The Simple Path to Wealth

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

January 20, 2026

“Education is the ability to listen to almost anything without losing your temper or your self-confidence.”

—Robert Frost

THE SIMPLE NUMBERS

How much do people pay their financial advisors? The Wall Street Journal looked into it in October of last year.

With the assets under management (AUM) model, where advisors charge a percentage of the total assets they manage for the client, fees generally range from 0.5% to 2%.

If they charge a monthly or annual retainer, it's roughly $6,000 to $10,000 per year.

If they've got an hourly rate, it's around $120 to $300 an hour.

And then there's the fee-based hybrid model, where advisors charge you a fee up front and take a commission when they sell you financial products and services.

No matter the fee structure, keep in mind that to earn his or her keep, the advisor must not only beat the broad market index. They've got to beat it by a large enough margin to justify their fees.

SIMPLE PATH OF THE DAY

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

"People underestimate the drag of costs to investing. Paying fund and/or advisor fees of 1%–2% seems low, especially in a good year. But make no mistake, these annual fees are a devil’s ball and chain on your wealth.

As a point of reference, the average mutual fund ER (expense ratio: the fee funds charge investors) as of 2023 was ~0.59%, and the average index fund ER was 0.11%. The ER for VTSAX is 0.04%. As Bogle says, performance comes and goes, but expenses are always there, year after year. After year. Compounded over time, the amount lost is breathtaking.

Consider this: Once you begin living on the returns from your portfolio, you’ll be able to spend roughly 4% of your assets per year. If 0.59% of your money is going to management fees, that is 14.75% of your income.

ASK JL

Q: 64 years old. We will manage our investments with your advice. Do we need an accountant for anything? We’d rather not pay anyone if we don’t have to, but wondered if we are missing something. —Claire D.

Hi, Claire…

If by "following my advice" you mean holding only two funds — a total stock market index fund and a total bond market index fund, with at least 50% in stocks — probably not. This is The Simple Path after all.

But if, like most people in their sixties, you’ve picked up other investments and unique life situations along the way, you may well benefit from their guidance.

It is, of course, impossible for me to know your personal situation.

—JL

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

Statue of lady justice holding scales indoors — How will you judge whether an advisor is earning their fee?

WHAT WE'RE READING

📚 Once upon a time, Mr. Money Mustache explained why "it's all about the safety margin."

📚 Ben Carlson posted his annual analysis of historical returns for stocks, bonds, cash, housing, and gold, updated to include the year 2025.

📚 On the Collaborative Fund blog, Morgan Housel reflects on housing, extremism, and nostalgia as we begin a new year.

THE BIG QUESTION

Why did you hire a financial advisor? And if you got rid of them, why did you decide you didn't need one anymore?

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

Last time, we asked how long it took you to reach financial independence from the moment you got serious about saving and investing. Here are a few of your answers...

Hi! The book changed my life, and the newsletters are great doses of motivation. In my 20s, I accumulated significant debt, which I paid off by 27. For years after, I stayed financially flat: debt-free, but with minimal investments and little momentum. At 41, I had just finished graduate school and liquidated my modest retirement savings to avoid taking on new debt. I was starting a job earning about $70K (more than my parents had ever made in a year collectively), with no savings but also no debt. Having lived on roughly $25K a year for four years, I chose not to inflate my lifestyle and instead saved and invested aggressively.

Two years later, my income rose sharply through a side hustle that evolved into lucrative consulting. I invested everything beyond my baseline spending. After 6 years, my income more than doubled. I eventually loosened up (spending about $40K a year, roughly 25% of my income) and banked the rest. I've been able to invest more than $100K per year for the past two years, and there's no reason that won't happen in 2026. Eight years after that reset, my net worth is between $806K and $1.2M, depending on how a pension is counted.

I’m still not sure how I define “financial independence.” What I do know is that I never lose sleep over money. I love my career, may or may not retire early, and deeply value the power of FU money, especially the freedom to opt out of additional “opportunities” (read: duties) without financial stress. And life is good. My hobbies are free: reading, writing, hiking. I travel extensively with my career. I don't know if this will make sense to people, but I literally breathe differently now. So while I wouldn’t quite call it financial independence, eight years of intentional choices have made a life-changing difference. Thanks, JL! —E.

I felt financially independent after six years in a U.S. corporate job, and a year and a half in two low-paying nonprofit companies. So, 7 and a half years? But I hadn't reached any particular FI number, and what followed were 10 years of something that didn't feel like work. So by the numbers, it's nearly 18 years. But now, with a little introspection, I see that I never got serious about saving and investing. I was probably more serious about consuming no more than I really needed. —Bruno B.

I graduated college in 1997, but it wasn't until 2011 that I started investing my time into learning how to become financially independent. At that point my husband and I had just $135K in retirement savings. I researched many blogs, including yours (my favorite). We were fortunate to have good jobs, and started maxing out our 401(k)s and Roths. I even started a brokerage account for the excess savings we had. In just eight years we reached $1M! And by December 2021, we reached our financial independence goal of $1.8M. So our journey took 10 years, using the amazing advice in your Stock Series. Thank you! —Tracy R.