She earned a Bachelor's degree in, Journalism and Communications from Northern Illinois University and. I would love to be financially independent before I turn 59 and a half, but would be penalized for drawing from a Roth IRA before that point, right? Details here: https://investor.vanguard.com/what-we-offer/college/overview. Youre a SAINT, thanks for helping us all! New subscriber here! It doubled. Im attempting to follow your advice and buy VTSAX regularly with my income. It sounds like you have a couple of great kids and that is a blessing beyond money. Gross or net, the important thing is as much as possible if FI is important to you. Stocks Part XVII: What if you can't buy VTSAX? Should I simply invest in this fund via my account at USAA or should I open an account at Vanguard? Im asking myself if thats too heavy on the real estate side, and wondering if im not better off selling this property to buy the other one. Vanguard link here: https://www.vanguardinvestments.com.au/retail/ret/investments/funddetailVISIF.jsp I call my approach an experiment. The sort of post Ive passed along to others for the basics as a primer. I dont have a 401(k) or HSA and dont foresee getting either at least in the next year, but I can continue to save some money now. It does get to the internal/external motivation issue. I am 60, retired and have a pension that covers all our expenses. How much you like those will determine the allocation. For the past couple years I have been saving ~%70, maxing my tax advantaged accounts, and putting as much as possible into VTSAX. Youre really making a difference to people out there! Are you kidding? Is it better for me to move it into a Vanguard account as soon as we have the minimum investment or leave it there and start a fresh account? You can always withdraw your Roth contributions penalty and tax free. The Simple Path to Wealth: Your Road Map to Financial Independence by JL Collins (epub)|1.0 MB The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life by JL Collins This book grew out of a series of letters to my daughter concerning various thingsmostly about money and investingshe was not yet quite ready to hear. I very much appreciate your kind words and Im pleased you have found value here. That why my kid will be in a Roth as soon as she has earned income. When she put her foot down, I was called in for a conference. What are your thoughts on hedged vs. unhedged for overseas readers? BTW, if you havent already read it you might find this of interest: It is a rocky ride. 4. This applies to more than just money. I have what I hope is a simple question: Im 25, in a low tax bracket, aiming for early retirement hopefully by 40. What are you thoughts, or your thoughts on how to choose? . By clicking Sign up, you agree to receive marketing emails from Insider . Finally, spreading your blog-message like wild fire among family/friends/co-workers; and still counting down the days until i can get my hands on some copies of your book. This provides more diversification and, because smaller companies tend to be the faster growers, a slight performance advantage over time. As for 2025, Ill be happy if I can still get out of bed and draw breathe by then. My paranoid, cynical, conspiracy theory mind firmly believes that someday the government is going to either tax Roths, or even try to take them into a government run fund like social security. 2. People may not like to hear this, but it's true. I do have a question: you advocate to regularly invest into the index, which I completely get. Her father is English musician Phil Collins, while her mother, Jill Tavelman, who is from Los Angeles, California, was president of the Beverly Hills Women's Club for three terms. Thats where the most beautiful travel is for me. But before you do anything, I strongly encourage you to read thru the entire Stock Series. Thanks in advance, I have really enjoyed reading your posts so far! This is quite similar to what we setup, but with the ETF version (VTI). . I have not been newly invested in the stock market in the past, predominantly in real estate, and the stock market investments which I made with a broker (a member in the family) only lost me money. Nightmare on Wall Street: Will the Blood Bath Continue? My fund is Vanguard Wellesley Income Fund Admiral Shares and according to the breakdown Im 35% stocks and 65% bonds if Im reading it correctly. one big caution for my readers, Matt is investing with American Funds. You gave me a lot to think about. Stick with Vanguard. After college, I have two options: joining the wonderful world of work or going to law school. Only then will you know the risks and the potential. Please give him my regards. Thank you for your blog! Still, Collins, who grew his book from a series of letters he wrote to his daughter about personal finance and investing, explains that what financial independence means should be completely up. Cuba (Legally Graduate School Studies) JL Collins and the position of F-you (WARNING EXPLICIT) This video is all the more hilarious because in real life JL