TLDR:
Overall book was informative earlier and summary but middle part was utterly boring.
Rating 2.5/5
Summary:
The Author has come up the hard way. He believes in a debt free life and says it is important to get unchained from unimportant distractions like owning a big house, convertible cars etc. Asks people to prioritize needs over wants and write clearly why they are investing money in something big and it will help clear out things. Author has even taken breaks at varying intervals to travel europe by bikes, raise his daughter and then start his own company. He says clarity of thought and focus is important than being nervous and stressed. Collins now has his own company and his own destiny of hybrid work , gets up at 4.30 to bike have a coffee and even can work from remote islands and different time zones. His tips for debt particularly important - says debt trap leads people to more stress, unhealthy lifestyle. Causes families to separate, bad habits to take form and place and pushes people to slave to their choices.
Rule of thumb for debt don’t take a debt unless u really really have to and choose wisely like a business debt , student debt or mortgage debt and if this is really going to be useful and take you to the next step . If interest rate less than 3% no panic take it easy, 3-5% be on alert and try to finish it soon whenever there is chance. Above 5% its red and P0 stop everything and finish this debt at all costs . Housing loans don’t go by what real agent or property manager recommend. Write down your wishes, capacity of ceiling and firmly stick to it - don’t even go an inch beyond as it is easy to lose your way for good. Collins says money is relative , people with 800K annual bonuses can still burn through all of them in 6 months with debt and lavish life choices. Mike tyson famously went broke despite getting 5 million dollars a year , same is the case with Johnny depp and Boris becker - their understanding of wealth is just one thing 'spend freely' and there is no room for savings or plannings that is the fallacy.
3 mantra for becoming wealthy sounds simple but darn difficult to execute : Don’t fall into debt trap cant stress enough, Spend less than your income, Invest wisely. Collins is rich despite being unemployed for 3 years post 9/11 as he did all the above stringently. Focus your priorities on the least needs in everything car, school, home, gadgets. He cites an example of a parent who bought a very expensive video camera to record his child's every move and said that is mandatory to raising a child (when it clearly is not) . This misplaced notion of needs, peer pressure and social status is what makes many people fall into bad choices. Collins says that 'The markets will always go up' . Be ready for some winter blizzards along the way like 1987 big bear dip or the 2008 unprecedented crash however net net market grows at 11.9-12% every year , he goes on to say how anyone who put 1000$ in the market in 1975 in 2015 will get 90k$! Collins says don’t go with panic trends and crashes here and there - stay the course even with a dash of panic for sides. Market is for long term bets and not for short high stakes is his argument. Collins has been steadily investing in long term trends and betting in the market to stay rich. See dips like 2008 as a colossal opportunity to invest and buy like crazy on steady firms.
Put your eggs in one big basket that is diverse is the author's theory for wealth building , hes a big advocate of Vanguard funds particularly VTSX as he deems it diverse enough within their remit. 401K funds like Fidelity provides same control to diversification with added benefits of Employer match and Tax benefits so he wants people to fully use it and barring rarest of rare events like nuclear war, meteorite, volcanic eruptions etc the funds should be safe and only grow further. Mutual funds is another area the author forays but deems its more risky than VTSX. Wealth managers , brokers often look for their own interests and suggest complicated plans that always look tempting but catch is certain. Try to avoid middle men and do your own research worth the time totally. Warren buffet by 2013 suggested 90% funds into vanguard index for good dependable returns ...
The author's family stick to multiple diverse portfolio in VTSX and wholeheartedly recommend it multiple times repeatedly. The author says he doesn’t have any vested interests with vanguard but it makes you highly suspect it , albeit to his credit he says Fidelity is another similar option. Author warns us to do the legwork yourself and says there are hundreds nay thousands of scammers and people have lost all their wealth overnight due to poor choices and wrong pursuit. Most of what he says about index funds, mutual funds, stocks is not to be followed as the math and rules are always changing so best to read it up for current situations.
The most enlightening summary of the book comes in the penultimate chapter as 10 year plan advise for author's kid post college , if you can skip the book entirely and just go straight to that chapter to me that suffices. Talks about being fiscally prudent, working hard and with purpose, diversifying investment esp. VTSX, Do not buy house unless its absolutely necessary and settled, marry spouse who is fiscally prudent, Travel on budget, live frugally and within means, Try and explore different ventures by being brave so you discover your calling, Pension / 401k fund must and do not take debts.
