Things important, and unimportant

Photo by Megan Ruth on Unsplash


Investing for the long-term. Think decades. My holding period for VTSAX is forever, other than maybe selling a few shares while living on my portfolio. I am investing for generations.


Market Crashes. These are an expected part of the process, like blizzards in New England and hurricanes in Florida. Scary and dangerous if you make the wrong moves, but they always pass and the sunshine returns.

They are best ignored. What the stock market does today, this week, this year — That’s just noise.


Staying the course. This is the only way to enjoy the long-term growth of stocks. If you panic and sell, the market will leave you bleeding by the side of the road.

You have to be an optimist, believing in the future of the United States, the world in general, and that the incredible drive, creativity and problem solving ability humans have displayed so far will continue.


Obsessing about safety. No investment is 100% safe. Stocks are volatile. Cash in the bank is guaranteed to lose value to inflation. Real estate investments can turn sour in more ways than you can count.

As an investor, you don’t get to avoid risks. You only get to chose which ones.


Long-term, 10+ years, stocks actually carry very little risk. In fact, stocks are about as safe as you can get.

Long-term, stocks also offer the highest return.


Investing internationally

Also, unimportant — if you choose to ignore my advice and invest internationally anyway (which almost everyone else is telling you to do).

Jack Bogle, Warren Buffett and I don’t feel the need, but if you do, you’ll be fine. International stock markets, for the most part, have done pretty well.


Having a guideline as to when you have enough money to consider yourself financially independent (FI). Here’s the one I like:

25x the annual amount you spend/4% of your assets.

Spend $40,000 a year x 25 = $1,000,000 to be FI/spend 4% of $1,000,000 = $40,000 to spend each year.

This is what is known as “The 4% Rule


Whether 4% is exactly the “correct” withdrawal rate percentage.

4% was originally arrived at as a very conservative number and, indeed, the Trinity Study bears this out. (see link above) However, twice in the period of that study it failed.

If you have the misfortune of retiring at the beginning of a multi-year stock market decline, and you set your 4% withdrawal, and adjust it for inflation each year, and you put it on auto-pilot and you forget it, well then, you’ll have a slim chance of running out of money before the end of 30 years.

This is called Sequence of Return Risk.

But you’re not going to do that, are you?

If you are the kind of person who reads this blog and thinks about this stuff, there is exactly zero chance of you doing that.

Rather, you will begin your withdrawals and, keeping an eye on the market, adjust as/if needed. This adjustment, BTW, may well lead to you withdrawing more money as your investments grow. Indeed, in the Trinity Study, portfolios were far more likely to grow substantially in value than to crash and burn.

Catch 22: If you are the kind of person who obsesses about what withdrawal rate you can safely put on auto-pilot and forget about, you are the kind of person who would never put your withdrawals on autopilot and forget about it.

4% is a poor “rule” but it is a fine guideline. 


Becoming financially independent. In doing so you have bought your freedom. Freedom to spend your life and time as you wish without the need to trade your labor for money. With every step you take, you are that much stronger.

There is nothing more valuable that money can buy. At least for me.


Whether you choose to retire from your job or keep working once you are FI. Being FI doesn’t require you to quit a job you enjoy. It just means you get to choose, which is the point.


Finding meaning and joy in your life and your activities. It is hard to imagine anyone with the focus, intelligence and work ethic to achieve FI wanting to spend the rest of their lives doing nothing. 


Having “the internet retirement police” declare you Not Retired! because some of your new activities generate income.

For me, it has never been about retirement.


Investing in broad-based, low-cost stock index funds.


Which investment company’s funds you use.

I prefer Vanguard, for reasons I outline here.

My preferred fund is VTSAX which is Vanguard’s Total Stock Market Index Fund.

But an index fund is an index fund, and a total stock market index fund or S&P 500 index fund or total bond market index fund are essentially the same across investment companies. Feel free to use the firm of your choice.


Whether you use a total stock market index fund or an S&P 500 index fund.

