Mindy: Happy New Year, my dear listeners, and welcome to the BiggerPockets Money Podcast. Today, we are talking to the godfather of financial independence and international bestselling author, JL Collins.
Scott: That’s right. We’re going to be talking about his new book, Pathfinders, which is a sequel or really companion novel to, or companion novel, companion book to The Simple Path to Wealth. You’re going to be hearing about the framework JL recommends to reach FI after he’s collected hundreds of stories to compile in this book.
Scott: And why are we doing this right now? Well, with the start of the new year, we wanted to bring one of our favorite all-time guests and serial author now to discuss the path to FI and his new book, share all of these different journeys and hope that that inspires you with your New Year’s goals and resolutions around reaching FI.
Mindy: Hello, hello, hello. My name is Mindy Jensen, and with me as always is my finding his own path co-host, Scott Trench.
Scott: Always a pleasure to navigate the journey to financial independence with you, Mindy.
Mindy: Scott, without further ado, let’s bring in J. L. Collins. J. L., welcome to the BiggerPockets Money podcast. I am so excited to talk to you today.
Guest: Well, thank you, Mindy. I’m excited to be here. I appreciate the invitation.
Mindy: J. L., we first spoke to you way, way, way back on episode 20, and then again on episode 116 and 285. But for our new listeners or just a reminder for our audience, how did you initially get involved in financial independence?
Guest: Oh, great question. I, uh, I started writing my my blog, JL Collins NH. com in 2011 and and I really had no intention of starting a blog. It was just a way to archive some letters that I had been writing for my daughter. I’d managed to turn her off to all things financial by pushing it too soon and too hard. And I want to make sure the information was available to her, if and when the time came, she was ready to hear it, uh, and even if I wasn’t around. And a friend suggested that I I put the stuff on a blog. And I thought, that’s a great way to archive it. I barely knew what a blog was. I never dreamed it would develop an audience. But, uh, that was that was the beginning. And of course, none of my friends or relatives cared about it, but it started developing a a readership outside that circle.
Mindy: I think all bloggers can relate to that. Your friends in real life are like, yeah, we don’t care. Oh, sure, I totally read your blog every day. They’ve never even typed it in.
Guest: Exactly.
Scott: You know, you compiled a lot, I think a lot of that work inspired, you know, a classic in the financial independence world in The Simple Path to Wealth, which has been, you know, read millions of times now. Is that right? Millions?
Guest: Well, it’s sold almost 700,000 copies at this point. So, it’s probably fair to say it’s been read at least a million times, because people pass it around and they get it out of the library and that sort of thing.
Scott: Awesome. So, phenomenal, it’s it’s a classic. We recommend it all the time. In fact, we recommend it just the other day to another podcast guest because it’s just such timeless classic, awesome advice here. Um, but today we want to talk about a new book that you wrote and where I think that’s informed by the success of the simple path to wealth, maybe the relationships you formed with your audience over time. Can you tell us a little bit about Pathfinders?
Guest: Yeah, so Pathfinders is a book that has been in the back of my mind to do within a year of the simple path to wealth coming out because I wrote the simple path to wealth for my daughter, as I alluded to earlier in starting the blog. And, so it’s it’s very specific. It’s, you know, she’s an American, she was in college at the time, at the beginning of her journey. And within months of the simple path to wealth coming out, I started to hear from people who read it from all over the world and from all different stages of their life, and they were taking this this kind of specific book and adapting the principles and lessons to their own unique situations. And I just thought that was incredible. Is that it’s a collection of just about 100 stories. Uh, again, from all over the world, all different, uh, kinds of people at different stages of their own journey, talking about how they’ve applied the lessons from the simple path to wealth and where they are on that path. Everywhere from kind of near the beginning to already fully financially independent and and, you know, what
Mindy: I think a large number of people who discover the concept of financial independence but aren’t really on the path or, you know, are on the path but just at the beginning, find that it can be a little daunting with these large numbers that need to be invested in order to get to financial independence. How does Pathfinders help answer this question and potentially uh, allay some of the anxiety about being able to reach these goals?
