Getting on the Simple Path to Wealth, with Jim Collins | Afford Anything Podcast (Episode #31)
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- Опубликовано: 20 сен 2024
- Jim Collins, also known as popular blogger JLCollins, has been financially independent since 1989.
He achieved this in the simplest way possible: he saved half of his income and invested in index funds. That's it.
Jim says that if your goal is to build financial freedom, the simplest possible approach is the best.
"The great irony of investing is the simpler of an approach you use, the more powerful of results you get," he tells us during this in-depth interview.
In this episode, Jim shares the details of his ultra-simple investing approach. He says that when you prioritize simplicity above all else, you can ignore your investments and move on with your life:
"Most people don't want to think about this stuff all the time. Most people want to get on with curing diseases and building bridges and writing peace treaties," he says. "But the smart ones know they have to have some kind of handle on their money."
Learn Jim's ultra-simple path to wealth in this week's episode.
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to recap for myself (I hope it helps others)
For ultimate financial Independence Jim says : avoid debt first, minimise your expenditure next (spend less than you make), and invest more with that spare cash (it pays in long term).
Jim advocates his fund picks as VTSMX & VBMFX... because he lives in USA so US stock & bond market related index funds. Anyone outside USA could pick same as Jim or find alternatives local to them eg VGTSX & VTIBX for international stock & bond market related index funds. These funds tick the Portfolio criteria even though they are one fund they are inherently a mix of caps, diversified, balanced (a dynamic list of top 3600 companies managed by Vanguard), transparent & economical for costs.
One's financial life falls into two phases
-first Wealth Accumulation (WA)
-second Wealth Conservation (WC)
During WA, 90% of your investing focus to (risk managed) higher volatility (stock) markets which generate wealth growth over long term >10years (via passive index funds eg a TOTAL STOCK MARKET fund such as VANGUARD VTSMX).
During WC, switch 90% of your investing focus to (risk managed) lower volatility (bond) markets which protect (conserve) wealth from down turn. Bond markets offer a default long term stability regardless if other markets thrive or crash (via passive index funds eg TOTAL BOND MARKET funds such as VANGUARD VBMFX).
Investing wisdom requires investment portfolio to be managed for all risks to be safe regardless of whether one or more economies are thriving/crashing
Portfolio risk management criteria includes
- HAVE A MIX OF CAPS : Small (higher risk higher return) vs mid caps vs large caps (lower risk lower returns). Portfolio then can benefit from higher returns or small caps, or stability of larger caps.
- BE DIVERSIFIED : Portfolio avoid risks from holding one fund (avoid " all eggs in one basket")
- BE BALANCED / UNCORRELATED : Portfolio avoid risks from holding mutiple funds all correlated / (find uncorrellated funds so if one funds downturn does not turn into all funds down turn)
- TRANSPARENCY : Portfolio has to be based upon honest legal reporting so reliable for investor assessment. While USA are transparent & legal, Some international funds aren't? (Africa?)
- FEES : Portfolio has to have minimal costs for Performance expected. Remember your profit is performance (%) less any costs (%)... look for low EXPENSE RATIO for funds used.
Thanks mate, very good recap.
This is a beautiful summary and I appreciate you for taking the time to write it. Well done.
Jim is such an amazing guy. I interviewed him last week. His message is always consistent!
Jim Collins is a very wise man.
I really enjoyed this one. A great reminder that the path to wealth need not be complicated.
One of the best financial podcasts on RUclips
Thank you so much!
Jim Collins is so smooth ;)
What a nice voice Jim has
I know im randomly asking but does anyone know of a tool to get back into an Instagram account?
I was stupid lost the password. I appreciate any help you can give me!
@Lyle Michael instablaster :)
@London Keith thanks so much for your reply. I found the site on google and im in the hacking process now.
I see it takes quite some time so I will reply here later when my account password hopefully is recovered.
@London Keith it worked and I finally got access to my account again. I'm so happy!