Both are broad-based, low-cost funds, which is what you want.

VFIAX is Vanguard’s S&P 500 index fund and it is more commonly found in 401k type plans than VTSAX. (Or the equivalents from other firms.)

I prefer VTSAX, because it holds some mid-cap and small-cap stocks as well as the 500 largest. 

But because these funds are “cap-weighted” ~80% of VTSAX is made up of the S&P 500. If you track the performance of VTSAX v. VFIAX over 20 years the difference is tiny.

Jack Bogle held VFIAX until his death. Warren Buffett has it as the investment of choice for his heirs. If it is what you have, or what you prefer, you’ll be fine with it, too.


Mutual Fund v. ETF.

There are differences between funds and ETFs (exchange traded funds) but none that really matter to us long-term investors.

VTI is the ETF version of VTSAX. VOO, of VFIAX. In both cases they hold exactly the same respective portfolio.

Which you hold is more likely a function of your age than anything else — you own what was available/new when you came of age.

Either is fine.



Expense ratios (ER) are the fees funds/ETFs charge their shareholders and are a direct drag on our returns as investors. The difference between a 1% annual ER of an actively managed fund/ETF and the .04% of VTSAX is HUGE compounded over time.

Most broad-based index funds like VTSAX & VFIAX or ETFs like VTI & VOO are very low-cost. High ERs tend to be found in actively managed funds to, well, pay for all that active management.


When the difference in ERs is .04% v .03% as it is between VTSAX and VTI. 


Choosing index investing over active management/stock picking.

When Jack Bogle introduced the first index fund in 1975, it and he were widely ridiculed. But as the decades rolled on and the research piled up, the brilliance of the concept was repeatedly confirmed. Indexing outperforms active management and the greater the time period, the greater the outperformance.

Outperforming the market is extraordinarily hard, especially with the handicap of high fees to overcome.


Having an investment advisor to help you buy your index funds. More than unimportant, potentially dangerous.

Advisors are better served by putting you into high fee, actively managed funds that pay them better while likely underperforming.

To be sure, there are honest advisors out there but by the time you are well educated enough to recognize them in the herd, you are educated enough to do this yourself.

If you have an advisor and your answer to the question of “why” is some variation of…

  • “I’ve had them a long time.”
  • “They were my parents’ advisor.”
  • “They are my friend.”

…it’s time to take a very close look at what they have you invested in, what the fees are and why it is so damn complicated. Because it probably is.

Red flag: If they resist this conversation.

Oh, and if your answer is that last one, it could be being your friend is the real skill their company hired them for.


Your savings rate is one of the most powerful tools you have to reach FI. I used 50% in my journey. At the risk of stating the obvious, the higher your rate the faster you get there. The lower, the longer. Your choice.


Whether your saving rate should be calculated based on your pre-tax or after tax income. Clearly, 50% of the former is more than of the latter. Who cares?

That’s it…

..for now.

I’ll add more if/as they occur to me.

Your turn:

What have I missed?

Share your “things important, and unimportant” in the comments below.


Pathfinders is my new book coming later this year. It is the follow-up to The Simple Path to Wealth.
It is already available for pre-sale:
If you are so inclined, do me a solid and order now!

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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.


  1. Dwayne says

    Doing what JL suggests/tells you to do if you want to be FI or perhaps good to go at retirement or when you “get retired” unexpectedly.

    Listening to the talking heads on TV, online, or on podcasts that try to convince you to be a more active investor

  2. ken says

    Jl hits the nail on the head always
    Investing is so simple but Wall St wants to make you think otherwise
    If you want to “BEAT THE MARKET”, read this book by Edward Thorp-online PDF

  3. Frank says

    Great post JL… Thank you.

    What cost basis do you use/suggest when drawing the 4% from your brokerage account with Vanguard?

    Would you classify this as important or unimportant?

