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"The Simple Path to Wealth" - What to Do With Your Encore Income Once You Earn It

The financial services industry wants you confused and dependent on their fees. JL Collins isn't having it.

Here's what I appreciate about The Simple Path to Wealth: JL Collins doesn't have a course to sell you. He's not building a coaching program. He's not affiliated with any investment platform.

He's just a guy who achieved financial independence using a straightforward index fund strategy, and he wrote a book explaining exactly how he did it.

No upsells. No complexity. No hidden agenda.

In a financial world drowning in conflicts of interest and manufactured confusion, that's rare. And valuable. Especially when you're trying to close a six-figure retirement gap.

The Problem With Most Investment Advice

Let's be honest about how the financial services industry works.

Financial advisors charge 1-2% annually to manage your portfolio. That seems small until you realize that over 30 years, those fees can cost you hundreds of thousands of dollars in lost compound growth.

And what do you get for those fees? In most cases, performance that underperforms simple index funds. Because actively managed funds, after fees, typically don't beat the market.

But the industry doesn't want you to know that. They want you to believe investing is complicated. That you need their expertise. That "set it and forget it" is reckless.

Collins calls BS on all of it.

And when you're building Encore Income specifically to close your retirement gap, you cannot afford to lose 30-40% of your growth to unnecessary fees.

The Core Strategy: Boring and Effective

Here's Collins's entire investment philosophy in one sentence:

That's it. That's the strategy.

You invest consistently in a low-cost total market index fund. You ignore the noise. You don't try to time the market. You don't panic during downturns. You let compound growth do its thing over decades.

It's so simple it sounds like it can't work. But the data is overwhelming: This approach beats 80-90% of actively managed funds over the long term.

And when you're trying to close your Freedom Number gap, you need every percentage point of growth you can get.

What Makes This Book Different

Collins doesn't just tell you what to do. He explains why it works, backed by historical data and market mechanics.

The book covers:

• Why index funds beat active management (lower fees, tax efficiency, market capture)
• The 4% rule (how much you can safely withdraw in retirement—this is what your Freedom Number is based on)
• Asset allocation (stocks vs. bonds based on your retirement timeline)
• Tax optimization (Roth vs. Traditional, tax-loss harvesting)
• Debt elimination (why high-interest debt kills wealth building)
• Financial independence math (the exact numbers you need to retire)

But here's what I really appreciate: Collins wrote this book as letters to his daughter. The tone is conversational, not academic. He explains complex concepts in plain English without dumbing them down.

You don't need a finance degree to understand this book. You just need to be willing to question what the financial industry has been telling you.

The Financial Independence Framework

Collins is a foundational figure in the FIRE movement (Financial Independence, Retire Early), and this book lays out the math behind financial freedom.

The concept is straightforward—and it's the same framework your Freedom Number is based on:

Now, you might be thinking: "That's great, but I'm 45 and haven't saved $2 million. What's the point?"

Here's the point: Even if you're not retiring early, the principles still apply. Every dollar you invest using Collins's approach compounds efficiently. And if you're building Encore Income through consulting or advisory work, you can accelerate that growth dramatically.

Why This Matters for Closing Your Freedom Number Gap

Let's connect the dots.

You've calculated your Freedom Number. You're building Encore Income through consulting or advisory work. Maybe you're generating $50K-$100K+ annually in supplementary income.

Here's the question: What are you doing with that money?

If you're spending it, you're trading time for consumption. If you're investing it in actively managed funds with high fees, you're giving away 30-40% of your potential growth.

But if you're investing it using Collins's approach—low-cost index funds, consistent contributions, long-term hold—you're building a compounding machine that works even when you're not.

The Math That Matters for Your Retirement Gap:

Let's say your Freedom Number gap is $3,000/month ($36,000/year). Using the 4% rule, you need to build approximately $900,000 in assets.

That's a 2-year difference in your retirement timeline. And you save $173,000 in fees. That's real money that closes real retirement gaps.

The Parts That Hit Home for Retirement Planning

On market crashes: Collins doesn't sugarcoat it. Markets will drop 30-50% occasionally. It's not a matter of if, but when. But he shows you the historical data: Every crash has been followed by recovery and new highs. Panic selling is how wealth gets destroyed.

This matters when you're in your 50s building retirement assets. You don't have 30 years to recover from panic selling. Collins shows you how to weather crashes without derailing your retirement timeline.

On financial advisors: He's not categorically against them, but he's clear about the math. A 1% annual fee might not sound like much, but over 30 years it can cost you 25-40% of your final portfolio value. When you're trying to close a retirement gap, you cannot afford that.

On lifestyle inflation: Most people earn more and spend more, never building wealth. Collins advocates for keeping your expenses stable as income rises, investing the difference. This is exactly what you need to do with Encore Income—invest it, don't spend it.

What I Don't Like

I'll be honest about the limitations.

This book is heavily focused on Vanguard funds, particularly VTSAX. That's not a problem—Vanguard is excellent. But Collins could acknowledge equivalent options at Fidelity and Schwab more thoroughly.

Also, the book is U.S.-centric. If you're investing internationally, you'll need to adapt the strategy to your country's tax laws and available funds.

But these are minor quibbles. The core principles are sound regardless of which broker you use or where you live.

How This Connects to Your Freedom Number

Building Encore Income is one side of closing your retirement gap. Investing that income intelligently is the other.

Your Freedom Number Calculator shows you the gap. Your consulting or advisory work generates the money. Collins shows you how to make that money work for you without getting fleeced by the financial industry.

This is how corporate professionals close retirement gaps and build actual financial independence—not through get-rich-quick schemes, but through smart income generation combined with disciplined, low-fee investing.

The Bottom Line

Is this book going to close your retirement gap next year? No.

Is it going to give you some magic investment hack that beats the market? Also no.

But will it give you a clear, data-backed strategy for building wealth without getting exploited by the financial services industry—so your Encore Income actually closes your gap instead of getting eaten by fees?

Absolutely.

Over 1 million copies sold. Foundational to the FIRE movement. And unlike 99% of financial advice, Collins has nothing to sell you except the book itself.

If you're serious about closing your Freedom Number gap, this book is essential.

Fortune favors the bold. But fortune also favors those who understand compound growth and refuse to pay unnecessary fees that delay their retirement.

— Scott Fulbright

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