jlcollinsnh - Stock Series

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Rowan Oak
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jlcollinsnh - Stock Series

Post by Rowan Oak » Mon Jan 22, 2018 10:50 am

A very Boglehead approach to investing and very well organized. A great place to start learning from the ground up.

jlcollinsnh - Stock Series

Also, his book based on the Stock Series:
"The Simple Path to Wealth" by JL Collins
"The Simple Path to Wealth" -- A Gem

From his Manifesto:
Here are some of the things I’ve learned along the way:

Spend less than you earn – invest the surplus – avoid debt

Do simply this and you’ll wind up rich. Not just in money.

If your lifestyle matches or, god forbid exceeds, your income you are no more than a gilded slave.

As individuals we only have one obligation to society: To make sure we, and our children, are not a burden to others.

The rest is your personal choice. Make your own and make the world a far more interesting place.

While giving is a fine and pleasant thing, no one has an obligation to do so. Anyone who tells you differently is trying to sell you something, most likely the idea of giving to them and/or their pet project.

Spend sparingly. Tip generously.

You own the things you own and they in turn own you.

Money can buy many things, but nothing more valuable than your freedom.

Life choices are not always about the money, but you should always be clear about the money choice you are making.

Without [(removed) --admin LadyGeek] Money you are a slave. If you have debt, you are a slave with still stouter shackles.

You weren’t born to be a slave.
Last edited by Rowan Oak on Mon Jan 22, 2018 11:04 am, edited 1 time in total.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

kksmom
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Re: jlcollinsnh - Stock Series

Post by kksmom » Mon Jan 22, 2018 10:57 am

The simple path to wealth is great book

Here is a short video by the author re FU money
https://www.youtube.com/watch?v=eikbQPldhPY

snarlyjack
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Re: jlcollinsnh - Stock Series

Post by snarlyjack » Mon Jan 22, 2018 11:00 am

Rowan,

Your learning. Way to go...

John Collins is awesome.
If you really study what he is doing. 1 fund (TSM) very low ER .04
2 funds at the most (Total Bond Fund). AA of 100 or 90/10, or 80/20.

That's all a person really needs. Super efficient, low ER, just keep
investing (good time's & bad times). Let time (compounding) work
it's magic.

This is basically my strategy. Everything else is a distraction...

JDot
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Re: jlcollinsnh - Stock Series

Post by JDot » Mon Jan 22, 2018 11:02 am

So I originally started learning about financial stuffs and investing here at this forum. I am forever grateful that this place exists. From this platform I found "early retirement" and "frugal life" type forums/bloggers.

JL Collins is referenced a lot in the early retirement community. I find his stuff to be largely consistent with what I learned here at bogleheads.org. I'm interested to hear what others say.

For entertainment purposes, I recently discovered this video. https://www.youtube.com/watch?v=eikbQPldhPY

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Rowan Oak
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Re: jlcollinsnh - Stock Series

Post by Rowan Oak » Mon Jan 22, 2018 11:05 am

kksmom wrote:
Mon Jan 22, 2018 10:57 am
The simple path to wealth is great book

Here is a short video by the author re FU money
https://www.youtube.com/watch?v=eikbQPldhPY
Agreed. I have edited the original post to include a link.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

Biglaw Investor
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Re: jlcollinsnh - Stock Series

Post by Biglaw Investor » Mon Jan 22, 2018 11:19 am

JDot wrote:
Mon Jan 22, 2018 11:02 am
JL Collins is referenced a lot in the early retirement community. I find his stuff to be largely consistent with what I learned here at bogleheads.org. I'm interested to hear what others say.
JL Collins is the real deal. My experience is that his writing meshes very well with Boglehead philosophy.

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Re: jlcollinsnh - Stock Series

Post by jadd806 » Mon Jan 22, 2018 12:24 pm

IMO he's just another blogger with no credentials speaking far outside his area of expertise. I would not attribute much value to any of his advice beyond the basic live below your means and invest with low expense ratios. Like Mr. Money Mustache, I view it as more of a lifestyle blog than an investing blog.

