The Stacking Benjamins Show
Episode: The Simple Path To Contentment (with JL Collins)
Release Date: May 21, 2025
Hosts: Joe Saul-Sehy, OG, and Neighbor Doug
Guest: J.L. Collins, Author of Simple Path to Wealth

Introduction to J.L. Collins and Simple Path to Wealth

The episode kicks off with the enthusiastic introduction of J.L. Collins, the acclaimed author of Simple Path to Wealth. Celebrating the book’s 10th anniversary, the hosts express their admiration for Collins' work, highlighting its impact on the financial independence (FI) community.

Doug:
“J.L. Collins is here. He wrote Simple Path to Wealth. It's one of our favorite books. You're going to love it.”
[01:58]

The Essence of Financial Independence

Collins delves into the foundational principles of his book, emphasizing that financial independence is more about mindset and managing needs than merely accumulating wealth. He shares a poignant parable from his book about a monk and a minister, illustrating the true essence of freedom.

J.L. Collins:
“Reaching financial independence isn't just about having a certain amount of money. It's however much money you have against your needs or what you perceive your needs are. It's that balance.”
[10:18]

Collins’ Personal Journey to FI

J.L. Collins recounts his journey toward financial independence, which began unintentionally. In the mid-1970s, during a period of economic stagnation, Collins saved half of his $10,000 annual income. This disciplined approach allowed him to accumulate enough savings to travel Europe for six weeks, demonstrating the power of FU money—a concept that provides financial security and autonomy.

J.L. Collins:
“It's the power of FU money. You save aggressively, live below your means, and give yourself the freedom to make life choices without financial constraints.”
[24:06]

Key Principles for Building Wealth

Collins outlines three main pillars that contributed to his financial success:

1. Unwavering 50% Savings Rate:
   Saving half of his income allowed him to amass significant wealth over time.

2. Avoiding Debt:
   Collins stresses the importance of eliminating debt to ensure financial freedom.

3. Embracing Index Investing:
   Following the principles perfected by Jack Bogle, Collins advocates for low-cost index fund investing as a reliable path to wealth.

J.L. Collins:
“If you follow these three things, not only will you be rich financially, but you'll have a much richer life.”
[25:09]

Debunking Common Financial Myths

The conversation highlights misconceptions about spending and happiness. Collins argues that true contentment doesn't stem from excessive spending but from aligning expenditures with genuine needs and values.

J.L. Collins:
“Anybody who thinks that spending money is going to make them happy, by definition is going to be severely disappointed.”
[47:34]

Navigating Market Volatility and Tariffs

Amid discussions about recent tariff announcements and their potential impact on the market, Collins emphasizes the importance of maintaining a long-term investment perspective. He reassures listeners that market downturns are typically temporary and that staying the course is essential for building wealth.

J.L. Collins:
“The market will recover and it will go on to greater heights. You just have to stay the course and keep investing.”
[34:35]
Joe Saul-Sehy:
“It is not different at all. The market will recover and it will go on to greater heights.”
[34:35]

Effective Withdrawal Strategies for FI

Addressing listeners in the withdrawal phase, Collins shares his straightforward strategy:

1. Dividends and Interest:
   Utilize dividends from bond and stock funds as a primary income source.

2. Selling Shares as Needed:
   Sell a minimal number of shares to cover any additional required funds, ensuring that withdrawals align with market conditions without causing undue stress.

J.L. Collins:
“It's very simple for me. Take your dividends and interest first, then sell shares as needed to reach your withdrawal target.”
[36:27]

Listener Q&A: Portfolio Allocation

A listener named Mike poses a question about portfolio allocation, specifically regarding a 30% allocation to small-cap value stocks. Both hosts and Collins provide insights:

Joe Saul-Sehy:
“You have to protect against horizon risk by capping individual asset classes to ensure enough diversification.”
[66:11]

OG:
“Any singular idea, like small-cap value or tech-focused investments, can lead to significant volatility. Diversification is key.”
[60:15]

Collins reinforces the importance of diversifying across multiple asset classes to balance risk and return effectively.

J.L. Collins:
“If you follow these strategies, you are likely to be fine. Don't overcomplicate your portfolio with arbitrary constraints.”
[62:50]

Practical Advice for New Investors and Graduates

The hosts share valuable tips for recent graduates and individuals new to investing:

• Start Early:
  Begin contributing to retirement accounts like 401(k)s from day one.

• Save Aggressively:
  Allocate a significant portion of your income to savings and investments.

• Track Your Net Worth:
  Regularly monitor your financial progress to stay motivated and informed.

OG:
“Focus on cash flow and a high savings percentage. Don’t get bogged down by tracking net worth too frequently early on.”
[78:09]

Joe Saul-Sehy:
“Start your 401(k) on the first day, increase your contributions annually, and build your emergency fund early.”
[76:33]

Conclusion and Final Thoughts

As the episode wraps up, the hosts reiterate the simplicity and effectiveness of Collins' principles. They emphasize the importance of living below one's means, investing wisely, and maintaining a disciplined approach to achieve financial independence and contentment.

Doug:
“Keeping it simple is the best beginning you can have in any portfolio. Spend your time learning to be happy on less money so you can enjoy whatever you want to spend.”
[82:30]

Joe Saul-Sehy:
“Don't overthink your approach to managing money. Follow the simple path and stay focused on your goals.”
[82:30]

Notable Quotes:

• J.L. Collins on Financial Independence:
  “Reaching financial independence isn't just about having a certain amount of money. It's however much money you have against your needs or what you perceive your needs are. It's that balance.”
  [10:18]

• J.L. Collins on Spending and Happiness:
  “Anybody who thinks that spending money is going to make them happy, by definition is going to be severely disappointed.”
  [47:34]

• Joe Saul-Sehy on Portfolio Management:
  “Start your 401(k) on the first day, increase your contributions annually, and build your emergency fund early.”
  [76:33]

• Doug on Simplicity in Investing:
  “Keeping it simple is the best beginning you can have in any portfolio. Spend your time learning to be happy on less money so you can enjoy whatever you want to spend.”
  [82:30]

Key Takeaways:

1. Mindset Over Money:
   Financial independence hinges more on managing needs and maintaining the right mindset than on sheer wealth accumulation.

2. Save Aggressively and Avoid Debt:
   High savings rates and debt avoidance are critical pillars for achieving financial freedom.

3. Index Investing:
   Embracing low-cost index funds is a reliable strategy for long-term wealth building.

4. Diversification and Risk Management:
   A diversified portfolio across multiple asset classes helps balance risk and return, safeguarding against market volatility.

5. Practical Withdrawal Strategies:
   Utilize dividends and thoughtfully sell shares to ensure a steady income stream during retirement without succumbing to panic selling.

6. Start Early and Stay Disciplined:
   Begin saving and investing as early as possible, maintain disciplined contributions, and avoid overcomplicating investment strategies.

This episode of The Stacking Benjamins Show offers a comprehensive exploration of J.L. Collins' approach to financial independence, blending practical advice with philosophical insights to guide listeners toward a balanced and contented financial life.