A simple path to wealth, as presented in the popular book "The Simple Path to Wealth" by JL Collins, involves a few key principles: avoiding debt, living below your means, and investing the surplus income primarily into low-cost broad market index funds. This approach is designed to be easy to understand and implement, focusing on steady long-term growth through the power of compound interest. The book emphasizes that simplicity and consistent execution in investing often outperform complex strategies. Key elements of this path include:
- Avoiding or quickly paying off high-interest debt
- Saving and investing a significant portion of your income (50% or more if possible)
- Investing mainly in a total market index fund like Vanguard's VTSAX to capture broad market growth
- Developing "F-you money" — enough savings to be financially independent and free to make life choices without financial pressure
Execution and patience in this straightforward investment approach lead to financial independence over time, without requiring complex financial decisions or timing the market.