    • Corwin says

      Personally I’m a big fan of using “specific identification of shares” for a cost basis, for maximum control of how I sell the lots. That way you can ensure the lots are over a year old (to make sure you’re paying long term capital gains instead of short term at much higher tax rates). And if you need more cash and want to keep your income as low as possible, you can sell lots with lower cap gain percentages. If you want to do cap gain harvesting and don’t need the extra cash, you can sell lots with higher cap gain percentages.

      Fortunately the default cost basis at Vanguard is FIFO (first in first out), so that will maximize the odds you’re selling lots that are at least a year old. Given that fact, I’d probably lean towards classifying this as a bit less important.

      My first exposure to this concept was the “Specific Identification of Shares” article from the Mad Fientist – recommend checking that out.

  4. Sarah says

    Being investing every month in the VTSAX and so far I’ve got less than 10% of return (IRR). It sucks! Far from the promised 8-10% a year!
    I’ll stay the course but I’m not as excited as these FIRE people out there…

    • Prob8 says

      Sarah –

      Investing can be an emotional grind at times and you have to decide whether you have the temperment for it.

      Nobody can “promise” you 8-10% returns. Nobody. Returns cited by most people are based on historical long-term averages.

      I don’t know how long you’ve been investing but I’ve been at it for over 25 years. Some years are great and some terrible (50% loss on more than one occasion). But staying the course has earned me an average annual return at the high end of that range.

      If you haven’t done so already, I suggest you read (or re-read) the entire investing series on this blog and internalize the lessons.

      • Sarah says

        Since 2016,every month. I’ve read many times and that’s where I got the 10% a year. Actually 11% if I’m not mistaken.
        I’m inclined to move everything to CDs now paying 5.10% year guaranteed.

          • Sarah says

            Yeah but I didn’t invest in 2016. I started investing in 2016. Every month I can put a little more, and 2022 was the year I put the most in, therefore the worst performance. The biggest problem with these past returns is that they are cherry-picked and are all in at that point in time. It’s nothing like the real life where you have to invest a drop every month.

          • Jack says

            Sarah, it’s actually you who are cherry-picking. You’re picking one bad year (2022) as the basis for your decision to leave the market. JL is doing the opposite.

        • Corwin says

          Hi Sarah, that definitely sounds frustrating. I’m guessing you started reading about FIRE back around 2016, started to invest a bit more seriously, and then in 2022 you finally had more funds to invest and you were promptly greeted by a year long slump in the markets. That definitely sucks. It will get better though, even if it feels like it never will. I’m glad to hear you’re gonna stay the course. As many FIRE folks espouse, this is a fantastic buying opportunity, you just gotta get through this rough patch now. Go listen to JL’s calm voice talking about index funds on a podcast and I bet you’ll feel better 🙂

          • Pete says

            @Sarah I am the same like you. Incesting for 3 years. I have negative return so far. I keep buying and tell myself that I am buting cheaper whenever my nrgativr return increases. I am patient. When there are good days I check my portfolio often. When there are bad days I only look when I nerd to pay in another $.

  5. Sally says

    Bonds? Total Bond Index vs. Intermediate Treasury Fund? I keep thinking it is important and I should “figure it out “. I’m currently 70/30, Total Stock Index/Total Bond Index.

    • KM says

      I invest 100% in VTSAX. Bonds have never given me the returns I expected when I was in a Target Date Fund. Once I made this adjustment I have never looked at a Bond again. Then again, if I don’t understand the investment I won’t pursue it.

  6. Corwin says

    Agreed 100% on the savings rate pre- vs post-tax calculation. Though I’m a big fan of using the pre-tax calculation. What really amazes me is that if you have reasonable expense levels (~$50K to $60K) and a nice mix of pre- and post-tax assets, you can usually easily avoid federal income taxes during retirement by taking advantage of the standard deduction for pre-tax withdrawals and the 0% long term cap gains tax bracket for post-tax withdrawals. I was a bit stressed about how taxes would impact our withdrawal rate, but very fortunately there’s no reason for concern. Only exception: if you have state income taxes. But if you do, there’s a good chance your property taxes are a lot lower than mine here in TX.

