Heroic with Brian Johnson | Activate Your Best. Every Day.
Heroic with Brian Johnson features the best big ideas from life-changing books and practical tools to help you move from Theory to Practice to Mastery and flourish in Energy, Work, and Love. Get more wisdom in less time so you can activate your best, every day—so that we can change the world, one person at a time, together, starting with you and me and us, today! (Learn more at https://heroic.us)
Continuing our series on how to build a bonFIRE, today we’re going to chat about The Big 3 of creating Financial Independence (and Interdependence) as we win the ultimate game of life, Realizing Eudaimonia.
Let’s flip open our copies ofThe Simple Path to Wealth by JL Collins for this wisdom-love.
As we briefly discussed in our last +1, JL is a tough-love, lovable Uncle kinda guy. He originally shared his “simple path to wealth” via a series of letters he wrote for his daughter. Those letters became a blog series.
Obviously check out the book and JL’s site for the deep dive (and, I’m a lover of wisdom not a financial planner so…), but here’s The Big 3 in a tiny nutshell.
1. Avoid debt.
2. Spend (WAY) less than you make.
3. Invest the rest.
That’s it. Do that. Give it time. And… Voila.
Well, obviously there’s a LOT more to it than that.
But, as they say, the NUMBERS are simple. It’s the LIFESTYLE changes that are hard.
One more time:
1. Avoid debt.
Like the plague. Seriously. Debt is TOXIC to your freedom. Think: Shackles.
2. Spend (WAY!!!) less than you make.
JL and the FIRE Co. tell us to save AT LEAST 50% of total earnings savings rate. ← Yes, you read that right. Spend AT LEAST 50% less than you make. Want to buy freedom? It’s not cheap. But it’s a lot more shiny than that shiny stuff.
Although no longer cool, it’s as wise as ever: LIVE BELOW YOUR MEANS. Way below. (But only if you want what really matters: The eudaimonic happiness that freedom helps us buy.)
3. Invest the savings.
More specifically: In Index funds. More specifically, in Vanguard’s Total Stock Market Index Fund.
This is kinda what JL is known for. He tells us we should all consider Jack Bogle a hero. Bogle founded The Vanguard Group (and invented index funds) forty years ago. JL provides some very (!) compelling arguments for why Vanguard’s Total Stock Market Index Fund is the secret sauce. (Warren Buffett pretty much agrees, btw.)