Guest: Yeah, that’s a great, great point Mindy because if you’re at the very beginning, it can look very intimidating. And the first thing I tell people is that it’s a journey. It’s not an on-off switch. And the moment you start down the path, the moment you start getting rid of your debt, if you have it, uh, and saving and investing if you don’t, or once that debt’s blown out, you get a little bit stronger than you were the day before. And so it’s not like you have to wait to the end to enjoy the benefits that come from being just on the path. Uh, and the stories in Pathfinders really illustrate that because as I mentioned, there are some people, there’s some stories from people that have come to the end of their journey, but the vast majority of stories are people that are at some stage of their journey. And they talk about, you know, what it’s meant to them and and how they got there and and how it’s enriched their life. So, I think it’s it’s for somebody who’s contemplating uh, maybe starting down the path of being financially independent. I think it’s a pretty inspirational book filled with with uh, pretty inspirational stories. In fact, one of the questions I got uh early on was should people read The Simple Path to Worth to Simple Path to Wealth first uh, before Pathfinders? And I thought about that and I said, no, I think you can really read either one of them first. But then the more I thought about that question, the more it occurred to me that actually Pathfinders is probably the better introduction to this. Because, you know, I could not have written Pathfinders, obviously, without The Simple Path to Wealth. I wouldn’t have the stories. But Pathfinders really talks about how accessible this is, no matter where you’re starting from, no matter what your initial starting point is. One of my pet peeves is the pushback against the financial independence community that says, “Oh, that sounds wonderful, that sounds good, but that’s only for people who have very high salaries and have certain kinds of tech jobs or engineering jobs.” And that was never my experience as I met people in in in this community. And when you read through Pathfinders, yeah, there’s a couple stories from people like that. But the vast majority of stories are from people who are not at all like that, and and who come from very humble beginnings. There’s a story in there, for instance, from a guy who was a child migrant laborer, you know, picking asparagus in the field. Uh, you know, there’s a story from somebody who says, you know, when I was a kid, the rich people were the ones that had flush toilets. So it doesn’t matter how humble your beginnings are, your starting point, this is a path that has worked for other people and can work for you.
Scott: Well, one of the things that I noticed here is you know, not all the stories are people who have completed the journey to financial independence as well. So you have people who start from a variety of different positions and you also have people who are at various points along the journey. And to your point earlier, you’ve highlighted how um, the benefits you don’t have to wait until the very end of the journey to get some of those benefits. What were some of the what were some of the the the stories that stuck out to you in terms of the life-changing outcomes that even just a few years down the path um really had on some of those folks?
Guest: Oh, I I mean it’s it’s kind of all of them because most of them are are you know, people that are at some point along along the journey, but you know, the stories that that that the some of them that stick out to me, obviously the first two I I mentioned about the child migrant laborer and the and the flush toilets, but you know, there’s a story in there from a guy in Ukraine who is not only following the simple path of wealth, but he has a podcast, which by the way, he was kind enough to invite me to be on for other Ukrainians who are following this path. And you know, their country’s at war. They’re they’ve been invaded. Um, so I mean, I I I love a story like that because it just illustrates anybody can do it. It almost doesn’t matter what your circumstances are. There’s a story in there from a guy in the middle of Russia, you know, his country is an international pariah. You know, there are huge economic sanctions against Russia because they invaded Ukraine. Makes it extraordinarily difficult to to try to build wealth, but you know, he’s he’s figuring out ways to do it in spite of those obstacles. And again, this speaks to my heart because you know, one of my pet peeves again is the people who say, oh, you know, that this can’t be done unless you start from some privileged position. Uh, or you know, that sounds wonderful, but you know, I’d have to give up my least luxury cars and my Mc Mansion and that’s just that’s just too hard and you know, when you read these stories, you realize, no, you can choose not to do. In fact, I’ve said if you read there’s a risk in reading Pathfinders, especially if you’re a naysayer, because if you read Pathfinders, you will never again be able to look in the mirror and say this can’t be done, because there just too many great stories of people who are in fact doing it. You’ll still be able to say I choose not to do it, but you won’t be able to say I can’t do it, do it.
Scott: Well, one of the things that I’ve noticed, you know, we always whenever we’re talking to somebody here on the BiggerPockets Money podcast about their journey with money, there’s always a catalyst moment that I’m looking for. Like, what was that moment where you, you know, sometimes it’s an evolution, a process. Um, many of the stories, I think in Pathfinders, cite The Simple Path to Wealth as that aha moment for them. But excluding that, what are some of the aha moments that you’ve seen in those stories? Like what are the the the drivers that prompt the change of behavior and the journey beginning of the journey down the path to financial independence?
