Your Road Map to Financial Independence and a Rich, Free life – J L Collins

J L Collins is known for his blog about stock picking. The title itself brings a lot of clarity among investors about generating wealth in a very simple way.

How many times we have heard that Life is Simple but simple does not mean it is easy.

We are the only intellectual species on this planet who are expert in making simple things complicated. The same holds truth for every field of human life. The book provides a simple roadmap to achieve financial security by adopting simple ways. Nowadays everybody is chasing after money but one must aspire for long term wealth.

The author has written this to guide his daughter about investing who complained that she does not have any time to understand the complex world of finances and jargon of finances.

J. L. Collins is a very seasoned investor in stocks, mutual funds and all other financial vehicles. He shares his simple formula for common investor in his book. I can share his simple formula but I think it will be worth reading by you to know this formula. It may be possible that you have heard about this formula but have not paid attention to it but the author makes a strong case about this formula such that you will be convinced about this formula.

I am not so good with words so I do not know whether I have build enough curiosity. I may not be able to convince you of this formula but the author will 100% convince you about this. The magic formula is:

Invest in the Index Funds

The author proves that how index funds having less expense ratio overall successfully beats the market in the long term than the active mutual funds with huge expense ratio.

Investing in Index funds is a complete no-brainer where the user does not have to study the market, know about the working of the various companies , devote a lot of your valuable time to understand about investing, listen to lots of market gibberish and utter confusion.

Year by year just consistently put your money in Index funds (suggested by him) and this will take care of your entire finances.

The author quotes this:

“If you reach for a star, you might not get one. But you won’t come up with a hand full of mud either.” — Leo Burnett

So index funds are the essential tools for you to achieve your wealth.

The author says,

Stop thinking about what your money can buy. Start thinking about what your money can earn. And then think about what the money it earns can earn.

Investing in Index funds is a passive way to generate your required wealth. Your money will work for you when you are asleep.

The author has learnt this lesson through his experience in investing in stocks, various active mutual funds, etf etc Hence he says,

“Wisdom comes from experience. Experience is often a result of lack of wisdom.” —Terry Pratchett

Hence the author has shared his magic formula by learning hard way. I liked this quote from the book

“Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.” —Groucho

So if you are a lazy investor then this book is a must read for you. You and your entire family can amass wealth using this formula of J.L.Collins.