    • EP says

      Do you have any suggestions on where to start to decode this comment? I want to understand it; I just haven’t reached that level yet. Is this a very accountant-specific aspect I should talk to a CPA about? Thanks!

      • Corwin says

        Hey EP! You can definitely talk to a CPA (which I am not) if you’d like, but I think most folks who are sufficiently interested can at least understand the fundamentals. As JL says above, “you are educated enough to do this yourself”.

        Every year when you do your taxes, most folks will elect for the standard deduction. That means any standard income (like what you get when you pull from a pre-tax account) less than this standard deduction is not taxed.

        After the standard deduction, the bottom tax bracket for long term capital gains (gains on investments at least a year old) is 0%. That goes up to $41,675 for single filers, $55,800 for head of household filers, and $83,350 married filing jointly filers. As long as you only sell post-tax lots over a year old, you can fit nicely into this 0% LT cap gains bracket.

        So if you take advantage of the deduction and 0% bracket, you won’t face any federal income tax, while still getting more than enough cash to fund your retirement (if it’s not too expensive).

        • EP says

          This is so helpful Corwin, thank you. I am within 3-4 years of my goal of 27 x (I have about 23x right now), but I have NO IDEA on what to do once I actually reach my number or how to manage my spending/investment mix in my post-FI years. I have spent so much time learning how to get here, I’m not prepared for what’s next.

          • Corwin says

            First off, congrats EP! 23x is a fantastic accomplishment, especially with the awful returns we’ve had over the last year.

            Second, I know exactly what you mean about post-FI finances. In many ways it’s a very different beast to tackle, knowing how to manage withdrawals instead of just pouring as much money as you can into your investments. That’s why I went a bit crazy with tons of analysis on my site to make sure we were OK – and I still have lots more to consider/analyze.

            If you haven’t seen the safe withdrawal series by Karsten at Early Retirement Now, I highly recommend it as well. I now heavily lean towards his recommendations for computing safe withdrawal rates.

  7. Wade says

    I advise those starting their careers to focus on all the above but just as important growing their income. I made the mistake of staying at one company too long. While I did fine financially, I did not earn as much as I could have.

  8. Paul says

    Reminding yourself you will not live forever, or even maintain your current state of health if/when you find yourself afflicted with “one more year…” syndrome while working.

    What anyone else thinks about your decision to FIRE.

  9. Penny Price says

    Important – Discuss, generally, personal finance topics with those you care about. Your kids, your spouse, your siblings. Learn from each other, and be willing to be somewhat vulnerable with what you’ve learned through making mistakes. Forgive yourself, heal, and grow. A rising tide lifts all boats.

    Unimportant – being mysterious.

  10. Vasudev P Saraf says

    Hi JL,
    you have condensed all that one needs to know. Improving on this is hard, and in my opinion, unnecessary.
    Thank you for the education. I have followed it more or less in the last ten years or so (or more?), bought couple of copies of your book for my adult children, and hardly watch the noise on TV or the sites. Since my retirement in 2020 I am now 100% on board.

    You freed up my time to do other important things. That is important.


  11. Chris Collins says

    Important – Accumulate a good amount of broad-based, low-cost stock index funds as early as you can. The compounding will work miracles.

    Unimportant- Don’t make sub optimal life choices once you have the ball rolling. Cutting out vacations or drinks with friends to take you FI date from 5.9 years to 5.1 years doesn’t make sense.

  12. Ralph Smith says

    Great reminder ! However, now with the US falling way behind China on tech, military development, space, quantum computing and a bunch of other areas, do you still don’t see the need to include assets from the major global power if your portfolio?

    • Jim Curtis says

      Not so fast. While is undeniable that China is surpassing us in many key areas, while the world is still reliant on the USD for trade, we should be fine. That shouldn’t change in the coming years or even decades.