Guest: Wow, that’s that’s that’s a tough one because you’re testing my memory. I I think, you know, there are situations where, you know, people uh find themselves in a in a difficult situation. Maybe they’ve they’ve uh come across hard times, but you know, most of them, because they’re talking about where they are in the journey, are talking about the the results of of the benefits of having done this. I mean, there’s a story in there of someone, again, this is someone who’s not fully financially independent, but was hit with some major medical issues. And talking about how challenging dealing with those were, and what a tremendous relief it was to not have to worry about money in that context. You know, because if if you if you haven’t begun to to build a financial suit of armor, so to speak, uh, and you get hit with something like that, well, now you’re not only you’re not only dealing with the health issue that that is affecting you or a family member or whatever, but you have to deal with all the financial ramifications around that. And and so being on a on a path to to building wealth and resources is just incredibly powerful. Uh, you know, people talking about how they, there’s there’s a guy who’s a skibum basically, and he talks about how, you know, he works in a restaurant. I I think he’s a server, and how in three months he can not only make enough to live on for the rest of the year, but he’s also putting money aside to build his his his wealth to, you know, to ultimate financial independence. And of course, the secret is he just lives very cheaply. You can appreciate he house sacks is is one of the things, you know, and he just hasn’t got caught up in buying a lot of stuff. So he’s got this incredible lifestyle that that this this approach walking the simple path to wealth has has provided. So yeah, just about everybody who’s in Pathfinders, almost by definition, started by reading the simple path to wealth and and applying the the the lessons that are in that book.
Mindy: One of the things I like so much about Pathfinders is that it isn’t just, and this is, you know, the stereotypical FI follower is the tech bro who makes a ton of money and then just spends less and invests the rest. And I feel kind of hypocritical saying this because we reached financial independence because my husband is a tech bro who made a lot of money and we didn’t spend very much. But I like that there’s so many different stories with different circumstances because, you know, in the beginning of my financial independence media participation, that’s all I heard was people who were making like $180,000 and they were saving 50% of their income. Oh, wow. How did you do it? Like that’s that’s not really such an impressive story. It’s still an impressive story because, you know, in America, you spend everything, so the fact that you’re not spending everything and instead are thinking about the future is great. But when you’re only spending $60,000 and then of your $180,000 paycheck, wait, that doesn’t right, that’s not right. Well, whatever, if you’re only $90,000 of your 180 paycheck and then you’re you’re uh investing $90,000, that’s you’re like, well, I only make $45,000, so I guess this isn’t for me. And then you go away and and this is this book is showing that, hey, you can do it. And you know, it’s not just rich people that can do it. You can be making a whole lot less and still pursue financial independence and, you know, honestly, you’re not going to get there as fast as the guy who’s saving $90,000 a year, but you can still get there. And that’s I think it’s really encouraging to show people and, you know, me telling you, hey, you can do it is not nearly as powerful as reading a real life story of somebody who did it and and seeing that yeah, somebody in my circumstance can do this too. That’s uh, I I just I really love this book, Jim.
Guest: Well, well, thank you. I mean, I’m I’m glad it resonates and I do I, you know, now that it’s been out for for a while, I I’m hearing that kind of feedback. And I absolutely agree with you. I as I think I said a little bit earlier, I one of my pet peeves has always been this concept that, oh, this is only for wealthy engineers and just FI path. And that was actually not my experience when I as I when I first started writing in in this FI community and starting to get to know people. I certainly met people like that, including you and Carl, but I met a lot of people who are not like that. I think what the naysayers lose sight of or people who become intimidated by this is that achieving financial independence is not just a function of of accumulating a certain amount of money. There’s not a magic amount of money. It’s a balance between how much you have, how much you accumulate, and how much you need, right? And the less you need, the less you need to accumulate. So, for somebody who’s making $45,000 a year as an example, uh, you know, to replace that income, they’re not going to need as much as the person making $180,000. So they will probably get to what they need at about the same time that the that the higher income person will get to what they need. It’s not like everybody needs two and a half million dollars, which is throws off $100,000. So it’s it’s very much a balance between what you have and what you need. And the less you need, the stronger you are financially. You know, obviously the more money you have, the stronger you are financially, but the other side of that equation is the less you need, the stronger you are financially. Going back to that ski bum waiter, you know, he’s constructed a life where his financial needs are very minimal. So he he only has to work three months out of the year and and not only can he ski the rest of the time, but he’s also building wealth.