I read the whole series and was not impressed. I consider his advice on asset allocation in "Article XXIII" to be particularly awful.

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Re: jlcollinsnh - Stock Series

Post by Rowan Oak » Mon Jan 22, 2018 12:44 pm

JDot wrote:
Mon Jan 22, 2018 11:02 am
So I originally started learning about financial stuffs and investing here at this forum. I am forever grateful that this place exists. From this platform I found "early retirement" and "frugal life" type forums/bloggers.

JL Collins is referenced a lot in the early retirement community. I find his stuff to be largely consistent with what I learned here at bogleheads.org. I'm interested to hear what others say.

For entertainment purposes, I recently discovered this video. https://www.youtube.com/watch?v=eikbQPldhPY
For investors who believe in Simplicity you will appreciate the writings of JL Collins.

He actually uses a Two-fund portfolio consisting of Total Stock and Total Bond exactly as Jack Bogle endorses in
"Little Book of Common Sense Investing--10th Anniversary Edition".

Like Jack Bogle he doesn't include International Stocks in his own portfolio for three reasons: Added risk, added expense and we’ve got it covered.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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oldzey
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Re: jlcollinsnh - Stock Series

Post by oldzey » Mon Jan 22, 2018 1:33 pm

I enjoy JL Collins' book and website. Useful stuff.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Taylor Larimore
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A Simple Path to Wealth -- A Gem

Post by Taylor Larimore » Mon Jan 22, 2018 8:42 pm

Rowan Oak:

I also think that "The Simple Path to Wealth" by Mr. Collins is a very good book. I copied many of his valuable quotes and they are included in my Investment Gems. This is the link:

The Simple Path to Wealth

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

kksmom
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Re: jlcollinsnh - Stock Series

Post by kksmom » Mon Mar 12, 2018 6:40 am

JL Collins: "The Simple Path to Wealth" | Talks at Google

https://www.youtube.com/watch?v=T71ibcZAX3I

Kevin K
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Re: jlcollinsnh - Stock Series

Post by Kevin K » Mon Mar 12, 2018 9:59 am

i've given his "Simple Path to Wealth" to two nieces just beginning their working lives because its brevity and clarity should help them get onto the right path for saving and investing.

That said, his 100% equity or 90:10 allocation makes all the sense in the world during the early decades of the accumulation phase but IMHO ought to be supplemented with careful study of far less dangerous portfolios over time. Two fund fans and Mr. Collins himself could learn a thing or three about risk and reward here:

https://portfoliocharts.com/portfolios/

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jazman12
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Re: jlcollinsnh - Stock Series

Post by jazman12 » Mon Mar 12, 2018 10:21 am

oldzey wrote:
Mon Jan 22, 2018 1:33 pm
I enjoy JL Collins' book and website. Useful stuff.
++
Act soon... time is running out

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Re: jlcollinsnh - Stock Series

Post by jjface » Mon Mar 12, 2018 10:22 am

Personally I think "If you can" cannot be beat as an introduction to investing. https://www.etf.com/docs/IfYouCan.pdf
Short and simple.

If you want to go more complicated than that I wouldn't turn to Jlcollinsnh. Though I see he is pretty popular and some appreciate his style of humor. I find his investing style too aggressive and it can be dangerous for newbies to go 100% stocks without thinking more carefully about their risk tolerance. He touches on it but doesn't emphasize it enough in my opinion.

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Re: jlcollinsnh - Stock Series

Post by Kevin K » Mon Mar 12, 2018 2:43 pm

jjface wrote:
Mon Mar 12, 2018 10:22 am
Personally I think "If you can" cannot be beat as an introduction to investing. https://www.etf.com/docs/IfYouCan.pdf
Short and simple.