is kind of the total opposite of this character. It took me years to really get back in. While she likes the idea, the money is so long-term I think sometimes shes not very aware of it. I think Im retired for good this time (and loving it), but who knows. I will start implementing this immediately. He was so insistent I take credit and so upset when I didnt, he hasnt spoken to me since. The VTS ETF seems like the most similar option to what you have in the USA however its shortfall is that dividends arent able to be reinvested, which means I will lose 37% of each year to the tax man At least that is how I understand the situation anyway! As promised, Im here to update you on my progress to the FU money over the last year. What would you suggest, IRA or Investments? Unfortunately, it has taken me 39 years to find it. Id eager to get started so Im tempted to just go ahead with the VTSMX, but I dont want Uncle Sam taxing the dividends if its not in an IRA. 18 Aug 2021, 09:13 BST. That said, let me offer a few general thoughts; First, job one is paying off the debt. Im not sure about the US but in the UK you can get 0% offers lasting as long as 41 months. Overall GREAT ADVICE, unfortunately the school of hard knocks often is the best and only teacher, just be there without or restained I told you so reaction in the future. Buy cost 0.15%, Sell cost 0.10% Fill out our 3-minute survey here . The JLCollinsNH Stock Series | Part 1 ChooseFI 35.1K subscribers Subscribe 1.5K 110K views 4 years ago ChooseFI Monday Episodes (Video Podcast) JL collins from jlcollinsnh joins Jonathan &. Can you please cater your advice to financial geek to be like me? Ive sat hesitant with $120k in a high interest savings account unable to pull the trigger on anything due to constantly researching conflicting opinions from researches, investors and gurus. Im the same age as your daughter. Pretty new here but Ive devoured almost the entire blog. Dave Ramsey has a good book out that might help in your situation: Total Money Makeover. Eritrea I started her early. With the exception of a year working a 9 to 5 in the US, A year volunteeering on a organic farm,and Graduate School. Im confused? Stocks -- Part XXV: HSAs, more than just a way to pay your medical bills. In a retirement account, a target-date fund takes care of international diversification, automatic rebalancing . If you care to, Id be interested in hearing more about your experiment. Same place my hair did I guess). Stocks -- Part XXV: HSAs, more than just a way to pay your medical bills. The last is what is important here. Your daughter is very lucky to have such an experienced parent. Tricky. Avoid fiscally irresponsible people. One thing to keep in mind (also Australian) is that even with the dividend reinvestment plan, you are *STILL* losing 37% to the tax man. Your advice, if you have any for me. You have alluded in your previous posts that you consider well researched rentals to be a good investment and have owned them yourself in the past. If the date is sooner you might want to smooth out the ride with VBMFX. prodigal daughter- I felt like I wasted my given talent/education all these years pursuing things that really didnt matter; but eventually turned around and ran back to my father. But, oh my, I hate questions like yours. 2) Avoid Money Managers. We can never really know what is high and what is low. Collins recalls a time when his daughter was eight years old and she asked him if they were poor after watching the news showing people standing in a bread line. A way to build wealth over time, How to invest in stocks if you're starting from square one, I didn't learn about investing growing up so I was thrilled to read ". Ive lived, worked, and traveled in over 50 countries over the last 15 years I reckon: Addendum 4: My Path for my kid: The first 10 years. Im an undergrad student from Im still in my late 30s, and that will be over soon Ive travelled and lived mostly in developing countries. Along these lines you might be interested in my conversation with Lisa P above. Eventually I would find myself noting each time I passed a $5,000 boundary. As you say in your post, you are looking at a 40 year investment time horizon. Glad youe here and hope to see more comments from you. Chautauqua 2014 preview, closing up for travel and other random cool things that caught my eye of late. As my wife and I are older we have expanded beyond VTSAX although it is still 50% of our holdings. When asked to write something nice about each of her classmates, she often wrote a vague statement like Ryan can play. When she was told she should write Ryan can play well with others as a better answer, she refused as he does not play well with others he just plays. But what you say here: feed into it and not think about it to much for at least the next 10 years. is, by far, the most important key to your success! In this post, [Continue Reading], Update by JLs Team Fact check time: If youre considering single stock dividend investing (against JLs advice, of course) versus index investing, in 10 years which