Mindy: You just said the less you need, the easier this is to accomplish and the faster you can accomplish this. So for somebody who is listening who spends every dime they make, how do you need less?
Guest: That’s a huge challenge. In fact, I’m I’m I’m very grateful that personally I never fell into the the trap of lifestyle inflation and and I’m very grateful that my daughter so far has avoided it because it has to be extraordinarily difficult to have constructed a certain kind of expensive lifestyle and then to unwind it. Uh, you know, one of the stories that I like to tell around this idea that that uh, you know, only high income people could achieve financial independence is my experience. I’ve known a lot of people who make a lot of money and they’re not all financially independent. And I know a lot of people who made very modest amounts of money who are. And one of my favorite stories along those lines is back in the early 1990s, I was in Chicago having lunch with a friend of mine who, uh, was in the financial business. He had just gotten his bonus check for $800,000. Uh, a bonus, you know, in that business is a big part of your income, but it’s not all of it. So I don’t know, maybe his income was a million two or something. You know what we talked about at lunch? We talked about how an $800,000 bonus was not enough to make ends meet. Now, I can I can see Mindy, your your, you know, your jaw’s on the floor. Uh, my jaw, frankly, was on the floor. I imagine for a lot of our listeners, they’re having the same react. A lot of people are probably saying, “Man, pay me 800 grand for one year and I’m done.” But when I sat at lunch with my friend and he walked through the lifestyle he’d created, you know, the the least luxury cars, the multiple houses, the private schools, the exotic vacations. And you start totalling that up, and you realize that he’s he was right. He is actually not making enough money to support the lifestyle he’s put together, let alone begin to build financial independence. So you say, how the hell can somebody making say a million two not already be there? Well, that’s how it’s it’s the lifestyle you create. And he will never be there unless he makes significantly more money and resists spending that extra money, or he reconstructs his his life to to bring it back to a more reasonable levels of spending. Um, by the same talk token, I’ve known people who have never made more than $40,000 a year who are financially independent, again, based on that formula of what their needs are.
Scott: The lesson there is that boating is a rental sport. No, it’s just amazing though. It’s it’s about it’s about what you you know, and and it comes down to spending, your spending, I think, you know, I think Pathfinders validated this for me is it’s not always, it’s there’s always a factor, right? It’s income, spending, and how you invest. But spending overwhelmingly seems to be the most important variable among the people who actually get to financial independence and have a stable portfolio that they can sleep well at night around. Has that been your experience as well, Jail?
Guest: Yeah, I would I would say that’s true. It’s only been my personal experience. So when I came out of college in the in 1972 and it took me two years to get my first professional job because the 70s were a very difficult economic time with stagflation and all that kind of stuff. But, uh, I just arbitrarily said, you know, I’m going to save and invest 50% of my income. There was no internet in those days. There was no, you know, uh, there were no computers for that matter. At least no computers, personal computers. Um, so I didn’t I didn’t have any any any guidelines for this. I was wandering in the wilderness making it up as I went along. But I knew that this was an incredibly important thing to me to have financial freedom. And, uh, and so I arbitrarily arbitrarily decided I was going to save 50%. That savings rate not only got me to FI, but it saved me from some financial mistakes I made along the way because again, I didn’t have any any guidelines for how to do this. I had a I had to learn it all all the hard hard way. And then, you know, one of my first my first salary was $10,000 a year. Well, I knew people who were living on $5,000 in those days, and $5,000 a year was a whole lot more than I’d been living on in college because I put myself through college. So this was not deprivation for me at all. This was a big step up. And then when I was making $20,000 a year, you know, I was saving and investing 10 and I I now was doubling the amount of money I was living on, my lifestyle money. And when I was making 50, you know, 25 and 25, and 100, 50 and 50 on on up the scale as as as my career progressed. I in fact, I’ve come to start saying, you know, I I have spent every dime that has ever come into my possession, and I’ve spent it almost the moment I got it. The difference is that I spent half of those dimes on the thing that was most important to me, which was my freedom. And I think everybody does that in their own life. They spend their money on the things that they think are most important to them. In our culture, a lot of times that’s fancy cars and big houses and, you know, those kinds of things. And I say now that if anybody listening to us or who reads The Simple Path to Wealth or Pathfinders, um, you know, I I don’t necessarily hope that they they follow the simple path. That’s up to them. But I hope that now they know that’s an option. That freedom is something you can also spend your money on. And that maybe for some people, that’s that’s a will be become the more important thing. because if it isn’t the the more important thing, then you’re never going to be financially independent.