If you want to go more complicated than that I wouldn't turn to Jlcollinsnh. Though I see he is pretty popular and some appreciate his style of humor. I find his investing style too aggressive and it can be dangerous for newbies to go 100% stocks without thinking more carefully about their risk tolerance. He touches on it but doesn't emphasize it enough in my opinion.
Thanks for sharing Mr. Bernstein's great booklet. I know I read it years ago and couldn't agree more: far superior to the J. Collins stuff. Unfortunately Collins is part of a pretty influential contingent that includes Mr. Money Mustache, Go Curry Cracker and others that exclusively recommend 100% or nearly 100% TSM portfolios to millennials. Mr. Bernstein, like many others who post here, has lived through enough market crashes (and seen enough "stay the course" investor clients panic and sell at the bottom during market crashes) to be much more nuanced in his advice while still keeping things simple.

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Re: jlcollinsnh - Stock Series

Post by wrongfunds » Sat Jan 25, 2020 5:59 pm

Very entertaining author!

I wish he had provided source for the following assertion that he made
So profitable are they, there are actually more mutual funds out there than there are stocks. You read that correctly. Yeah, I’m amazed too.

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ThereAreNoGurus
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Re: jlcollinsnh - Stock Series

Post by ThereAreNoGurus » Sat Jan 25, 2020 10:47 pm

wrongfunds wrote:
Sat Jan 25, 2020 5:59 pm
Very entertaining author!

I wish he had provided source for the following assertion that he made
So profitable are they, there are actually more mutual funds out there than there are stocks. You read that correctly. Yeah, I’m amazed too.
Is it that hard to use google?

For the US:
Number of mutual funds: https://www.statista.com/topics/1441/mutual-funds/
Number of stocks: https://www.wsj.com/articles/where-have ... 1510869125
Trade the news and you will lose.

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Re: jlcollinsnh - Stock Series

Post by Helo80 » Sat Jan 25, 2020 11:01 pm

Thumbs up to this guy.

I did not discover him until a reference was made to one of the sites that has several dozen pie charts of various asset combinations recommended by financial experts in the PF industry. JL Collins was the only one in my memory that was 100% VTSAX. Considering that I have been a 100% equities proponent since college (pre-2009 crash), and still am a 100% equities proponent... I checked him out.

His humor matches mine and his articles.... I very well could have written them.

Even this quote, "Spend sparingly. Tip generously." from the bulleted list above --- I'm the same way. I've never really worked a job in the service industry that did tips, but I empathize with them and usually take care of them even if the service is substandard.

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Re: jlcollinsnh - Stock Series

Post by 305pelusa » Sat Jan 25, 2020 11:07 pm

Read the book and disliked it quite a bit. It just says to buy VTSAX until you need some bonds (at which point, you could buy some VBTLX).

The lack of International diversification isn't terrible (many do that on this very forum). But he has a chapter on tax-advantaged accounts where he says IRA/401ks are the best with taxable afterwards but that Roth IRAs were not very good. Something like "IRAs let you take deductions to invest more in the market and hence make more money".

At that point I paused the audiobook and returned it. I don't think the fella knows what he's talking about.

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Re: jlcollinsnh - Stock Series

Post by anon3838 » Sun Jan 26, 2020 12:14 am

I love Bogleheads. This is a good place to learn from really smart and reasoned investors who are patient and willing to explain the mechanics so that others may have a better understanding.

I also love JL Collins because he keeps it really simple and does not get too deep into the mechanics. I think there are a lot of investors who don’t need or want to know how a clock works, they just want to know the time. He may reach those investors.

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Re: jlcollinsnh - Stock Series

Post by Teriyaki » Sun Jan 26, 2020 5:12 am

ThereAreNoGurus wrote:
Sat Jan 25, 2020 10:47 pm
wrongfunds wrote:
Sat Jan 25, 2020 5:59 pm
Very entertaining author!

I wish he had provided source for the following assertion that he made
So profitable are they, there are actually more mutual funds out there than there are stocks. You read that correctly. Yeah, I’m amazed too.
Is it that hard to use google?

For the US:
Number of mutual funds: https://www.statista.com/topics/1441/mutual-funds/
Number of stocks: https://www.wsj.com/articles/where-have ... 1510869125
I've always found it curious that people are surprised by this fact. It's like being surprised that there are more recipes for foods than there are ingredients.

