The Simple Path to Wealth

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

December 9, 2025

“Whatever course you decide upon, there is always someone to tell you that you are wrong.”

—Ralph Waldo Emerson

We're fast approaching the holiday season proper, and you're likely on the gift hunt! The good news is that The Simple Path to Wealth is still on sale over at Amazon, and the reviews are in:

"A timeless book that highlights a clear pathway to financial success. I purchased five copies for my daughter and her husband and several of their friends. It has become a standard gift to the young people in our life that we care about!" —Randy P.

"To prevent the 'I wish someone would have told me this 10, 20, or 40 years ago' problem, it makes a great gift for high school graduates, college graduates, newly married, and those early in their careers. Yes, even those who have large student (and/or consumer) debt can become masters of their financial matters and reach financial independence at a relatively young age. I have shared my copy with several others and purchased additional copies as gifts." —Anonymous

THE SIMPLE NUMBERS

Last year, Morningstar's Center for Retirement and Policy Studies published a report that found 45% of American households will run out of money in retirement. That's for those retiring at age 65. For those retiring just three years early, at 62, the number rises to 54%.

The key, Morningstar finds, is contributing to a defined-contribution plan — like a 401(k) — for at least 20 years. 57% of those who do not participate are at serious risk of money problems in retirement, while just 21% of 401(k)-havers are in that boat.

Of that last group, Morningstar reports they're at risk because they "likely cash out their balances upon a job change or deplete their accounts via pre-retirement withdrawals."

SIMPLE PATH OF THE DAY

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

"This is why I think it is nuts to just set up a 4% withdrawal schedule and let it run regardless of what happens in the real world. If markets plunge and cut my portfolio in half, you can bet I’ll be adjusting my spending ... By the same token, in good times, I might choose to spend a bit more than 4% knowing the market is climbing and that provides a strong wind at my back ...

True financial security — and enjoying the full potential of your wealth — can only be found in this flexibility. As the winds change, so will my withdrawals. I suggest the same for you."

ASK JL

Q: If I have a military retirement paying me each month, how does this affect my FI number? —Dave M.

Hi Dave,

The simplest way to calculate your financial independence (FI) number is to use the 4% Rule as a guideline with your invested assets. So, if you have $500,000 invested, you can withdraw $20,000 a year.

Next, you calculate how much you spend each year.

Finally, you add any pensions, Social Security, or other income you will receive.

So, an example might look like this:

Annual spend: $80,000
4% of invested assets: $20,000
Military retirement (annual): $50,000
Total income: $70,000

In this example, our income is $10,000 short of our annual spend. Some adjustments will need to be considered.

Perhaps a reduction in spending. Perhaps a part-time job or hustle that would generate the $10,000. Or perhaps even just taking a 6% withdrawal.

The 4% withdrawal rate is, by design, very conservative. 5%, 6%, and even 7% withdrawal rates often find success as well. However, if you go this route, you will want to keep a close eye on the market. Should it choose your early retirement years for one of its periodic plunges, you’ll need to quickly adjust.

—JL

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

Tropical beach with palm trees and a hammock.

WHAT WE'RE READING

📚 Over at A Wealth of Common Sense, Ben Carlson reports some news that will be music to any Simple Path-head's ears: "Boring investing still works."

📚 Morgan Housel's "Little Rules About Big Things" include that "having no FOMO might be the most important investing skill."

📚 JL recommends Darrow Kirkpatrick's Two Sticks, One Path: "You gotta admire grit, determination and adventure, and my pal Darrow gives us all three in his new book. Though it's primarily about hiking a long-distance trail, he never would have had the opportunity to reach that bucket-list dream without having survived a potentially career-ending midlife crisis. Along with grit, it took having F-you money. Completing the 500-mile Colorado Trail and following The Simple Path to Wealth have much in common."

THE BIG QUESTION

Have you decided on what your withdrawal percentage will be in retirement? Are you comfortable with it — and confident you will not have issues paying your bills — or will you be living close to the edge?

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

Last time, we asked about your method for rebalancing your portfolio between stocks and bonds. Here's one of your answers...

I rebalance by adjusting my future purchases until I reach the planned allocation. —Murray, "retired but still accumulating"