Scott: I love it. I think that that’s the most important thing to me. That’s what I’m spending my dimes on, and I wish more people would do it. It’s just the power that comes with it is so incredible to direct the rest of your life and yeah, I at your point, you know, my entire journey has been the same way, right? Where I’ve spent 50% of my my income or less the entire time and it feels like I’m spending a ton now, but it’s still less, you know, it’s just because it’s been ramping up um the entire time I started on such a low base. So, yeah, I I I love that that framework and I think it’s I think it’s super powerful. And it’s another benefit of the compounding. it’s just the spending piece, the buying freedom, whatever it is is such a multiplier effect. I think Mr. Money Mustache put it this way, but it’s like the less you spend, the faster you accumulate and the less your portfolio has to kick off in order to sustain your lifestyle. So it’s like a double, it’s like a double uh factor in in the equation. It’s all after tax, every dollar you don’t spend is after tax uh accumulation for you. Um, so it’s, you know, it’s powerful in that regard. Um, and it just totally derisks your situation. If you spend 50% of what you bring in, even if you get fired and have to take a 20% pay cut at another job, you’re still saving 30%. So you can be way more aggressive. Yeah, you know, you probably are able to, you know, if if you spend 50% of what you earn, here’s another one. You accumulate a year of savings in a year. If you save 10% of what you earn, it takes you nine years for the math works to accumulate one year of saving. So, I mean that multiplier is so huge on this and that also extends to how you invest. A lot of very wealthy people, I think, who earn very high incomes but have very low savings rate, perhaps like your friend with the $800,000 investment, cannot afford to set something aside in an all-stock portfolio and wait 30 years for it to go up, simple wealth. But if he had spent 50% of his income and had a huge pile of, you know, was so confident in the annual cash flows that he had, then he doesn’t have to worry about uh, not being able to access the money until financial independence is reached for a very long time horizon. So it allows him to be more risk, take on more risk associated with the volatility of that investment. So, my rant’s over, and in complete agreement with you.
Guest: I absolutely agree with your points. Well taken.
Mindy: I have a new rant, J. L., let’s talk about the 4% rule. It’s actually a question, not a rant, although I can go off on the 4% rule forever because I’m a huge fan, uh, spoiler alert. But, uh, Michael Kitzis in his article, “How has the 4% rule held up since the Tech bubble and the 2008 financial crisis?” has this fascinating chart that shows your portfolio has a very real chance of increasing after 30 years of the 4% withdrawals to two to nine times the starting balance of 30 years ago. How do you balance the saving with the not saving too much?
Guest: So the the 4% rule is is uh, uh, also something I can go off on a rant on as well. So let let me let me start by saying I I hate calling it a rule because I think that that makes people a little bit crazy and you wind up, you know, I I I read debates now is, well, is 4% the right amount or should it be 3.782, you know, it just, it’s a, it’s a terrible rule. It’s a wonderful guideline, right? So if you go back to the Trinity study, which came out in the 90s, and you look at and they looked at 30 years and different withdrawal rates and different portfolios from 100% stocks to 100% bonds, different different allocation of those two things, you know, that’s where I think the idea of 4% came from because if you withdraw 4% and you adjust it for inflation every year, there is a 96% chance that that money will last at least 30 years. And that sounds like pretty good odds and so I think that’s where the 4% rule came from. But if you really look at those charts, excuse me, if you really look at those charts, what you see is that that in the vast majority of times, not only does the money last 30 years, but it grows. And in a certain percentage of those times, to your point, it it grows incredibly large. Uh, and so what I say to people is anybody, nobody and I don’t think anybody really would do this, but if if you if you chose a 4% withdrawal rate, adjusted for inflation every year and just set it on automatic pilot and never paid any more attention to it, that would be a mistake. It would be a mistake for two reasons. The reason most people focus on is the fact that it does fail 4% of the time. It’s not perfect. And so you could wake up one day and find yourself broke. Nobody wants that. So you need to pay attention and if the winds go against you, you’re going to need to adjust so you don’t end up broke. But the bigger reason to pay attention to it is the fact that the the far more likely scenario is if you just let it run on at 4%, for 30 years, you’re going to wake up and have this huge pile of money that you could have been enjoying over those 30 years. So, 4% is a wonderful guideline, use it as a guideline, it’s a great way to determine whether or not you’re financially independent. If if you apply the 4% rule to whatever you have against whatever you need, it’s a great formula to make that call. But you are going to have to pay attention. Uh, you don’t want to run out of money, which is the 4% chance, but you also want to be aware that the 96% chance that you probably could have taken more along the way and enjoyed your life a little more than you might otherwise.
