May 12, 2026
A heartfelt thanks to the very many of you who've volunteered to serve as beta readers for The Simple Path to Wealth Workbook ahead of its release this fall! For those who are chosen to participate via the random draw, we'll get you more information soon.
In the meantime, anyone and everyone is welcome to pre-order the new Simple Path companion book now! It's another great tool for staying on the straight-and-narrow as you follow your journey to financial freedom.
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THE SIMPLE NUMBERS
An April 2026 survey conducted by the Harris Poll on behalf of the American Institute of CPAs found that 78% of U.S. respondents have at least some money set aside to cover living expenses in an emergency. But:
- 20% have saved less than three months’ worth of expenses
- 24% have three-to-six months
- 10% have saved seven-to-nine months
- 6% have 10 or 11 months
- 18% have a year or more saved
The survey also found that among adults age 55-64—who are nearing retirement and are thus more vulnerable in the event of a financial setback—only 25% have a year or more of living expenses saved up.
In general, the report adds, CPAs who work on financial planning often advise clients to have at least six-to-eight months set aside in highly liquid assets.
SIMPLE PATH OF THE DAY
A slice of timeless wisdom from The Simple Path to Wealth:
"So that’s it. Three simple tools. Two index 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."
ASK JL
Q: I kinda did all the Simple Path steps at once, so I have my 401(k), Roth IRA, taxable brokerage account and an emergency fund. I finally got my emergency fund to a point where it has 12 months of expenses saved up.
My question is: Do I stop contributing my $400/month to that high yield savings account and divert that money to taxable/401(k) accounts now that I have reached 12 months? —Jackie R.
Hi Jackie,
Yep, with your emergency fund covered, it’s time to refocus on building your wealth.
As you recognize, this means diverting that money to your taxable brokerage account, your 401(k), and/or a Roth IRA.
Which one you'll use depends on your tax bracket and how fully funded your tax-advantaged accounts already are.
—JL
Got a money question keeping you up at night? Reply to this email and we'll get it over to JL.
WHAT WE'RE READING
📚 The Wall Street Journal reports that foreclosures are surging due in part to "fast-rising homeownership costs such as property-tax and insurance bills." It's yet another reminder of how expensive it really is to own a home.
📚 A little over 14 years ago, Mr. Money Mustache explored "how to get rich with nature." Financial freedom philosophy!
📚 And for a companion piece of money perspective, check out Morgan Housel's reflections on the quality of life we enjoy today vs. yesteryear over at the Collaborative Fund blog.
THE BIG QUESTION
How many months of living expenses do you have saved up? Is it in a high yield savings account, money market funds, a traditional bank account?
Reply to this email and we'll feature some of your responses in upcoming issues!
Last time, we asked whether you have any doubts about your investments in index funds as their share of the market continues to grow. Here are a few of your answers...
I am perfectly at ease with index funds, and I agree with JL's argument that, should imbalances occur, they will be fixed by the remaining quota of traders on individual shares.
On the other hand, I know how anxious I would be holding individual shares for a long time considering how uninformed I am on the companies making up the indices. I recently found out how little I knew about the company I had been working with for years. It was an unpleasant discovery. —Bruno B.
Absolutely, I have concerns about placing additional dollars to work in the S&P 500. With a trailing P/E of 28, the index is expensive by historical standards. It's two standards of deviation higher than average!
I have been limiting my exposure to the S&P 500 to 25% of my investment mix, and have been prioritizing putting money to work in large-cap value, international value, and small-cap value ETFs. As I'm a few years from retirement, I have PTSD from the lost decade where the S&P 500 did virtually nothing from 2000 to 2012.
I have no idea where the S&P 500 will be at the end of 2026, but I'm reasonably certain that the index will fall out of favor in the next 5 years. Until that time, I'm taking the position that I will not put additional dollars to work until valuation is closer to historical averages. —Daniel C.
No particular concerns about index funds per se. However, the more I learn about the shadowy world of fixed interest and examine long-term (10-year) returns, the more I'm convinced it's worth finding a well-managed, low-cost active bond fund that sticks to investment-grade securities. I need to be convinced that it's even possible to reliably index the fixed interest world! —David K.
I follow the simple diversity plan for someone in retirement, like myself, between VTSAX and bonds. I diversified from 90% VTSAX and 10% of various bonds within my 401(k) to 75% VTSAX and 25% VMFXX.
Plus, a thank you note to JL: I read The Simple Path to Wealth back in July 2019, and it put me in great shape financially and allowed me to retire a year ago at 63 with likely more income than we’ll ever need. Thank you for all the effort you've put into your books and the website. —Mike S.
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