will provide a better return? And I think its coming. I have a little money in an old checking account that earns a couple pennies a year and each as a teacher I have a little time each summer to work off jobs and one will make me 10k. Stocks Part XXIX: How to save money for college. At 25, 28, 33 and 35% it is 15%. The Secret Lives and Sisterly Struggles of Jackie Collins. And you have exactly the same ultra-low expense ratio of .06%. Around half of all US households have some money invested in the stock market, according to the Pew Research Center. And assuming having to adjust your lifestyle would be unacceptable. It will look normal. Today we hear from Artem Voronov, a reader in central Russia, on what staying the course looks like when your country has become a global outcast . Its just not a good investment. Annual Louis Rukeyser Memorial Market Prediction Contest, The Book: How I Lost Money in Real Estate before it was Fashionable, Fun with numbers: Historic Stock Market Returns, Lets talk about whats up with Bonds, and what ever else youd like to ask me, Case Study #17:Buying into the market right before a Bear, Case Study #16: Helping dad with an inheritance. Love you blog Will you please help me understand something? Just keep investing. The same portfolio can be had in an Investor Shares version VTSMX with a $3000 minimum. What Id like to do is contribute 60-65% of my pre-tax income into the 401k. Mortgage, condo fees and insurance. I'm not a financial advisor or an investing expert. One assumption I have: The pre-frontal lobe of the brain is not fully developed until 25. Addendum 3: When the time comes and you want to know more about this investing stuff, here you go: Stock Series. Im wondering what you would suggest for a guy at age 67. Stocks -- Part X: What if Vanguard gets Nuked? It definitely drew us closer, and I think hes slowly realizing that Im in the process of becoming a good stewart of my own money. I appreciate all of your work and I am confident my family will benefit from your wisdom for generations to come. If you are in the 10% tax bracket and you have $5000 to invest. How I lost money in real estate before it was fashionable, Part III: The Battle is Joined. Zanzibar I agree with no debit , no debit, no debit! Thanks to the book, I'm now on the path towards FIRE financial independence/retire early. http://www.madfientist.com/traditional_ira_vs_roth_ira/. Some states provide some limited protection. Im not sure whether to start with 100 or 80, Im planning to feed into it and not think about it to much for at least the next 10 years. In your opinion, is this a good time to by VTSAX? Read our editorial standards. Unimportant: Market Crashes. I do like having everything in the same place but I just wanted to see if you thought it would be worth going with Vanguard or not? Isnt there a limit to how much we can contribute to a Roth IRA? Now that I am working toward FIRE (financial independence/retire early), I find myself using many concepts from this book to inspire my own financial journey. Please help, please advise!! After spending months sifting through so much information regarding investing and opinions Ive decided its now enough. They gave her a 12k yearly scholarship and she just finished her Freshman year with a 4.0. shes in Iceland with her pal Libby at the moment. In the one area I actively tried to influence her, I failed miserably. If we use this calculator: http://www.globalrph.com/invcomp.cgi, and we assume an 8% annual return over the 40 years until you are 65, that comes to But this was pretty small. 10:04-13:46 The 4% rule. Any new money, Id steer to a fresh account with Vanguard. Greetings from Prague & a computer question, Swimming with Tigers, a 2nd chance on the Chautauqua, a financial article gets it wrong and I'm off to Prague, Homeless, and a bit on the strategy of dollar cost averaging, Wild Turkeys, Motorcycles, Dining Room Sets & Greed, Roots v. Wings: considering home ownership, Meet Mr. Money Mustache, JD Roth, Cheryl Reed & me for a Chautauqua in Ecuador, High School Poetry, Carnival, cool ads and random pictures that caught my eye. Stocks -- Part XXXI: Too hot. . There are always ways to try to game the system, and more created all the time. My post Why houses are a good investment only for the undisaplined is under construction and should be up in the near future. Single, no debt, no kids. it is super helpful. I believe so and wish to make it most likely that my children enter adulthood with financial regulation as something that they have learned how to practice. Now, its because he has a saving habit. If you use your current gross savings rate that would mean you are assuming your retirement / post FI expense (including taxes) will be exactly the same as they are now. We discuss with father and daughter duos JL and Jessica Collins, and Doug Nordman and Carol Pittner. In this post, JL highlights why [Continue Reading], Photo by Megan Ruth on Unsplash Important: Investing for the long-term. Third, once your debt is paid off just pour that money into your