Mindy: I think it’s really important to note that you have to pay attention. And I’m wondering how many people get themselves to a point of financial independence and early retirement as opposed to traditional retirement, and then stop paying attention. Um, because I don’t I don’t know about you, but my husband is obsessed and goes and checks like his morning routine is sit down at the computer and check every single balance. That’s not my morning routine. I don’t have to pay attention because he pays attention and we talk about it all the time. But this is, you know, this is something that I have found most people that I know in the FI space continue to pay attention even after they stop working. It’s just like, maybe they’re not as obsessed as Carl is, but they’re still keeping an eye on it. And I was actually talking to Pete a couple of years ago and he’s like, you’re not gonna run out of money because if you get yourself to this position, you’re gonna keep paying attention, and then when you’re paying attention, you’ll notice that your balance is starting to go down well before you get to 30 years out and all of a sudden you’re like, hey, why don’t all my checks bounce? You know, you you’re still going to pay attention to it, I think.
Guest: Mindy, I think that’s a great point and that anybody who follows the simple who gets into this FI community and especially if you follow the simple path to wealth, almost by definition, you you’re going to pay attention to this. And this is another reason that that I find the obsession about whether 4% is the right
the correct withdrawal rate to be kind of absurd because, you know, it there’s there’s an underlying assumption that people won’t be paying attention. You know, anybody who has who has the wherewithal and the interest and the knowledge to achieve financial independence or even begin to working towards it, is by definition going to be paying plenty of attention, probably too much attention, like maybe your husband does. Um, and it doesn’t take that much attention. You just have to look at it maybe once a year and say, P, you know, where do where do I stand? I mean, if you had a really bad year like 2022 where the market was down 22%, well, okay, you know, you might want to think about taking a little less money the next year. If you have a great year like we’ve had so far in 2023, uh, you know, then you look at it differently. But you’re right, the kinds of people who would suffer by not paying attention are not the kinds of people who are going to be doing this anyway. So, the kinds of people for whom the following the 4% rule could actually result in in what would still be a very modest risk, they’re not the kind of people doing this. So, you know, yeah, I think it’s a it’s a great guideline. don’t it’s nothing to obsess about.
Scott: The the reason it’s so obsessed about is because the FI community and by definition is kind of obsessed with what is enough. Like what is what is enough, right? And enough is a function of how much you spend or how much you project you want to spend and how much how many assets you need in order to to get to that point. So, you know, the the first question is a personal choice. The second question is as as closely as we can do it, reasonably benchmarked around this 4% concept. and that’s where that that comes down to. What I’ve detected in pathfinders is the understanding and definition of enough among all the people really that that the story the story projects that are on the path. They they have that that definition in place and generally speaking, it’s fairly modest. It’s not this $1.2 million is not covering my needs situation. It’s something much less than that that and clear definition of what what what uh drives happiness. And I think that’s that’s what it’s all about and and then it’s an engineering mindset, which I think is why it attracts so many engineers to back into how many assets do I need to to preserve that. I will also say this about the 4% rule. I have never met a person, I’ve met a lot of financial people. I’ve never met a person who has the 4% rule and nothing else and calls himself and and is actually living the five lifestyle. It has never, I’ve maybe they’re out there. You let me know when when they’re there, but I’ve never met someone who has that and nothing else. No big cash position, no pension from the military, no blog, no book, no uh uh other source of passive income. All of them go well past it. So, guideline or rule, wonderful, whatever, we, you know, it’s in practice not used by people once they actually get to the point.
