The Simple Path to Wealth

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

April 14, 2026

“Lack of money is the root of all evil.”

—George Bernard Shaw

THE SIMPLE NUMBERS

Does it pay to invest ethically? Well, your definition of that term may vary.

But assuming you mean something like, "U.S. equity ETFs with corporate governance themes," Alana Benson had a look at the best performers in 2026 for NerdWallet and found some standouts, like First Trust Emerging Markets Human Flourishing ETF (FTHF) and Franklin Responsibly Sourced Gold ETF (FGDL).

But it's hard to say for sure why these funds have performed well this year. Many in the list target emerging markets, some of which may not necessarily constitute "ethical" investing destinations. They're certainly a different kettle of fish from, say, renewable energy firms.

And besides, as Benson notes later on in the story, "Many of the funds listed as 'best overall' above are actively managed," and "actively managed ESG funds tend to be more expensive than passively managed funds." FTHF has an expense ratio of .75%, compared to .04% for VTSAX.

Why's that important? "Higher fees can also negate higher returns."

SIMPLE PATH OF THE DAY

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

"I don’t favor indexing just because it is easier, although it is. Or because it is simpler, although it is that too. I favor it because it is more effective and more powerful in building wealth than the alternatives. "

ASK JL

Q: Ethical investments: Is there a way to make investments in a broad based index fund without supporting fossil fuels, prisons, and weapons manufacturing? Or is that inevitable? —Christopher B.

Hi Christopher…

The short answer is "no." A broad-based index fund is by definition going to hold all kinds of stocks.

That said, mutual fund companies are happy to offer you all kinds of ‘ethical’ funds, each tailored to a unique definition of what is ethical.

I’m not a fan.

These funds tend to have high fees, lower returns, and are actively managed.

My approach is to use the broad-based index fund with the lower fees and greater returns. This, in turn, gives me more resources to support organizations and causes that make the world a better place—in harmony with my definition of what that means.

This is far more effective in my opinion.

—JL

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

Solar panels and power lines in a grassy field. — You are (of course) free to invest in solar energy firms or the ETFs that target them. It's your path!

WHAT WE'RE READING

📚 There's a new paperback edition of JL's book Pathfinders, which highlights the stories of those who've followed The Simple Path to their financial freedom. It's available now!

📚 This week's reminder that there are hidden costs to homeownership? The Wall Street Journal reports "the typical U.S. home is 44 years old—and needs tons of work."

📚 If you've ever wondered why so many of the businesses you love (and own in your index fund) seem to turn bad over time, Incorruptible by Eric Ries digs into what's really going on—and how companies could be built to stay true to their values instead.

THE BIG QUESTION

Do you invest in any individual companies or ETFs on the basis that it's the ethical thing to do? What are they?

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

Last time, we asked about when you learned about the magic of compounding, and how that knowledge played a role in your investing life. Here are a few of your answers...

I was 25 and a night supervisor at a library and had time to read online forums late at night. I remember reading about investing and using investment calculators to see the power of compounding. That's around the same time I started reading JL's blog. We retired a few years ago at 38. —Brandon G.

I first learned about compounding in elementary school when my teacher gave us a puzzle. "Which would you rather receive: $100 a day for 30 days, or one penny on the first day, which then doubled every day for 30 days?" We all wanted the $100 a day until she had us do the math. (If you’ve never done this puzzle, give it a try. It’s quite eye-opening!)

Later, in my mid 20s, I saw a chart that showed if you invested $2,000 a year from the time you were 25 until you were 35, and then never invested any more, you’d end up with more money at age 65 than someone who started investing $2,000 a year at age 35 and continued investing until they were 65. This convinced my husband and me to open IRAs, which we contributed to every month, even if all we could manage was a small amount.

Once a year, I would check the balance of our IRAs, and it was amazing to see that line start to curve up. A year ago, we were able to retire, and we aren’t worried about ever running out of money. Our money is still compounding! —Julie T.

I learned about compound interest in college during an Engineering Economics class. It was an entire semester of doing present-value-of-money and future-value-of-money equations. I applied this skill to my student loans and was shocked to calculate how much I would pay back for my loans over the 10 year repayment period.

Once I graduated, I threw every dollar I could towards my loans and wiped them out less than 18 months later. Once they were gone, I was able to invest that same amount each month. Finally, compounding interest was making me money instead of costing me money! —Danielle K.