Thank you so much, you saved my account :D
@Lyle Michael No problem =)
Wow Paula, this podcast was amazing. Thanks for creating it and uploading on RUclips. Less is rightly more. ❤️ Much love, Niharika Rajnala
Live below your means, minimize debt, invest in lowest cost index mutual funds automatically until retirement. That's a get rich slowly plan B, but you need to find way to create cash flow so you can enough your life.
I couldn't agree more.
Many people are trying to live from investments when young, but they need to realize they need with first work.
I like how Jim compared a food buffet to stock market investing - you just need the basics ( cash, bonds and Stocks) well put Jim!
No. If you have a mortgage at 6% and pay it off early over time; the yield is above 6% because the base/regular payment allocation to principal increases as the principal is reduced. 8% risky return vs 6% "risk free"? Pay off the debt... Paula also not considering the sleep easy feeling of being debt free... the value of that - priceless!
The government doesn't tax your house?
@@bjjfreak8261 lol, exactly
Lower debt = lower risk
Also the investment return of 6% is taxable so you’ll need to get much more to get 6% post tax
Great episode, but would be better to hear if the volume was equalized. Your voice and tone are much sharper than that of Jim.
Great advice. I personally like to hold some bonds even in the accumulation phase. John Bogle drilled that into my head and at 52 it's hard to go all in on stocks, but that would probably give me more money in the long run.
That's the point Jim was making.
Love that guy
Great questions!
I need advice. I am saving for retirement already but I also want to save to buy a house. I just want a nice modest house, nothing fancy. Should I open a second account for shorter term or should I just dump all of my money into my retirement and keep money in a savings account?
Remarkably, no mention of the manufactured stock market returns since 2009, via the zero interest rate environment, courtesy of the Federal Reserve. That policy forced savers into the stock market as the only game in town for ROI. While Collins, me, "Your Money or Your Life", etc. pre-date the entire Fi/FIRE community post-Great Recession, his voice is a loud one that could provide a more realistic baseline for those who don't know any better.
Are you pissed that you missed the boat? Lol
End The Fed TRUTH
GOLD!
TO FLORENTINO S. SUSALO III. THANKYOU FOR SACRIFICING YOURSELF IN THE CALL-CENTER ❤️ I WENT TO NATIONAL BOOKSTORE ZAMBOANGA CITY AND KCC CINEMA ZAMBOANGA CITY. THE PROTAGONIST ROLES ARE IMPORTANT ❤️❤️♥️♥️❤️
Shit, I really thought it was Jim Collins the great guy
I KNOW JIM COLLINS BEFORE FLORENTINO S. SUSALO III COURTED ME IN ZAMBOANGA CITY MEDICAL CENTER HOSPITAL BACK IN 2012. I HAVE EMPHATHY FOR THE LESS FORTUNATE ♥️
DATE: FEBRUARY 14, 2022. TIME: 2:49PM. ALMIGHTY GOD, THANK YOU FOR YOUR EVERLASTING SINCERE LOVE ♥️♥️♥️♥️ WHILE I WAS WORKING AND STUDYING HARD ♥️ I KNOW PAO LOPEZ MADE THE CAKES SINCERELY. FLORENTINO S. SUSALO III SACRIFICE HIMSELF IN THE CALL-CENTER 🙏🙏🙏🙏🙏
Paula's voice is damn annoying, like nails on the board. Good info though.
Lol i can't listen to her
Hard eye roll
TO PAO LOPEZ ♥️ GRACIA PAO FOR HELPING A LESS FORTUNATE. FLORENTINO S. SUSALO III. ME AND PAO-PAO ARE BOTH AWARE THAT FLORENTINO S. SUSALO III IS A LESS FORTUNATE ❤️ ME AND PAO-PAO LOPEZ ARE BOTH SINCERE ♥️ DATE: FEBRUARY 14, 2022. TIME: 2:47PM. GOD IS GOOD ALL THE TIME 🙏🙏🙏🙏🙏🙏