Guest: Yeah, you know, I I I I would agree. I don’t think I’ve ever met anybody like that either, you know. I think the other thing in Pathfinders, as I’m as I’m listening to you you reflect your observations about it, when we were selecting the stories to go in it, we didn’t eliminate a bunch of, so we didn’t, we didn’t look at stories from high-income earners and say, okay, we’re not going to include those. We’re only going to include stories from people with more modest means. I mean, that was, that was not a metric we used. It’s just that was the kind of stories that were in Pathfinders were pretty much the kind of stories that came to us. And, you know, they were chosen based on on, you know, how cool the story was otherwise. So, you know, there’s, there’s at least one story in there that I can think of offhand that is sort of that, that stereotypical model. It was a couple from Ohio that were software engineers. They went to Silicon Valley. They managed to keep their expenses low. They made the big salaries you could make out there. And then when they accumulated their money, they moved back to Ohio where the living’s a lot cheaper, a little bit of geo arbitrage, and, you know, so there is those, there are those kind of stories in there, but yeah, mostly it’s people who have a have their feet pretty solidly on the ground and they know that spending money doesn’t inherently going to make is not going to make you happy. Uh, owning a lot of stuff is not going to make you happy and but having enough, you know, we all need to have enough and then maybe a little bit extra beyond that. And once you’re there, what more do you need?
Scott: JL, what do what do what do um, some of the, you know, the folks that you interact with? Like what giving, you know, some listeners a glimpse into the folks who completed the journey. What do their day-to-day lives look like by and large once they’ve accumulated this enough and left work? What are some of these examples of things that you find most inspiring or or neat about those folks? Like the Ohio couple.
Guest: One of my very very favorite stories in there is I alluded to this one earlier is from my, my friend Tom. And he was also a case study on the blog. And Tom was a client of mine which is how I, how I know him back in the 90s when we were both in the, I was in the publishing business, he worked for an ad agency. Um, but in Tom’s life, everything went financially wrong. You know, Tom had a couple of expensive divorces. Um, I think he’s got five kids from, you know, the two different marriages. Uh, he he was a very talented, successful guy, but, you know, in the ad agency business is is a business that caters to young people for the most part. So as he got older, he became less and less employable. Uh, he also ultimately lost his house to foreclosure. He went bankrupt. You know, he lost his job and was unable to to to uh, replace it. And at the age of 60, so he’s going bankrupt and and losing his house to foreclosure at the age of 62, right? 60, 62. So he’s kind of an old guy, uh, at that point. And he takes his social security at 62, which is not optimal because you don’t get your full benefit doing that, but he needed the money to live on. He had a very tiny pension from one of the companies he’d worked for along along the way. But then, you know, Tom went out and and he got a job on the Firestone, I think Firestone, the Henry Ford Museum has a has an 18th century working farm where, you know, people who visit the museum can see how farming was done back in those days. And they have people who actually do the farming chores. It’s a real operating farm, but who dress up in period costume and they farm the way it was done in the 1800s. Well, Tom is one of those. And so now in in in his old age, he’s got this great job where he’s working outside, you know, he’s physically active. He’s a very personable, sociable guy, so he gets to interact with people who come to the museum. He doesn’t make a lot of money doing that, but he’s got a little bit of money coming from that. He’s got his social security, he’s got this tiny little pension. Tom’s doing fine. Not great, not wealthy, but Tom has enough and everything went wrong. And the other thing I will say is that Tom is probably the single happiest human being I know in my life. And everything has financially gone wrong in Tom’s life. So when I hear people in our community who are riddled with worry about, you know, is my two and a half million dollars really going to last, I I I just want to say, yes, it is, and even if it doesn’t, you’ll probably be okay. You know, things are are if you have the right attitude and things work out.
Mindy: JL, do you have any tips for people who are just getting started on their journey to financial independence today?
