J.L. Collins > Quotes

“Taking on a mortgage to buy a house is the classic definition of “good debt.” But don’t be so sure. The easy availability of mortgage loans tempts far too many into buying houses they don’t need or that are far more expensive than prudent. Shamefully, this overspending is often encouraged by real estate agents and mortgage brokers. If your goal is financial independence, it is also to hold as little debt as possible. This means you’ll seek the least house to meet your needs rather than the most house you can technically afford. Remember, the more house you buy, the greater its cost. Not just in higher mortgage payments, but also in higher real estate taxes, insurance, utilities, maintenance and repairs, landscaping, remodeling, furnishing, and opportunity costs on all the money tied up as you build equity. To name a few. More house also means more stuff to maintain and fill it. The more and greater things you allow in your life, the more of your time, money, and life energy they demand. Houses are an expensive indulgence, not an investment. That’s OK if and when the time for such an indulgence comes. I’ve owned them myself. But don’t let yourself be blinded by the idea that owning one is necessary, always financially sound, and automatically justifies taking on this “good debt.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Owning 100% stocks like this is considered a very aggressive investment allocation. It is aggressive, and in this wealth accumulation phase, you should be.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“if you are willing to do a bit more work, you could slightly smooth out the wild ride and possibly outperform over time by adding 10%–25% in bonds. If you do, about once a year, you will want to rebalance your funds to maintain your chosen allocation. You might also want to rebalance any time the market makes a major move (20%+) up or down. This means you will sell shares in whichever asset class has performed better and buy shares in the one that has lagged.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Study after study shows that a portfolio of 100% stocks—which is what VTSAX gives you—provides the greatest return over time. However, if you are not tough enough to stay the course or if you get scared and bail when the storms are raging, you are going to drown. But that’s a psychological failure, not a downside of this asset class. As an aside, there are studies that indicate holding a 10%–25% position in bonds with 75%–90% stocks will actually very slightly outperform a position holding 100% stocks. It is also slightly less volatile. If you want to go that route and take on the slightly more complicated process of periodically rebalancing to maintain the allocation, you’ll get no argument from me.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Spend less than you earn—invest the surplus—avoid debt”
― JL Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Stop thinking about what your money can buy. Start thinking about what your money can earn. And then think about what the money it earns can earn. Once you begin to do this, you’ll start to see that when you spend money, not only is that money gone forever; the money it might have earned is gone as well. And so on.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Owning 100% stocks like this is considered a very aggressive investment allocation. It is aggressive, and in this wealth accumulation phase, you should be. You have decades ahead, and you’ll be adding new money as you go. Market ups and downs don’t matter because you’ll avoid panic and stay the course. If anything, you recognize drops as the “stocks-on-sale” buying opportunities they are. Perhaps forty years from now (or whenever you are living on your portfolio), you might want to add a bond index fund to smooth the ride. Worry about that then.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“A little humility goes a long way in saving your ass and your cash.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Put all your eggs in one basket and forget about it. The great irony of investing is that the more you watch and fiddle with your holdings, the less well you are likely to do. Fill your basket, add as much as you can along the way, and ignore it the rest of the time. You’ll likely wake up rich. Here’s the basket: VTSAX.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“The three tools Once you’ve sorted through your three considerations, you are ready to build your portfolio, and you’ll need only these three tools to do it. See, I promised this would be simple! 1. Stocks: VTSAX (Vanguard Total Stock Market Index Fund). Stocks provide the best returns over time and serve as our inflation hedge. This is our core wealth-building tool. (See Chapter 17 for variants of this same fund.) 2. Bonds: VBTLX (Vanguard Total Bond Market Index Fund). Bonds provide income, tend to smooth out the rough ride of stocks, and serve as our deflation hedge. 3. Cash: Cash is good to have around to cover routine expenses and to meet emergencies. Cash is also king during times of deflation. The more prices drop, the more your cash can buy. But when prices rise (inflation), its value steadily erodes. In these days of low interest rates, idle cash doesn’t have much earning potential. I suggest you keep as little as possible on hand, consistent with your needs and comfort level. Typically, money market funds pay slightly more than bank savings accounts, but not always. And while money markets are considered to be extremely safe, they don’t offer the FDIC insurance (up to $250,000) found with bank accounts. At various times, we’ve kept our cash in our local bank or in our online bank. But normally, I slightly prefer the money market option, and at the moment here in 2025, ours is in Vanguard’s VMRXX (Vanguard Cash Reserves Federal Money Market Fund). So that’s it. Three simple tools. Two index mutual funds and a money market and/or bank account. A wealth-builder, an inflation hedge, a deflation hedge, and cash for daily needs and emergencies. As promised, the combination is low cost, effective, diversified, and simple. You can fine-tune your allocation in each investment to meet your own personal considerations. Want a smoother ride? Willing to accept a lower long-term return and slower wealth accumulation? Just increase the percentage in VBTLX and/or cash. Want maximum growth potential? Hold more in VTSAX. In the coming chapters, we’ll talk about index funds and bonds. Then we’ll explore a couple of specific strategies and portfolios to get you started and take a look at how to select the asset allocation best suited to your needs and temperament.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“One of my very few regrets is that I spent far too much time worrying about how things might work out. It’s a huge waste, but it is a bit hardwired into me. Don’t do it.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Stop thinking about what your money can buy. Start thinking about what your money can earn. And then think about what the money it earns can earn.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“this is The Simple Path to Wealth I created for my then-teenager: Put all your eggs into one large and diverse basket, add more whenever you can, and forget about it. The more you add, the faster you’ll get there. Job done.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“If you reach for a star, you might not get one. But you won’t come up with a hand full of mud either.” — Leo Burnett”
― JL Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“There is no risk-free investment. Once you begin to accumulate wealth, risk is a fact of life. You can’t avoid it; you only get to choose what kind.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“One of my very few regrets is that I spent far too much time worrying about how things might work out. It’s a huge waste, but it is a bit hardwired into me. Don’t do it. The older I get, the more I hold each day precious. I’ve become steadily more relentless in purging from my life things, activities, and people that no longer add value while seeking out and adding those that do.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“If it looks too good to be true, it is. There is no free lunch. Not ever. Your mama taught you this. She was right. Listen to your mama.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“There are three key principles that have persisted from those letters, through the blog, and now in both editions of this book: 1. Spend less than you earn. 2. Invest the surplus. 3. Avoid debt.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“There are many things money can buy, but the most valuable of all is freedom—freedom to do what you want and to work for whom you respect.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“When”
― JL Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life

“Three things saved us: 1. Our unwavering 50% savings rate. 2. Avoiding debt. We’ve never even had a car payment. 3. Finally embracing the indexing lessons Jack Bogle—the founder of the Vanguard Group and the inventor of index funds—perfected decades ago.”
― J.L. Collins, The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life