I was so excited when JL Collins, one of my favorite Financial Independence thought leaders came out with a new book. New book means a new round of podcast interviews from literally one of the best voices in finance. Literally, because his voice is like the dreamy baritone you’d want hosting your late-night radio show. Smooth, warm, and perfectly paced. Which makes him an extra awesome podcast guest.
The other way in which JL is the literal voice of the modern financial independence movement, is because of his seminal book, The Simple Path to Wealth (affiliate link). In which, he eloquently lays out how living below your means and investing the rest in low cost index funds is a guaranteed path to financial independence.
Living below your means, delayed gratification, having a large savings rate. Discipline, Deprivation…that’s what F.I. is all about, right?
What Did He Just Say?
So imagine my surprise when, listening to a podcast on my daily walk, I hear JL say “Spend every dollar!” I almost walked out into traffic, I was so surprised. But of course, it was pure genius.
He was recounting a conversation he had with a woman struggling with saving. She had been accustomed to buying luxury items. It was a huge part of her joy, her identity, spending money on the finer things.
In a moment of inspiration he said it hit him. Yes, spend every dollar you have, spend it on the crème de la crème – spend it buying your freedom! Basically, he reframed buying broad market index funds as the most valuable, finest thing that money could buy. Looking forward to logging into your brokerage account to buy shares should feel as good, or better, as walking out of Louis Vuitton or Hermes with a fat bag of swag. It is a brilliant behavioral finance hack to turn saving from deprivation into a luxury.
Redefining Luxury
Beyond being a trick, it is really true. It is a luxury to be able to buy our freedom. First of all, it means that you’re one of the lucky 15% or so of the world, according to UNCAD, to live in a developed country with stable economies, infrastructure for investing, access to healthcare, clean water. Seriously, pretty darn lucky!
And if you like having that feeling of people envying what you have – well wait until people hear you have complete time freedom to do whatever you want. You will truly be the envy of all. When you tell a boss who doesn’t appreciate you that you’re leaving, or can take that trip of a lifetime that time off from work wouldn’t allow. Let me tell you, that is truly jealousy inducing among the masses.
Pathfinders
So thank you, once again, to JL Collins for voicing the powerful message of financial independence. Check out his new book, Pathfinders, filled with the stories of people who’ve bought their freedom, following their own versions of the simple path recipe. It doesn’t disappoint.
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