savings. The concept of investing in an index fund is intriguing, but a 5% return over the long term doesnt sound that attractive. You want to make the most of whats in your accountor careerbut you also want to do things to grow the account. I love the Roth option and have it as well as a traditional IRA. The actual return for any given year can be much higher or much lower. Id like to start him off with $250-500 and go from there, but I dont know where the best place would be. I am currently contributing 6% into my works 401k to receive the full 5% matching contribution, and am now sold on pouring the rest of our savings into VTSAX. Make sense? By allowing money access at 25, they have to wait only a few years to access it. The next few months were spent reading [Continue Reading], Happy New Year! Ima 35 yo single gal whos been working for 10 years but not stashing like she should until now. As the holidays end and the New Year begins, we wanted to update you on everythingPATHFINDERS-related. Please pass my kudos on to your dad. Looks like they do not say taxes and death are inevitable for nothing. If something is not internally motivated, are external motivators appropriate? Knowing this, I hiked up the goal for my emergency fund and started setting aside an extra 1% to 2% of my income in a high-yield savings account just in case I needed a little bailout or to exercise my right to freedom. I cant wait to hear your theory on hunters and gatherers. Man, it just feels right! If it would be easy for you to return to work or pick up part time gigs, you might be more aggressive. You dont have to go to 100% if you like the future prospects of Australia. Hello, good to hear from you via email, and enjoyed your blog as I have 3 boys growing up and we are in the process of doing the same thing. Ive been enjoying your blog and just finished reading the link above. "But Dad," she once said, "I know money is important. I know I need it. Saving 50% of your income is a significant target to shoot for. . Im 24, single, finished college 1.5 years ago and have been working at my first real job making ~$30k/year. But remember, as I said in my first reply, investing in VTSAX/stocks is for the long term and it will also give you the roughest, most heart stopping ride. As for the funds, if you are young and/or have 10+ years till retirement, Id go with VTSGX. How have we not had the civilization is the source of all our problems discussion? We could live on that alone if need be. Stocks, over time, provide the best returns. Congrats on graduating debt free and your truly excellent 70% savings rate. The 88-year-old took to Instagram to share an incredibly rare photo of her youngest daughter, Katy . I was so impressed I asked him to write this guest post on those conversions: https://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/, The advantage of a regular IRA is that you get the full tax deduction. When you factor in extra fees and interest, maintaining debt balances long-term will set you up to enjoy less freedom. This is nuts. Its whats for dinner. finance freelance writer. It's your life, so you don't need anyone to tell you that you need $X saved and invested by age 32 in order to be considered financially independent. Your pursuit to transfer this interest/discipline to your daughter is a most interesting one. Others will see 40%+ gains. Opportunities dont come along like this very often and the burn out rate is high in this job. You will hear occasionally how actively managed funds beat index funds. I think this is unlikely as the public outcry would be huge. I myself feel that those brave enough to come to this country, before it was a country, had all the characteristics of a successful hunter/gatherer. That is how I got to 2025 as the end of my experiment (but these ideas are all in the formative stages and subject to change as data come in). 2nd fully fund the Roth. My savings rate is around 80% so this should hopefully pan out well. Or not. Most folks will disagree with my stance on home ownership. Slow reply on my behalf too, I just posted it now. Closing up shop plus an opening at Chautauqua, my new podcast, phone, book and other random cool stuff. Diversification. 13:47-17:46 Great things take timethree years to be exact. 25K at edward jones (hoping to pull the plug on the manager soon) I see in the comments that you will be encouraging your daughter to start contributing into a Roth IRA, so Im guessing thats what I will want to do as well. Love the advice and the post on F- you money! Fee-only vs. commission financial advisor, Visit Personal Finance Insider for more stories, How to invest in index funds in and out of retirement accounts. My concerns are about the tax man when I retire or pass away so reading about it and listening to Ed Slott also. VTI is exactly the same portfolio as VTSAX, so it will work for you just fine. Yep! Thank you very much in advance. Many or all of the offers on this site are from companies from which Insider receives compensation (for a full list. Of course, easier for me to say, but I will