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ThereAreNoGurus
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Re: jlcollinsnh - Stock Series

Post by ThereAreNoGurus » Sun Jan 26, 2020 11:30 am

Teriyaki wrote:
Sun Jan 26, 2020 5:12 am
ThereAreNoGurus wrote:
Sat Jan 25, 2020 10:47 pm
wrongfunds wrote:
Sat Jan 25, 2020 5:59 pm
Very entertaining author!

I wish he had provided source for the following assertion that he made
So profitable are they, there are actually more mutual funds out there than there are stocks. You read that correctly. Yeah, I’m amazed too.
Is it that hard to use google?

For the US:
Number of mutual funds: https://www.statista.com/topics/1441/mutual-funds/
Number of stocks: https://www.wsj.com/articles/where-have ... 1510869125
I've always found it curious that people are surprised by this fact. It's like being surprised that there are more recipes for foods than there are ingredients.
Good point and good analogy!
Trade the news and you will lose.

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Re: jlcollinsnh - Stock Series

Post by Rowan Oak » Sun Jan 26, 2020 5:12 pm

305pelusa wrote:
Sat Jan 25, 2020 11:07 pm
Read the book and disliked it quite a bit. It just says to buy VTSAX until you need some bonds (at which point, you could buy some VBTLX).

The lack of International diversification isn't terrible (many do that on this very forum). But he has a chapter on tax-advantaged accounts where he says IRA/401ks are the best with taxable afterwards but that Roth IRAs were not very good. Something like "IRAs let you take deductions to invest more in the market and hence make more money".

At that point I paused the audiobook and returned it. I don't think the fella knows what he's talking about.
He explains the pros and cons of each here: Stocks — Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets

He's generally speaking to investors who reach financial independence early and use the following strategy:

Step 1: Contribute to a Traditional IRA During Your Working Years
While you are working, your tax rate will likely be higher than it will be after FI so shield as much of your income from the taxman as possible by contributing to a Traditional IRA.

Step 2: Slowly Convert Traditional IRA to Roth IRA
Once you begin your early retirement, you’ll have less taxable income than you did when you were working so use this period to convert your Traditional IRA to a Roth IRA.

You didn’t pay tax on the money when you contributed to your Traditional IRA so you have to pay tax when you convert to a Roth. Your income will be lower after you retire though so you’ll likely pay very little tax on the conversion. In fact, if you convert an amount equal to your deductions, exemptions, and credits every year (and assuming you have no other ordinary income), you could execute these conversions without paying any tax at all!

Step 3: Enjoy Your Completely Tax Free Retirement Money
After converting your entire Traditional IRA to a Roth IRA during your early retirement, you can withdraw that money from the Roth tax free!

Note: To avoid paying a 10% early-withdrawal penalty, you have to wait five years after the conversion (or until you turn 59.5, if that’s sooner) to withdraw the converted funds from the Roth.

How is This Possible?
This strategy is referred to as a Roth IRA Conversion Ladder and you may be wondering why everyone doesn’t do this.

Well, there are a few reasons this strategy only makes sense for early retirees…

Low Income and Living Costs
Most early retirees live on a modest amount of income from tax-efficient sources like long-term capital gains and dividends (which are taxed at 0% when you’re in the 15% tax bracket or below). This means they can use their tax-free space (i.e. deductions and exemptions) for things like Roth conversions.

Long Conversion Timeframe
Conversions from a Traditional IRA to a Roth IRA are taxed as ordinary income so it’s beneficial to spread the conversion over a large timeframe. That way, you don’t increase your taxable income too much in any given year.

Since most people work full time until they reach retirement age, they never have periods of lower income to do these conversions cheaply. Any amount converted while working would increase the amount of tax they have to pay at their marginal tax rate and wouldn’t be worthwhile.

more here: https://www.madfientist.com/traditional ... -roth-ira/
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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305pelusa
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Re: jlcollinsnh - Stock Series

Post by 305pelusa » Sun Jan 26, 2020 7:07 pm

Rowan Oak wrote:
Sun Jan 26, 2020 5:12 pm
305pelusa wrote:
Sat Jan 25, 2020 11:07 pm
Read the book and disliked it quite a bit. It just says to buy VTSAX until you need some bonds (at which point, you could buy some VBTLX).

