The Simple Path to Wealth

Your roadmap to a rich, free life — in just five minutes per week.

January 6, 2026

“I am much inclined to live from my rucksack and let my trousers fray as they like.”

—Herman Hesse

It's a new year, a time to take stock and (perhaps) chart a new course for your life.

That makes it as good a time as any to zero in on a core principle of The Simple Path: Financial freedom is something you can choose to pursue no matter how old you are, but it's a choice you have to make.

THE SIMPLE NUMBERS

In the new edition of The Simple Path to Wealth, JL Collins runs through a path to financial freedom on a $50,000 annual salary.

"You'd want to organize your life in such a fashion as to live on $25,000 annually," he writes. "Two important things would immediately happen. You’d have reduced your needs and created a source of cash with which to invest."

Then the calculator comes out. With your new spending regime, if you're planning to live on 4% of your net worth each year in retirement, you'd need $625,000.

If you choose Vanguard's Total Stock Market Index Fund (VTSAX) to power your journey, and we assume the market will continue its 12.2% annual return over the last half-century, you'd clear your goal and hit $674,402 after 11 years.

If we get more conservative with our assumptions and say the market will only return 8% annually, you'll hit $648,364 after 13 years.

"Not too shabby," JL says.

SIMPLE PATH OF THE DAY

A slice of timeless wisdom from The Simple Path to Wealth:

"Your money can buy you something far more valuable than stuff. Unfortunately, few will ever even see this as an option. There are pervasive and powerful marketing forces at work seeking to obscure the idea that such a choice exists. We are relentlessly bombarded with messages telling us that we absolutely need the latest trinket ... This is not some evil conspiracy at work. It is simply business pursuing its own needs. But it is deadly to your wealth."

ASK JL

Q: Age 57, with no savings, and recently unemployed. What's the best advice you can give to try to reach FI? —Liketa M.

Hi Liketa,

Once you eliminate debt and begin saving and investing at least 50% of your income, this is around a 10-to-15-year journey. The age at which you start doesn’t matter.

You also don’t have to reach full FI to benefit. From the moment you start, with each small step you become that much more fiscally strong.

Of course, saving and investing a portion of your income requires that you have income. So job #1 for you is to get another job, any job, ASAP, and work up from there. You’ll also want to take a very hard look at your spending and roll back the lifestyle creep that has likely, well, creeped up on you.

And here’s the most critical thing: Start now.

—JL

Got a money question keeping you up at night? Reply to this email and we'll get it over to JL.

Curving wooden staircase with warm lighting — Wealth is built one step — and decision — at a time.

WHAT WE'RE READING

📚 Over at A Wealth of Common Sense, Ben Carlson is out with his 6 Surprises from 2025 — including that just two of the "Magnificent 7" stocks beat the S&P 500 — and his 2025 investing lessons.

📚 The Mad Fientist reflected late last year on learning to spend money after so many years saving like a demon.

📚 We enter 2026 riding a long bull market. On his OG blog, JL Collins had some advice for "Investing in a Raging Bull."

THE BIG QUESTION

From the moment you chose to get serious about saving and investing, how long did it take you to reach financial independence?

Reply to this email and we'll feature some of your responses in upcoming issues!

Last time, we asked how you grapple with the big, global factors — like the U.S. national debt — that pose a threat to your portfolio but are beyond your control. Here are a couple of your answers...

I pay little attention to the news and do not watch any financial news. I pay no attention to opinions and predictions — no one can predict the future. I try to ignore my portfolio, and its balance, as much as possible! I invest in index funds with an aggressive allocation towards stocks. That’s it. I follow Jack Bogle’s advice in keeping it simple. —Jeff F.

There are enough opportunities to aid your investment success that you do control, so you shouldn't sweat the many things over which you have no control, like the national debt.

Focus on living beneath your means, saving and investing. Determine your true risk tolerance, choose an appropriate overall allocation, keep investment costs low, rebalance occasionally when appropriate, stay invested to benefit from compounding, and diversify your holdings.

Have a simple investment plan and stick to it, especially during stressful times. Be aware of behavioral biases which encourage bad investment decisionmaking. Look for reasonable tax-mitigation opportunities, and commit to a lifelong iterative financial-literacy education. —Doug P.