The simple path rules

The Simple Path to Wealth began as letters JL Collins wrote to his daughter, and its central advice fits in one line. Spend less than you earn, because the gap is the raw material of every financial goal. Invest that gap in something simple and cheap, which for Collins means a broad stock-market index fund held for decades, so you own a small piece of the whole market instead of betting on single companies. And avoid debt, which works directly against the first two. The book names specific American funds and retirement accounts; those products are US-specific, and this page does not recommend any investment. The principle travels: a high saving rate, low costs, broad diversification and patience. Collins is also blunt that markets fall hard from time to time and that the investors who do best are often the ones who do nothing during a crash. Anyone applying the idea elsewhere has to check what low-cost, diversified options exist locally, along with currency and inflation risk.