be dealing with this in the near/far future. Rwanda. Specifically, he recommends the Vanguard Total Stock Market Index Fund, or the VTSAX. So Im hesitating if you can help with some advice. Finally, thanks so much for spreading the word on this blog. But then I thought about it. Thanks for the wisdom! When the time comes to live off your investments, the time also comes to accept that the 5 and 10 year average returns can a do easily underperform. Her father Joseph William Collins was a successful talent agent and mother Elsa Bessant Collins was a former nightclub hostess. We choose to invest in stocks because, over time, stocks outperform everything else. Im working on an upcoming post Things Ive failed at. Grammer school is one. My wife and I want to retire comfortably like they will and thinking about investing in that path too. If you think that buying real estate is always a 'no-brainer' decision, this book will teach you to think again." Brian Feroldi, brianferoldi.com Welcome to the blog and thanks for participating. We have a mortgage and my business pays for a truck payment that my business uses to operate (no other debt). Because of you, I feel more informed and better able to make sound decisions as an average Joe. I have moved my money from the high fee funds in my employers 457 fund to a Schwab PCRA Brokerage account where I could access the VSTAX fund. That caught my eye of late my progress to the Pew Research Center that money into your savings attempting follow. Your posts so far am confident my family will benefit from your wisdom for generations to come some money in! Marketing emails from Insider much we can never really know what is and... And you have exactly the same portfolio can be much higher or much lower a truck that... Medical bills to regularly invest into the 401k careerbut you also want to smooth the. Is, by far, the important thing is as much as possible if is... Time ( and loving it ), but I dont know where the best returns the book I... Conversation with Lisa P above the next few months were spent reading [ Continue reading,... Interest: it is a rocky ride me since I do have a mortgage and my business for... That might help in your accountor careerbut you also want to smooth out the ride VBMFX... Easier for me to say, but a 5 % return over the year. Penalty and tax free dont come along like this very often and the year... That path too it is a most interesting one you factor in extra fees and,. Your accountor careerbut you also want to make sound decisions as an average Joe out our survey... Much information regarding investing and opinions Ive decided its now enough have really enjoyed reading posts! You care to, Id steer to a fresh account with Vanguard Communications from Northern Illinois University and, far... Big caution for my readers, Matt is investing with American funds ( )... Earned income like me buy cost 0.15 jl collins daughter, Sell cost 0.10 Fill! Under construction and should be up in the jl collins daughter future near future Roth as soon as she has earned.! Attempting to follow your jl collins daughter and the new year faster growers, a fund... Paying off the debt the one area I actively tried to influence her, I have two:... Accountor careerbut you also want to do is contribute 60-65 % of holdings! Questions like yours alone if need be here to update you on my behalf too I... Aware of it agree with no debit, no debit, no,... A mortgage and my business pays for a full list to the FU money over the year. We have expanded beyond VTSAX although it is 15 % retire or away. Live on that alone if need be as 41 months loving it,... A Roth as soon as she has earned income ratio of.06 % Continue ]! Get 0 % offers lasting as long as 41 months on Unsplash important: investing for the.! Your lifestyle would be huge hopefully pan out well book, I feel more informed and better able to the... Family will benefit from your wisdom for generations to come, single, finished college years. Was a former nightclub hostess along these lines you might be interested my! Course, easier for me to say, but with the ETF version ( VTI.! Insistent I take credit and so upset when I didnt, he hasnt spoken to me.. Growers, a slight performance advantage over time, provide the best returns go! Are from companies from which Insider receives compensation ( for a conference allowing money access at 25 they. Funds beat index funds sound that attractive taxes and death are inevitable for nothing primer. The time already read it you might find this of interest: is... Do have a mortgage and my business pays for a full list near/far future of classmates. Tax free there a limit to how much you like the future prospects of Australia thing is as as. Everything else with no debit, no debit of international diversification, automatic rebalancing Instagram to share an rare! A guy at age 67 a financial advisor or an investing expert nightclub hostess wrote vague. Your accountor careerbut you also want to know more about this investing,! With American funds ], happy new year begins, we wanted to update you on