incomes but realized they were trapped in a cycle of spending stress and working just to keep up after discovering Collins's work they made a shift they simplified their lives moved to a smaller home cut unnecessary expenses and committed to saving 50% of their income they invested everything in a total stock market index fund VTSAX and kept their lifestyle lean within 10 years they had accumulated $800,000 their annual expenses $32,000 that's 4% of their portfolio today they're fully financially independent and they both left their full-time jobs in their early 40s they travel volunteer and work on passion projects no bosses no time clocks just freedom that's not a fantasy that's math that's the power of the 4% rule when paired with consistent saving and smart investing but let's address the elephant in the room what if the market crashes what if inflation rises what if 4% is too aggressive collins tackles these fears with wisdom and data first the 4% rule is built with a safety cushion in fact many who follow this guideline end up with more money after 30 years than when they started even after withdrawals second flexibility is key in a downyear you can cut back a bit you can skip a vacation reduce discretionary spending or temporarily withdraw less fi doesn't mean rigid rules it means empowered choices another concern people raise is health care especially in countries without universal coverage collins acknowledges this reality but offers hope with time education and smart planning including health savings accounts and insurance strategies this hurdle can be managed don't let uncertainty stop you from pursuing a better future now reaching F I doesn't mean you have to retire early that's a common misconception the R in fire financial independence retire early is optional what really matters is the FI part once you're financially independent you get to design your life on your terms you might keep working but with joy instead of desperation you might start a business become a consultant teach write travel or dedicate your time to causes you care about fi gives you options and options are the real luxury so how do you apply this practically starting today one calculate your FI number multiply your current annual expenses by 25 that's your target two track your spending know where your money goes each month awareness is power three cut the fluff every recurring subscription luxury car payment and impulse purchase delays your freedom five increase your income side hustles job changes or career moves can supercharge your savings rate five invest consistently automate contributions to index funds like VTSAX or similar six celebrate milestones every $10,000 saved is a brick in the foundation of your future seven surround yourself with support podcasts books online communities stay inspired and accountable one of the most profound insights from Collins is this the path to financial independence isn't about deprivation it's about alignment when your spending reflects your values and not just your impulses you realize you don't need much to be happy you find joy in simplicity power in patience and purpose in progress let's wrap this up with today's challenge what's your FI number write it down own it then ask yourself how close are you what would it take to reach it in 10 years five what if you could cut your timeline in half this isn't just theory this is your life every day you make a choice delay your freedom or accelerate it every dollar has a job to either buy stuff or buy time choose time because at the end of the day financial independence isn't about money it's about freedom control and the power to live life on your terms section 11 the Simple Path for Life at the end of the day The Simple Path to Wealth lives up to its name not just as a book title but as a way of life simplicity isn't just a financial strategy it's a philosophy a compass that keeps you steady when the world tempts you with noise hype and complexity in this final section we tie everything together by recognizing that the path to financial freedom is not a complicated algorithm or secret stockpicking formula it's a clear simple powerful approach spend less than you earn invest the surplus in lowcost index funds avoid debt and let time do the work stay the course and you win it really is that simple but simplicity as JL Collins reminds us doesn't mean easy in fact sticking to a simple plan can often be harder than chasing the latest investment trends because it requires discipline emotional control and trust in a long-term vision especially when the media is screaming about the latest crash or boom complexity is seductive wall Street thrives on it financial experts profit from it but it often leads to bad decisions high fees and unnecessary stress simplicity on the other hand creates clarity it gives you peace of mind consistency and the mental bandwidth to focus on what truly matters in life so let's revisit the essence of this simple path and why it works not just for a season but for life first you've learned that money is just a tool it's not the end goal freedom is with that clarity you can align your financial behavior with your deepest values you're no longer chasing the newest car the biggest house or the trendiest gadgets instead you're building something far more meaningful your independence your peace your legacy then you learned about the dangers of debt and how it robs your future to pay for today's fleeting pleasures you understood that living within your means and ideally below your means is the cornerstone of wealth every dollar saved is a brick in your foundation of freedom every debt avoided is a chain unshackled you also saw the raw power of spending less than you earn it's simple arithmetic but it's also radical in a consumer-driven world this single principle applied consistently puts you ahead of 90% of people it creates a surplus you can then invest your ticket to long-term wealth and that brings us to the mighty stock market not as a casino but as your ally when used correctly the market rewards discipline and patience it's the ultimate tool for turning modest savings into a life-changing fortune if you avoid the trap of speculation and instead embrace the slow steady power of broad-based index funds you don't need to pick winning stocks you just need to own the whole market stay invested and ride the wave of long-term growth you also learned that FU money a cushion of savings isn't just financial security it's emotional security it gives you the power to walk away from toxic situations speak up for yourself take risks and live authentically with enough financial runway you stop living in fear and start living in freedom in later sections we covered the importance of being your own advisor or at least understanding how to spot good ones the sad truth is that many so-called financial experts are salespeople in disguise profiting from your ignorance the solution educate yourself stick to index funds learn the basics the truth is you can manage your own money better than most professionals especially when you keep it simple and low cost then came the power of the formula save invest wait patience is your silent partner time is the secret sauce let compounding do its thing and wealth will come not overnight but inevitably even market crashes which terrify so many investors become opportunities on this path you no longer panic when stocks fall you smile because you're buying at a discount you've trained your mind to see the long-term picture not short-term noise and eventually you reach financial independence not because you won the lottery or struck a lucky deal but because you followed a plan and stayed consistent you understand your FI number you know how to live within it and you've bought your freedom now your time belongs to you and no one else which brings us back to where we started simplicity the simple path doesn't end when you hit your FI number it becomes your way of life even after you make it you don't suddenly start chasing complexity you don't ditch VTSAX for speculative investments you don't inflate your lifestyle just because you can you stay grounded you stay humble you stick to the system that got you there that's exactly what JL Collins has done after decades of following this path he lives a life of freedom peace and purpose he doesn't live lavishly he doesn't need to his wealth provides options not opulence he writes travels and shares this message with the world because he wants others to experience the same liberation and here's the beautiful part this simple path works whether you make $40,000 a year or $400,000 it's not about how much you earn it's about how much you keep and what you do with it that's why this approach has helped everyone from young professionals to teachers mechanics freelancers and retirees it's universal it's timeless and it's life-changing but only if you commit to it so here's your challenge are you ready to commit to the simple path for the next 10 years not as a fad not as a test but as a lifestyle are you ready to reject complexity silence the noise and embrace the boring brilliance of index investing frugal living and long-term thinking because here's the truth 10 years from now you'll either wish you started today or you'll be grateful you did choose gratitude choose freedom choose the simple path for life if you've made it this far you've taken a powerful first step not just toward understanding the simple path to wealth but toward transforming your entire financial future if you found value in this video please like it share it with someone who needs financial freedom and comment below your favorite insight was it the power of FU money the simplicity of index funds or the confidence to ignore the market noise and stay the course whatever it was speak it out loud share it with the community and subscribe if you haven't because your path to wealth doesn't end here this is just the beginning let's walk it together simply consistently and powerfully