  13. Dylan says


    Thank you for another thoughtful, simple, and profound post! I’ve been an admirer ever since plowing through The Simple Path several years ago.

    Recently I’ve been curious on your take around this hypothetical, but not unrealistic scenario: if the tax rate of long term capital gains ever shifts upwards from their current rate to or around the tax rate of ordinary income

    1) how (if at all) would this adjust strategy of “the simple path”?
    2) philosophically, do you think they should be taxed at the same rate? Despite the obvious benefit of a lower tax rate, I find it hard to justify that income from passive investment be taxed less than income from hard earned sweat/work

    Would love your thoughts, and thanks!

    • JohnR says

      David Byrne and company are very important! 😉 If you haven’t seen it, Stop Making Sense is one of the best concert films ever made.

  14. PFGuy says

    It’s as if I stumbled upon my PF journey over the last few years – all in one place. Did I unknowingly write this blog? Am I JL Collins?

  15. Tracey says

    Always love his posts and have read AND listened to his book. Such great stuff – wish it was taught in schools!
    Really looking forward to Pathfinders being published.
    (btw: Does anyone else hear JL’s soothing voice in their “internal monologue” while reading his posts, or is that only me?!) 🙂

  16. Wood, Adam says


    Just a small observation:
    1. Good to add a line break between Important and Unimportant, after reading some
    “pairs”, I lost track of which belongs to which.

    2. I am not sure if you have already written about this: What should I person start doing when they are “near” to their FI and wants to retire in a few years?

    As always, you have a great context, simple and concise.

  17. Guy Enemare says

    I’d like a brief lesson on Bond index funds such as BND/VBTLX. With all the current media noise (no I’m not tuned in!) about high bond yields up until the 2-yr, I’m just trying to figure out if there is an easy ETF way to buy into the short-term opportunity. Does BND adequately cover this at the moment? Or is something like VTIP a better choice? I know this is not a long-term investor question, but just looking to understand how BND indexes relative to all these different maturities.

  18. Chris says

    Great post!!
    Important- invest in yourself to maintain good physical and mental health.

    Unimportant- keeping up with the Joneses.

  19. John Harris says

    What would you do in my case JL where I’m 55 and have a very poor health condition. In my family nobody lived past 70. Do I plan for a shorter lifespan and retire now? I’m at 22x my annual expense exactly at the moment using a 60/40 index portfolio.
    (I should be able to get ACA)

    • Dave says

      While I am certainly no Jlcollins, I do have couple thoughts on your situation. First of all, I would start with a different question. Do you enjoy your job and does it add purpose to your life? If the answer is yes to this question then I would consider keeping the job, but maybe scaling back to part time if possible. There is a tremendous amount of research showing how important it is to have some kind of meaningful work and purpose in your life.

      On the other hand, if you do not enjoy your job and what lights you up is thinking about all the things you want to do in retirement then I would say go for it. It sounds like you probably have plenty of money for your situation especially if you can be a little flexible with your spending depending on how the market is doing. Also, keep in mind that you will probably still earn money again but on your terms and hopefully doing things you are passionate about.

    • Mark says

      Health related expenses can be extreme if you can’t get, keep”, and afford health insurance. I believe reaching the age where one qualifies for Medicare is important. Perhaps others have better insight about this. I was 66 when I retired. My wife and I qualified for Medicare. I have no experience with ACA. Good luck, John.

  20. Wheat says

    Saw a discussion elsewhere today and have this to add:

    Important: Putting as much as your savings as you can in tax advantaged accounts (IRA, 401k)

    Unimportant: Traditional vs Roth (at least for 401k)

    Roth IRA has advantages over traditional IRA so I think for most people that’s the right choice. With 401k it’s a difficult calculation filled with political crystal ball gazing as to which will end up being better 30-40 years down the road. I don’t know which will turn out to have been better in 30 years time, but I have a suspicion the difference between them will end up being a small fraction of the tax savings either way.

