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by
J.L. Collins
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March 14 - March 15, 2025
the real heavy lifting was done by the author who is now just being nice. Then I wrote this book.
That there is not an award for this is one of the great shortcomings of our civilization.
Two close boyhood friends grow up and go their separate ways. One becomes a humble monk, the other a rich and powerful minister to the king. Years later they meet. As they catch up, the portly minister (in his fine robes) takes pity on the thin and shabby monk. Seeking to help, he says: “You know, if you could learn to cater to the king, you wouldn’t have to live on rice and beans.” To which the monk replies: “If you could learn to live on rice and beans, you wouldn’t have to cater to the king.”
“We have F-You Money,” I said. “We don’t care about fancy cars or a bigger house. If you kept working what could we possibly buy with the money that would have more value than you being home with our daughter?”
So now I’m (again) retired and it feels great. I love not having to keep regular hours. I can stay up till 4 am and sleep till noon. Or I can get up at 4:30 and watch the sun rise. I can ride my motorbike any time the weather or my pals beckon. I can hang around New Hampshire or disappear for months at a time to South America. I post on my blog when the spirit moves me and I might even get another book or two written. Or I can just sit on the porch with a cup of coffee and read the books others have written.
Rather than the pursuit of learning and culture, it has become the pursuit of job training in an effort to secure employment that will justify the astounding cost and debt incurred.
Youth should be spent exploring—building and expanding one’s horizons—not grinding away in chains.
Those who live paycheck to paycheck are slaves.
There are pervasive and powerful marketing forces at work seeking to obscure the idea that such a choice exists.
“You know, Jim, you just can’t raise a child properly without one of these!” Ah, no. Actually you can. In fact, billions of children have been raised over the course of human history without ever having been videotaped. And horrific as it may sound, many still are today. Including my own.
If you are not yet financially independent and you see this as an attractive goal, you’ll be well served to look at your spending through the prism of opportunity cost.
The person who could reliably do this would be far richer than Warren Buffett, and twice as lionized.
Believing in Santa Claus is more profitable. Breeding unicorns is more likely.
“Those who would trade liberty for security deserve neither.”
The market is the single best performing investment class over time, bar none.
Don’t worry. The world isn’t going to end on our watch. It is hubris to think it will.
Once “professional management” starts trying to beat the system, all bets are off. They can, and most often do, make things much worse and they always charge more fees to do so. We’ll talk a bit more about this in a later chapter.
But what is important is that it takes an act of will, awareness and effort to understand, accept and then change this destructive behavior.
“Past results are not a guarantee of future performance.” It is the most ignored sentence in the whole document. It is also the most accurate.
Imagine you’ve been reading this book on a nice warm summer’s afternoon. Richly deserving of a reward, you crack open a bottle of your favorite brew and pour it into a nice chilled glass. If you’ve done this before you know that if you carefully pour it down the side you’ll wind up with a glass filled mostly with beer and a small foam head. Pour it fast and down the center and you can easily have a glass with a little beer filled mostly with foam. Imagine now someone else has poured it for you, out of sight, and into a dark mug you can’t see through. You have no way of knowing how much is beer
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Understand too, that what the media wants from these commentators is drama. Nobody is going to sit glued to their TV while some rational person talks about long-term investing.
the more complex an investment is, the less likely it is to be profitable.
Be persistent. Life is uncertain. The job you have and love today can disappear tomorrow.
When you buy stock you are buying a part ownership in a company. When you buy bonds you are loaning money to a company or government agency.
While offering lower interest rates than corporate bonds, they have the advantage of being exempt from federal income taxes.
Put all your eggs in one basket and forget about it.
Roth 401(k) These are relatively new and not yet widely available. It is worth comparing these bullet points to those of the Roth IRA we’ll discuss shortly. Contributions you make are NOT deductible from your income for tax purposes. All earnings on your investments are tax-free. All withdrawals after age 59 1/2 are tax-free. Once you reach age 70 ½ RMDs take effect. There is no income limit for participating.
All withdrawals after age 59 1/2 are tax-free.
we’d have a Roth IRA in the sense that withdrawals are tax-free and a regular IRA in the sense that we get to deduct our contributions to it. The best of both worlds.
Money management seems not the calling of the rare and saintly.
investments that are expensive to buy and own are, by definition, poor investments.
a field that provides access to people’s life savings is a magnet for con men, thieves and grifters.
Consider how all this can add up. Take a 5.75% load, combined with a 1% management fee, along with an expense ratio of, say, 1.5% and you’ve given up 8.25% of your capital right from the start. That’s money you not only lose forever, you also lose all the money it could have earned for you over the decades. Compare that with the 0.05% expense ratio of VTSAX. Holy Crap!
The great irony of successful investing is that simple is cheaper and more profitable. Complicated investments only benefit the people and companies that sell them.
there is too much money to be made and too much weakness in human psychology for actively managed funds and managers to ever go away.
more fortunes have been created brokering trades than making them.
The world is filled with predators looking for people precisely like her.
You are likely to be conned in an area of your expertise. The reason is simple: Targeting and ego.
Many of Bernie Madoff’s victims were financial professionals.
If it looks too good to be true, it is. There is no free lunch. Not ever. Your Mama taught you this. She was right. Listen to your Mama.
inverted pyramid. He starts by selecting a very volatile stock and he sends out 1,000 letters. Half predict it will rise and half that it will fall. The 500 that got the correct prediction get letter #2 with a different volatile stock. The 250 that now have two correct predictions get letter #3 and so on. By letter #6 you have 15 or 16 marks who have gotten six letters in a row with your infallibly accurate predictions. Most will be begging by then to be taken.
“Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.”
Where exactly is this 2.7 trillion? The 2.7 trillion dollar surplus is commonly referred to as the Trust Fund and it is held in U.S. Treasury Bonds. This as of 2012, by the way, is about 16% of the roughly 16 trillion dollar U.S. debt.
Politicians rarely try to take anything away from a large population that votes.
We were planning to sell our house and I was planning to retire. Without the house and its associated deductible costs we’d no longer be itemizing. Upon retiring I’d be in a lower tax bracket. Both these things would lower the tax advantage of charitable giving. The solution: The JJ Collins Charitable Fund
As individuals we only have one obligation to society: To ensure we, and our children, are not a burden to others. The rest is our personal choice. Make your own and make the world a far more interesting place.
Avoid debt. Nothing is worth paying interest to own.
Too true!
To consider buying a house, if you are so inclined. But don’t be in a hurry. Houses are not investments, they are expensive indulgences. Buy one only when you can easily afford it and if it provides the lifestyle change you want.
Muk was not the only person in Tahiti we met who had managed to put life together on their own terms.
