The Simple Path to Wealth

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

February 17, 2026

If there's one topic that readers of this newsletter send in more questions on than any other, it might well be international funds. For many people, the world feels like it's changing more rapidly than ever, and longtime followers of JL Collins' philosophy are always eager to know whether his strategy is changing with it.

Has he wavered on the "VTSAX and chill" approach that has defined The Simple Path to Wealth all these years?

Well, yes and no.

In a post on his blog this month, JL said he's shifted his total U.S. stock market holdings from VTSAX to VTI—trading a mutual fund for an ETF, though it's the same collection of U.S. stocks. It's a simple conversion in Vanguard.

But he's also shifted some of his investments from those total U.S. market funds (VTSAX/VTI) to a total world fund: VT, which gets you exposure to pretty much every publicly traded stock across the globe.

Why the change? In short, JL has concerns about current U.S. trade policy and the decline of the U.S. dollar, both in value (it sunk about 10% against other currencies last year) and as the world's reserve currency.

THE SIMPLE NUMBERS

2025 was a strong year for stocks across the board. The S&P 500 returned 16.4%, clearing its 50-year average of around 12%. But the wider world actually outperformed the United States equities market—often to a 2x tune. Much of Europe was up 30% or more, as were China, Canada, and Mexico.

None of which is any reason to switch from U.S. index funds to international. Past performance does not guarantee future returns, and chasing that performance—really, making lots of changes to your portfolio in general—is a bad bet.

So here are some numbers that might be more useful:

VTSAX (or VTI in ETF form) is 100% U.S. equities.

VTIAX (or VXUS) is 0% U.S. equities: It's Europe, Asia, and beyond.

VTWAX (or VT) is currently around 62% U.S. equities, 38% international.

Those last numbers will continually shift, because VT is a global market fund that reflects the current market capitalization of all publicly traded companies, U.S. or not. When European stocks rise, for instance, they'll occupy a greater percentage of VT.

Close-up of an antique globe showing australia and australia — It's a big, wide world out there.

SIMPLE PATH OF THE DAY

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

"Be sure that whatever global fund you choose includes the U.S. market. It is a huge chunk of the world economy, and you can’t afford not to own a part of it. Many “international” funds—especially those offered by U.S.-based firms like Vanguard—are “ex-U.S. stocks,” meaning they do not include U.S.-based stocks. The reason is that they are designed to supplement the holdings of investors already in the U.S. market with VTSAX and the like."

ASK JL

Q: There are so many people saying, “This time is different,” jumping on international stocks and silver right now due to their high returns last year. All of it makes me uncomfortable, and I’d rather just stay put. Do you foresee a time when people would NOT be OK staying in only VTSAX? —FI at 50

For the foreseeable future, my guess is VTSAX/VTI will remain solid choices. But, as I say in this post, the time will come when it might not be optimal to be invested in only our home country. Just as it is not optimal anywhere else in the world.

What percentage of your portfolio is now allocated to international? —Skip A.

I haven’t calculated it, as I don’t feel the need. Best guess, ~15%. Remember, VT is ~62.5% US. Like I say, this is not a huge move.

What do you think of a VTI/VEA mix, adding international but sticking to developed ex-U.S. markets? —Jon B.

Personally, I prefer the broader reach of VXUS over VEA.

—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 young people are piling into the stock market: The rate of participation tripled from 2013 to 2023, which the paper links to out-of-reach home prices.

📚 You've built a portfolio that'll last decades — now make sure your body can, too. Built From Broken shows you how to protect your joints and stay injury-free for the long haul.

📚 Earlier this month, Ben Carlson checked in on the perennial question of whether to invest a lump sum in the current market over at A Wealth of Common Sense.

THE BIG QUESTION

Do you own international funds? When did you expand your focus beyond U.S. markets, and why?

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

Last time, we asked whether you have a Roth IRA and what percentage of your holdings are in that bucket as opposed to a 401(k) or elsewhere. Here are a few of your answers...

I have a Roth IRA. It makes up about 27% of my retirement and investment accounts combined. Because I live in Illinois, which does not tax retirement income AND does not tax Roth conversions, I have been religious about funding my pre-tax 457b and then converting up to the top of my 22% bracket each year. This gives me a permanent savings of 4.95% on anything I put in my pre-tax 457b, and then I convert it as soon as I can.

The good problem I have is that the account is growing faster than I can convert, but I don't need to convert everything. I just want to have some control over the eventual RMD [required minimum distributions]. And I will have a window of opportunity after I retire and before I draw Social Security—then I can be more aggressive, since I will be making much less. —Colleen K.

In 2026, my income will be above the [$168,000] limit and I am considering a backdoor Roth IRA. I will be doing some additional research to see if that is my best investment option now that I am moving into the 24% tax bracket.

Employer sponsored 401(k): 58%
Brokerage Account: 17%
Roth IRA: 11%
HSA: 10%
ESPP/RSUs: 4%

—Jena P.

We only have a small amount in our Roth 401(k). Every year, we maxed out the [standard] 401(k) in favor of the pre-tax benefit since my husband and I were high earners. The rest went into VTSAX post-tax with Vanguard. After my husband retired and I became the single earner, I put the max into the Roth 401(k) instead of the 401(k), since our tax rate went down and we wanted to have a bucket of money we could withdraw tax-free.

401(k): 67%
Roth: 3%
Taxable brokerage: 16%
Cash and bonds: 14%

The tricky part is that retiring early (at 44 and 47, yay!), we have to wait five years before we can access either the 401(k) or the Roth. Health insurance is another unexpected hurdle, since there’s an income cap to get the subsidy. Withdrawing from the 401(k) will spike our income. Hindsight is 20/20, but if I knew five years ago that managing income for health insurance would be what it is now, I might have put more into the Roth for the tax-free withdrawal benefit. —Elisabeth B.

I opened a Roth IRA about a year after I graduated from college in 2007. At the time, it didn't feel like a big deal to forfeit the upfront tax deduction and get the taxes part done with. I only contributed about half of the maximum amount permitted by the IRS in the late 2000s, which seems like a "D'oh!" moment now. Still, for a young dude just out of college, that was better than nothing, which is probably the case for most early twenty-somethings.

All that being said, this decision has paid off rather well for me, since the Roth balance accounts for about 40% of my total investments (retirement accounts and brokerage) at age 41. Starting a couple years ago, I observed that there was more growth via investment performance (in VTSAX) annually than the maximum amounts that I contributed every year. It's validating to see the balance in my Roth IRA now, considering where I started 19 years ago. Compounding growth was only a theory back then when I was looking at a $0 balance. —Adam W.