  21. jkub says

    In the unimportant comment: “If you have the misfortune of retiring at the beginning of a multi-year stock market decline, and you set your 4% withdrawal, and adjust it for inflation each year, and you put it on auto-pilot and you forget it, well then, you’ll have a slim chance of running out of money before the end of 30 years.”

    Did I read that right? There is a slim chance of running out of money even with a declining market at the start or does that mean there’s a slim chance of not having enough?

  22. Leonard says

    Did you know that if you had invested $1 in the market in 1871, you’d only have $87k right now? That’s it, less than 7% annualized return.
    It’s really not much all things considered.

  23. Frank says

    I’m sitting here hoping for the market to plummet even more than it did it 2022. This is the best buying opportunity since 2008. Volatility is your friend!! This is when true wealth is built. Those you hold the line in a bear market will be handsomely rewarded when the market returns. Just keep plowing money in each money and disregard the notice (as JL Collins suggests)

  24. Boring Stephanie says

    Important: after you put $ in an investment account, make sure it actually gets invested (not sitting as cash)!

    Unimportant: crypto and other new shiny things


  25. Brian says

    The 4% rule / 25x your annual spend is based on a 30 year draw down period. What is the rule/guideline if you want a 40 or 50 year draw down period?

    • Corwin says

      You might check out the really nice white paper that Vanguard put together in 2021 titled “Fuel for the F.I.R.E.: Updating the 4% rule for early retirees”. I’d recommend page 11, in particular, which shows some different scenarios of interest. If you’re not willing to consider dynamic spending or the current CAPE values for computing a safe withdrawal rate, then they indicate a reasonable rule of thumb is around 3.3% (Case C on page 11) for a 50 year retirement.

  26. What if says

    What is the best way to forget about bad financial decisions made early in life and keep asking yourself the “What if Questions”

    I am in a better spot now, but will be a long recovery.

  27. Sharon says

    My husband and I are retired, however, I work part-time (~12k/yr, I use for my Roth and just spend/extra money) We have no debt, 2 paid for houses, and we live comfortably on his pension and our SS. We are NOT drawing money from any of our accounts.

    We have Roth IRAs/Traditional IRA/Taxable Brokerage Account and also a MoneyMarket Savings Acct.
    We have been doing Roth Conversions from the Traditional IRA for the last 4 years still staying in the 12% tax bracket.

    Recently, I have been reading that it would be better for our kids inheritance if the money was all in the Taxable Brokerage Account (due to the Step-up in basis) Do you think it would it be better for us to be Converting/Transferring from the Traditional and Roth IRA to the Taxable Brokerage Account? And…. me to put my “work” money in the Taxable Account too? It is so hard to find an answer, as most people following your plan are using their money to live in retirement.
    Thank you so much!

    • Corwin says

      I asked Sean Mullaney (The FI Tax Guy) basically this exact question at the last FinCon: all else being equal, what’s better to leave in an inheritance, a Roth account or a Taxable for the step up in basis? And he confirmed what I suspected: the Roth is still the best thing your heirs can inherit. It’s mainly because of the 10 year rule: your kids can let the funds grow tax-free for a full 10 years after your death before they’re required to withdraw them (current law of course, could change in the future). See IRS publication 590-B, or google “Roth 10 year rule”.

    • jlcollinsnh says

      Hi Sharon…

      Excellent and interesting question. Here’s how I would rank them for your kids to inherit, from worst to best:

      —Traditional IRA is least desirable.

      Once your kids receive it they will be required to draw it down over the course of ten years. As it comes out, all the money will be taxed as ordinary income at their highest tax bracket. No capital gain tax break here.

      Demographics being what they are, it is also likely they will be receiving and paying taxes on this money during their own peak earning (and tax bracket) years.

      So you are doing the correct thing in shifting this money into your Roth.

      —The taxable account is the next best option, for the reason you cite.