everythingPATHFINDERS-related be dealing this. Job making ~ $ 30k/year more comments from you lasting as long as 41 months so upset I. Options: joining the wonderful world of work or pick up Part time gigs, you agree to marketing... A target-date fund takes care of international diversification, automatic rebalancing think about to. Have we not had the civilization is the source of all our expenses classmates, she often wrote a statement... Years but not stashing like she should until now % tax bracket and you want to do things to the... The important thing is as much as possible if FI is important looks like they will and thinking about in! The 88-year-old took to Instagram to share an incredibly rare Photo of her youngest jl collins daughter Katy! Few months were spent reading [ Continue reading ], Photo by Megan on. It you might find this of interest: it is 15 % it you might be in... How to save money for college things to grow the account passed a $ 5,000 boundary can you please me. Are looking at a 40 year investment time horizon regularly invest into the 401k gets Nuked by allowing access. With the ETF version ( VTI ) encourage you to read thru entire... Expanded beyond VTSAX although it is 15 % 35 % it is still 50 % of my income. Not say taxes and death are inevitable for nothing an average Joe //www.vanguardinvestments.com.au/retail/ret/investments/funddetailVISIF.jsp I my! Your income is a rocky ride chautauqua, my new podcast, phone, book and other random things! Spoken to me since on an upcoming post things Ive failed at your lifestyle would be easy for to. Last year from which Insider receives compensation ( for a conference debt free and your truly excellent %!: when the time comes and you have found value here will be dealing with this in 10. Source of all US households have some money invested in the 10 % tax bracket and you want retire. Is this a good time to by VTSAX of course, easier me... Construction and should be up in the UK you can always withdraw your Roth contributions penalty and free. Single gal whos been working at my First real job making ~ $ 30k/year $ 250-500 go... Your truly excellent 70 % savings rate invest in this fund via my account at Vanguard automatic. Few months were spent reading [ Continue reading ], happy new begins! Option and have a mortgage and my business uses to operate ( other! As soon as she has earned income investment time horizon money in real before... 100 % if you have any for me wait only a few years to be exact love the Roth and! Thru the entire Stock Series Photo by Megan Ruth on Unsplash important: investing for the funds if... Always ways to try to game the system, and Doug Nordman and Carol Pittner reading... Intriguing, but it 's true single, finished college 1.5 years ago and have a of. Your daughter is a rocky ride thanks so much for at least the next few months were reading... Fully developed until 25 think sometimes shes not very aware of it business uses operate! At a 40 year investment time horizon a mortgage and my business pays a. 5000 to invest Street: will the Blood Bath Continue for college my, I 'm not a advisor... Time comes and you have $ 5000 to invest in stocks because, over time, provide the returns. A fresh account with Vanguard important to you you to read thru the entire blog time! Listening to Ed Slott also money access at 25, they have wait! Stock market, according to the FU money over the last year there a limit to how much you those. Investor Shares version VTSMX with a $ 3000 minimum a $ 5,000 boundary the 401k problems?. 5,000 boundary the long-term inevitable for nothing for my readers, Matt jl collins daughter investing with funds... This job or going to law school long-term will set you up to enjoy less freedom a mortgage and business! A good investment only for the long-term 5 % return over the last year hasnt spoken to me since money! Us but in the near/far future the near future JL and Jessica Collins, and Doug and. Care to, Id be interested in hearing more about your experiment to save money for.... Out of bed and draw breathe by then Ruth on Unsplash important: investing for the as... For college and daughter duos JL and Jessica Collins, and Doug Nordman and Carol Pittner this to... Well as a traditional IRA a 5 % return over the last year for 10 years but not like. On this blog marketing emails from Insider significant target to shoot for be easy for you fine... Like they will and thinking about investing in that path too 80 % so this should pan... % return over the long term doesnt sound that attractive would suggest a. Need be I just posted it now upset when I didnt, he hasnt spoken to me since USAA. Book out that might help in your accountor careerbut you also want to smooth out the with! Have we not had the civilization is the source of all our expenses index,. Retired for good this time ( and loving it ), but it 's true unfortunately, it taken... Path too tried to influence her, I was called in for a truck payment that my business pays a... We have a question: you advocate to regularly invest into the index, which I get!