The Simple Path to Wealth

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

October 27, 2026

Knowledge is power, but you've still got to take action. For readers of The Simple Path to Wealth who agreed with every word but haven't quite started their own journeys, there's something new to help get those wheels in motion.

Jessica Collins was among the first to follow The Simple Path, since the book grew out of her father JL's letters to her about financial freedom. Now she's put together The Simple Path to Wealth Workbook, which is designed to help you put the principles of the Path into practice in your own life—like managing your monthly expenses and cutting out the waste so you can make that money work for you:

The Simple Path to Wealth Workbook is available for preorder today!

THE SIMPLE NUMBERS

When we covered how to get your kids interested in financial independence a little while back, we got plenty of incoming mail asking about the different investment vehicles you can use to set your child up for success.

One such vehicle—a new one—is the so-called "Trump Account." Launched in July, these are investment accounts set up for American children at birth to get them exposed to the wealth-building power of the stock market from day one.

Since inception, the U.S. government reports, more than $4.5 billion has been deposited in these accounts.

SIMPLE PATH OF THE DAY

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

"Financial independence is at least as much about being able to live modestly as it is about cash."

ASK JL

Q: I'm curious what your thoughts are on the "Trump Accounts," particularly for individuals fortunate enough to already have fully funded 529 accounts who are looking to help kickstart their children's retirement. I'm interested in setting up the Trump Accounts for my kids so that I can start accumulating money that can then be converted into IRAs at 18 (or when they're no longer dependent, to avoid kiddie tax issues). Thanks so much for your guidance, which has put me on the path to wealth! —Jason K.

Hi Jason,

Kudos for giving your kids an early start!

Since it sounds like you have already funded 529s for your kids, you know these are designed for education savings and are tax-free on withdrawal if used for that purpose.

These new Trump Accounts are for more general wealth-building for children under the age of 18. If your kid(s) are U.S. citizens and happen to be born in the years 2025 through 2028, the government kicks in a free $1,000 to start. You, and many others, can add an additional $5,000 per year.

The money must be invested in broad-based, low-cost stock index funds—which, if you know me, I view as a plus.

For the most part, the money can’t be tapped until the child turns 18. At that point, it basically converts to being a traditional IRA. This means it can remain invested or be withdrawn in part or in full. But any withdrawals are treated the same as any traditional IRA: subject to tax as ordinary income, and to a 10% penalty if pulled before age 59 and a half. This being the government, there are probably some exceptions.

Importantly, at 18 the child has full control over this money. What you might see as a great start to building wealth could go up in smoke. Not your kid, of course, but maybe some other.

The main concern I mostly hear is the connection to Trump. Those who love him see this as a plus. Those who see him as a fraudster often imagine him slipping the money into his own pocket at some point. As far as I can tell, that is structurally unlikely.

pink pig coin bank on brown wooden table — What's the best (virtual) piggy bank for your kid?

The risks are the more normal issues worth considering. The largest is: How responsible will the recipient be at age 18?

Some others:

The stock market is volatile and there are no guarantees. That said, historically 18 years in the market has most often worked out very well.
Congress can always change the rules of the game, but this is true of all these government programs like IRAs and 401(k)s. Plus, such rules are most likely to affect future contributions or accounts and protect those already in place. No guarantee, but politicians usually try to avoid angering voters.
Inflation is running high these days, and certain policies are likely to put more upward pressure on this. Who can say what the next 18 years will bring? That said, stocks are a pretty good long-term inflation hedge.
This is a new program and it is unclear what management or administration costs might be. As we on The Simple Path know, costs are critical.

In short, the risks are much the same as any government investment program. The risk of fraud or the government seizing the money is, I think, very low.

My advice, if you have a kid eligible for the $1,000: Sign up for at least that. Free money!

Before I added more, however, I’d consider opening a Roth IRA for the child.

They have to have earned income, but that can be most anything: Mowing lawns, working at your business, becoming a baby model. You can fund it with money you provide up to the current limit or the amount they earn.

Hope this helps!

—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

📚 After a decade of financial freedom, The Mad Fientist has thoughts on "learning how to spend money (while enjoying every dollar spent)."

📚 Mr. Money Mustache once ruminated on what should really go into your decision when buying a car in America.

📚 For those interested in the complexities of the bond market, Ben Carlson is diving in over at A Wealth of Common Sense.

*The Simple Path to Wealth Workbook* is a companion on journey.

THE BIG QUESTION

Which investment vehicles—529s, "Trump accounts," Roth IRAs, a traditional brokerage—have you harnessed to get your kids into investing early?

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

Last time, we asked whether you've ever successfully timed a market crash. Here are a few of your responses...

The closest I came to doing it was purely luck. From 2015 to 2020, I bounced around between a few different jobs and picked up three different HSA accounts. In February 2020, I decided it was time to roll them all into my current account.

So, I did all the paperwork and ended up moving all of them right at the peak before the Covid crash. By the time I’d gotten everything processed and deposited into the new account, the S&P was right at the bottom and I bought back in. It’s nice to be lucky every once in a while.

However, I also remember noticing when FCX bottomed out around $6 and telling myself I should buy it because there’s no way it would get that low again. Should’ve, could’ve, would’ve! —Steve M.

In the short term, the stock market behaves like a drunkard who lost the way home. In the long term, we have sufficient proof that the market goes up.

But what about the medium term? I personally believe, without having scientific proof, that valuation matters in the medium term. If stock prices lose touch with company profits, investing in stocks may become irresistibly attractive (low valuation), or too burdensome in terms of risks and rewards (high valuation). After all, other opportunities exist for investing, aside from the stock market, and people regularly take advantage of them.

What I have actually done in the last year or two is sell a bit more than needed when valuation is high, and buy when valuation becomes more reasonable. I am not even sure that it works, and it is way too early to evaluate how the experiment is going. I expect a marginal benefit of about 1 to 2%.

In terms of peace of mind, nothing beats simple. But selling a bit when everyone is crazy about buying gives me some additional satisfaction. A little like saying "fuck you" to the market, or to its hype and excesses. —Bruno B.