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The Simple Path to Wealth
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Learn the key ideas of the book by JL Collins

The Simple Path to Wealth

The road to achieve financial freedom

Money can buy many things, the most important of which is financial freedom, which makes people free to choose whether they want to travel, take a break to study, or dedicate their lives to raising a child. This is why it is essential to build your own F-you Money, that is "money for freedom", following a path that is made easy by the lessons learned and compiled in The Simple Path to Wealth: Your road map to financial independence and a rich, free life. The method is essentially based on three rules: spend less than you earn, invest, and avoid debt.

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The Simple Path to Wealth
Read in 10 min.
Listen in 12 min.
IDEA CHIAVE 1/8

The aim of financial independence shouldn’t be for your pension, but for your freedom, the freedom to choose in any given moment of your life

Money can buy many things, none of which are more important than one's financial independence. Such independence can offer the freedom to travel, but also to take a break and spend time raising a child, for example, and being able to let go of the need for a fixed salary.

To be able to earn your financial freedom and build your own "F-you Money", that is the money for freedom, there are three basic rules, summarised in this sentence: spend less than you earn, invest the surplus, avoid debt.

Debt is promoted and accepted as a perfectly normal part of life, but it is actually the first major obstacle to building wealth. In America, the total debt fluctuates around 12 trillion dollars: 8 trillion in home loans, 1 in student loans, and as many as 3 in miscellaneous consumption charged to debit cards.

Save 50% of what you earn, don't get into debt, don't commit to any instalment payments and "make your money work" by applying the lessons on indexing that Jack Bogle, founder of The Vanguard Group and inventor of index funds, perfected 40 years ago.

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The key ideas of "The Simple Path to Wealth"

01.
The aim of financial independence shouldn’t be for your pension, but for your freedom, the freedom to choose in any given moment of your life
02.
The first step is to pay your debts. The things you need to do are very straightforward, but they are not easy: they require the will to drastically change your lifestyle and how you approach spending, and they require absolute discipline
03.
Money should “work” (earn) to improve the quality of life of its owners. One of the simplest tools to make this happen is an investment fund such as Vanguard
04.
Warren Buffet is known among all investors, big and small, for his catchphrase: “there are only two rules. Rule number one: never lose money. Rule number two: never forget rule number one.”
05.
Making your money work for you is easy: you need to put your eggs in the right basket and leave them there
06.
Managing other people's money can be a very lucrative job. It exists because people are afraid of finance, but investment advisors don't always achieve the best results, and they don't always try to do so
07.
Quotes
08.
Take-home message
 
 
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