J. Collins

The author shares his personal techniques, insights and experiences regarding saving money and investing, drawn from his blog posts as well as a series of letters to his teenage daughter, both dealing with money management.

Your Road Map to Financial Independence and a Rich, Free Life

The Simple Path to Wealth

Damian Makki

One of my very few regrets is that I spent far too much time worrying about how things might work out. It’s a huge waste, but it is a bit hardwired into me. Don’t do it.

The point is that to play this market timing game well even once, you need to be right twice: First you need to call the high. Then you need to call the low.

The market always recovers. Always. And, if someday it really doesn’t, no investment will be safe and none of this financial stuff will matter anyway.

But during periods of inflation, anything you want to buy will cost more tomorrow than today. You have an incentive to buy that house (or car or appliance or loaf of bread) today and beat the price increase. Delay is punished with higher prices later and action now is rewarded. Buyers become ever more motivated. Sellers become ever more reluctant. Too much of this and the market slips into a deadly spiral of increasingly worthless currency people are desperate to exchange for goods.

Stocks: VTSAX (Vanguard Total Stock Market Index Fund). Stocks provide the best returns over time and serve as our inflation hedge. This is our core wealth-building tool. (See Chapter 17 for variants of this same fund.) 2. Bonds: VBTLX (Vanguard Total Bond Market Index Fund). Bonds provide income, tend to smooth out the rough ride of stocks and serve as our deflation hedge.

Some seek absolute security, but it simply doesn’t exist.

The Simple Path to Wealth quotes

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