      When you die, the cost basis will step up to whatever the price is at that time. This means your kids will avoid having to pay tax on any capital gains that have accumulated. However, should the investment be at a loss, that lower price will be stepped down to and they’d lose any ability to write off the capital loss.

      This is a pretty sweet deal and certain members of congress would love to take it away. So you’ll need to keep an eye on that.

      —The best option is the Roth.

      Contributions and earnings in a Roth are always tax free upon withdrawal. This is true for you and for your heirs.

      The only difference is you never have to withdraw from your Roth. There is no RMD (required minimum distribution) for you as with a traditional IRA.

      But your heirs will have to deplete your Roth within ten years of inheriting it.

      Corwin makes a great observation and one frankly had never occurred to me.

      Your heirs can let the Roth grow tax-free and untouched for those ten years and then withdraw it all, still tax free, at the last minute.

      Of course, as he points out this is a sweet deal and as such congress might take it away.

      So, Sharon, keep shifting money to your Roth!

  28. Rachel says


    Just finished reading your book and at 37, you’ve started me on a financial journey with my future in mind. However, I have a question regarding my son. I have $15k (child support payments that I never used) sitting in a bank account that was earmarked for him that I would like to get invested with the intention of giving the account to him to use how he decides when he’s in his 20s (🤞🏼he’ll keep it invested). He does not work currently, and I’m worried about a UGMA/UTMA affecting his ability to obtain financial aide should he need it. What would you recommend?

  29. Tammy from San Diego says


    Setting a goal and taking action in the present. For me this means a monthly automated contribution to VTSAX that is at the highest rate I can manage.


    Giving a lot of time, energy and regret about past mistakes, financial and otherwise, including “what if’s”.

  30. investor research says

    Thank you jlcollinsnh for another great article. I have enjoyed reading your works, and have read your first book as well, and plan to read the next.

    Additionally, I have been reading many works from the FI community. This has me in construction mode and doing much reflection on my life and incorporating ways to become wealthy and financially independent.

    I would say I fell into the traditional camp of work hard, save, and buy a home and then work hard for years to pay it off as fast as you can. But since engaging in these reading, and crunching numbers, I have come to a large realization and am ready to make the biggest move yet financially to strive towards FI.

    One concept sticks with me largely, that being opportunity cost- I began to think about the equity sitting in my home and how it isn’t doing much for me there verse the power that could come from long term investing.

    Thus some context, I am in Canada, home purchase 650,000, remaining balance 300,000 with 24 years left in payoff schedule unless I keep throwing extra money at it. I am in a race to save on interest lost/costs, only then to watch my home appreciate at a rate of inflation like you have noted if my area is so inclined to do so.

    So let’s be generous and say it does still increase its value over those 24 years, to maybe 850,000 for that side of argument.

    When I run numbers, by taking the 350,000 equity, and invest it in an S&P 500 or VUN.TO canada version of vanguards VTSAX, and let it sit for the next 24 years, it sure is a whole lot higher that 200,000 gain. Also as we know, the home will depreciate over time unless I keep up with repairs, etc… leading to more money sunk in therefore, eating away at any sense of gain in the home.

    All this to say, I have run the numbers, and feel I will be much more future wealthy and leading towards FI, if I sell, take the equity and invest the 350,000 as you suggest, and simply try and find a rental with even less cost per month overall compared to my home costs on a monthly basis.

    I have begun this process now of listing my home, with the idea that I want to make this move now thinking that the market for housing is likely to go down in future even more with continued interest rate hikes, and in the year 2025/26 almost 2/3 of mortgage holders in Canada will be facing renewal, therefore the real pain of interest rate hikes won’t be felt by the majority until then related to their homes, possibly leading to an increase in supply of homes with people selling when they no longer can afford their mortgage costs.

    Some markets are already affected and have gone down, and my thoughts are this will continue, thus I need to implement my learnings and take action now, which is what I have done.

    Any insightful feedback is welcome, and again I appreciate and have enjoyed the learning picked up from the wealth of knowledge that you provide, so thank you.

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