The lack of International diversification isn't terrible (many do that on this very forum). But he has a chapter on tax-advantaged accounts where he says IRA/401ks are the best with taxable afterwards but that Roth IRAs were not very good. Something like "IRAs let you take deductions to invest more in the market and hence make more money".

At that point I paused the audiobook and returned it. I don't think the fella knows what he's talking about.
He explains the pros and cons of each here: Stocks — Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets

He's generally speaking to investors who reach financial independence early and use the following strategy:

Step 1: Contribute to a Traditional IRA During Your Working Years
While you are working, your tax rate will likely be higher than it will be after FI so shield as much of your income from the taxman as possible by contributing to a Traditional IRA.

Step 2: Slowly Convert Traditional IRA to Roth IRA
Once you begin your early retirement, you’ll have less taxable income than you did when you were working so use this period to convert your Traditional IRA to a Roth IRA.

You didn’t pay tax on the money when you contributed to your Traditional IRA so you have to pay tax when you convert to a Roth. Your income will be lower after you retire though so you’ll likely pay very little tax on the conversion. In fact, if you convert an amount equal to your deductions, exemptions, and credits every year (and assuming you have no other ordinary income), you could execute these conversions without paying any tax at all!

Step 3: Enjoy Your Completely Tax Free Retirement Money
After converting your entire Traditional IRA to a Roth IRA during your early retirement, you can withdraw that money from the Roth tax free!

Note: To avoid paying a 10% early-withdrawal penalty, you have to wait five years after the conversion (or until you turn 59.5, if that’s sooner) to withdraw the converted funds from the Roth.

How is This Possible?
This strategy is referred to as a Roth IRA Conversion Ladder and you may be wondering why everyone doesn’t do this.

Well, there are a few reasons this strategy only makes sense for early retirees…

Low Income and Living Costs
Most early retirees live on a modest amount of income from tax-efficient sources like long-term capital gains and dividends (which are taxed at 0% when you’re in the 15% tax bracket or below). This means they can use their tax-free space (i.e. deductions and exemptions) for things like Roth conversions.

Long Conversion Timeframe
Conversions from a Traditional IRA to a Roth IRA are taxed as ordinary income so it’s beneficial to spread the conversion over a large timeframe. That way, you don’t increase your taxable income too much in any given year.

Since most people work full time until they reach retirement age, they never have periods of lower income to do these conversions cheaply. Any amount converted while working would increase the amount of tax they have to pay at their marginal tax rate and wouldn’t be worthwhile.

more here: https://www.madfientist.com/traditional ... -roth-ira/
From that link you posted:
“ Look at it this way. Suppose you want to fund your IRA this year with $5000 and you are in the 20% tax bracket. To fund your deductible IRA all you need is $5000 because, since it is deductible, you don’t need any money to pay the taxes due on it. But with a Roth, you’d need $6000: $5000 to fund the IRA and $1000 to pay the 20% tax due on the $5000. That $1000 is now gone forever and so is all the money it could have earned for you over the years. Were you to fund your deductible IRA instead of your Roth, this $1000 could then be invested rather than going to paying taxes.”

And:
“ Personally I’d be inclined to take the tax benefit today and let that money work for me over the decades.”

And:
“ Fully fund a deductible IRA, rather than the Roth (but keep any Roth you have) unless you are paying little or no income tax. The reason is the money you don’t pay in taxes will compound for you over the decades.”

From the language he uses, it’s not immediately clear to me that he understand that money isn’t really “compounding for you” because it will get taxed at the end any ways. The only reason to use an IRA over a Roth is if you know the tax BRACKET is lower in the future than today. He doesn’t say that at any point. I think he actually believes that if the tax bracket is the same, IRA is superior because that tax deduction “goes to work for you and grows for you” whereas in the Roth, the deductible money “is gone forever”. I think he has a very fundamental misunderstanding as to the compounding and order of taxes.

That’s just my impression. Of course what Madfientist details is very sensible. But that’s not what JCollins is writing, that’s someone else.

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