Money Archives

The Simple Path to Wealth by J.L. Collins: Overview

What is The Simple Path to Wealth about? What advice does J.L. Collins give to beginner investors? In The Simple Path to Wealth, blogger and financial expert JL Collins offers a simple road map to achieving financial independence and a secure retirement: Spend less than you make, avoid debt, save “F-You Money,” and invest in stock index funds. He demystifies stocks and bonds, as well as a plethora of investment plan options. Below is a brief overview of The Simple Path to Wealth by J. L. Collins.

Getting Started With Investing? Ask Yourself This

Do you want to get into investing but aren’t sure where to start? Do you need professional financial help to get started? Investing doesn’t have to be complex. People selling investments profit by making them complicated—they convince you that you need professional help to get started with investing. Yet the actively managed funds they sell are costly and underperform index funds. According to financial blogger J.L. Collins, getting started with investing only requires answering three questions and applying three wealth-building tools (stocks, bonds, and cash). We’ll consider Collins’s three questions for beginner investors and the wealth-building tools below.

How to Be Rich and Successful: Think, Will, Act

How do you master how to be rich and successful? What can prevent you from getting on the path to riches? You master how to be rich and successful by thinking and acting the right way. You must have the conviction that you will achieve success in life, and act in a way that sets you up to be successful. Ignorance, mental laziness, and negative thoughts about poverty can stop you from working towards riches. Read on to master how to be rich and successful.

J.L. Collins: How to Balance Your Investment Portfolio

Do you want to get into investing? What factors should you consider as you decide what to do with your investment money? How much risk should you incur? Two stages in your investing life determine the mix of assets in your portfolio: the wealth accumulation stage, and the wealth preservation stage. According to financial blogger J. L. Collins, if you are young, you should focus on accumulating wealth. When you are approaching the retirement age, you should focus on preserving it so you can continue to live on it. Once you’ve determined your investment stage and allocated the desired percentages

Bond Investment: The Risks and the Benefits

Are bonds a high-risk investment? What are the key risks associated with bond investing? When you buy bonds, you are loaning your money to a company or government entity. Although bond investing is generally viewed as safer than stock investing, it has several risks. In this article, we’ll take a quick look at the major bond investment risks you should know about.

Tax-Advantaged Accounts: What You Need to Know

What are tax-advantaged accounts? What kind of financial assets should you use a tax-advantaged account for? Tax-advantaged accounts are tax-deferred or tax-exempt. You should use these accounts, such as IRAs and 401(k)s, for holding tax-inefficient assets (e.g. bond funds that generate taxable interest, actively managed stock funds, CDs, and REITs). They pay interest and non-qualified dividends and produce capital gains distributions. Below, we’ll take a look at the basic types of tax-advantaged accounts and their key characteristics.

Beta Risk: How Systemic Risk Yields High Returns

What is a beta risk? What is the difference between systematic vs unsystematic risk? Does this particular kind of risk involve higher premiums? The key characteristic of systematic risk, better known as “beta risk” is that it cannot be diversified away by having a diverse portfolio. And researchers found that because it can’t be diversified away, beta risk is the only kind of risk that pays a “risk premium”—that is, a higher return for the higher risk. Keep reading for more about beta risk, and whether it actually leads to a higher premium.

The 4 Investing Mistakes Beginners Should Avoid

Are you considering getting into investing? What are the most common investing mistakes beginner investors tend to make? In his book The Simple Path to Wealth, blogger and financial expert J. L. Collins warns new investors of four pitfalls they should know about before investing their hard-earned money. These include financial advisors, winning stocks, dollar-cost averaging, and common investment cons/scams. In this article, we’ll look at four pitfalls investors should beware of, starting with financial advisors.

Firm-Foundation Theory vs Castle-in-the-Air Theory

What is firm-foundation theory? How is it different from castle-in-the-air theory? How do they differ and which is the best stock valuation method? There are two primary stock valuation methods. Firm-foundation theory states that assets have an “intrinsic value” based on the value of current dividends and estimated potential in the future. The idea here is that the stock will always regress to the intrinsic value. The castle-in-the-air theory has a different approach, stating that a stock is worth what people are prepared to pay for it. Keep reading for an in-depth look at firm-foundation theory and castle-in-the-air theory.

Fundamental Analysis and Investing: Does It Work?

What does a fundamental analysis of investing options involve? Does this method of stock valuation work? Fundamental analysis is a method of stock valuation that uses in in-depth study to determine a stock’s value. Fundamental analysis of investing options takes into account a number of factors in addition to past price movement, including revenues, growth rate, and management skills. Find out more about fundamental analysis and investing below.