Guest: Well, the first thing I’d say is if you’re just getting started in your life and you’re and you’re going to start on a path to financial independence, you’ve discovered it, you you have a tremendous advantage because you don’t have that any inflated lifestyle that you need to unwind. So, I think the first thing I would say is is don’t let that happen to you. And probably as as Scott was saying, you know, with his savings rate and I was talking about mine, you know, determine how much of your money you want to spend buying your freedom. And of course, the more you you divert to buying your freedom, the sooner you will have your full freedom, be fully financially independent, and that’s an independent judgment, but just start there. And then you never have to worry about unwinding things. And understand that almost no matter what you make, uh, if you look at half of that, there are people out there who are probably living successfully on half of whatever that number is. That was certainly my experience. So, yeah, and then if you’re in debt, I mean, that’s job one is as our friend Mr. Money Mustache likes to say, if you’re in debt, your hair is on fire. So, you know, you need to And I I I say, you know, being in debt is like being covered with bloodsucking leeches and it’s appalling to me that in the United States, we think this is normal. You know, the idea of carrying consumer debt is considered normal. Of course I do, you know, that’s how I afford all this stuff I I want to own. It’s insane. It’s like saying, I don’t want to I don’t want to spend X number of dollars for this thing. I want to spend much more than that in the interest payments. And it’s it’s again, it’s like being covered with bloodsucking leeches. It’s not normal. You got to take your sharpest knife and start scraping those bloodsuckers off.
Scott: I completely agree, right? Like why why like like consumer debt and and these types of things that you have to dig yourself out of the hole and then begin the wealth building journey, which you have to do in America if you want to live a comfortable retirement at any point in your life earlier or traditional. So it’s an emergency. And you know, that’s not the time to be going out, going out and eating eating out or whatever, you know, got consumer debt that you can pay off. and you got to just attack this stuff.
Guest: Here’s the silver lining because that’s not easy. It’s easy for us to say that. It’s not easy. But if people organize their life in such a fashion to free up money from their income to divert to paying off that debt, they have created a wonderful discipline because once they successfully blow that debt out, all they need to do is start taking that money that was going to the debt and now channel it to buying their freedom, which of course you do by buying assets. So you’ve already got the discipline in in place. You’ve already created the lifestyle that you need to become wealthy. and you can turn it around. I mean, we we all three of us know people who have done that successfully.
Scott: Well JL, where can people find Pathfinders? Where can people find out more about you?
Guest: Well, so, uh, I I guess I’ll start with the more about me question because that leads to both my blog is JL Collins NH at uh. com. And if you go to the blog, you know, you’ll see uh, it’ll be easy to find Pathfinders. You’ll find a little ad for Simple Path to Wealth. You can click on that, that will take you to Amazon. You can buy Pathfinders at Amazon. One of the, uh, Pathfinders is my third book. It’s the only one I’ve done with a traditional publisher. and one of the advantages of that is that they have distribution channels. so my understanding is you should be able to find it in bookstores, maybe even in airports. Um, but if it’s not in your bookstore, you can certainly ask them to order it for you, but it should finding it shouldn’t be a problem.
Scott: Well, thank you so much for coming on today. It’s always a pleasure to talk with you and learn from you. Really appreciate it and highly encourage everybody to go to go and check out Pathfinders in addition to The Simple Path to Wealth. So, thanks for all you do, um, JL and great to have you back for the fourth time here on the Bigger Pockets Money podcast.
Guest: Thank you for having me back. I always enjoy hanging out with you guys in our conversation and I’m happy to come back anytime whether I’ve got a new book or not. So anytime you’ll have me, I’m I’m up for it. It’s always always my pleasure.
Mindy: Awesome. Well, thank you JL. This was so much fun. It’s always fun talking to you and we will talk to you soon. All right, Scott, that was JL Collins and that was fantastic. I’m so excited about this book. I’m so excited to just have somebody sharing these stories with other people because it is so easy to start down the path and think, well, I’m the only person doing this. I’ll just stop. Uh, I’m the big weirdo. Why would I put myself in this position? But to have the reinforcement of not only can you do it, you can do it at almost any income level. You can do it regardless of how much you’re able to save. Here are stories that show you you can do this, you can become financially independent. I’m just so thankful that JL Collins was able to join us and spend some time with us today. What did you think of the show?
Scott: I thought it was a great episode and you know, really, really enjoyed everything that JL had to say. Um, look, that’s what we’re about here at BiggerPockets Money. Financial freedom, we believe is attainable for anybody, no matter when or where you’re starting and that’s what Pathfinders is at its core. With that, should we get out of here, Mindy?
Mindy: We should, Scott. That wraps up this episode of the BiggerPockets Money podcast. Happy New Year to our listeners. He is Scott Trench. I am Mindy Jensen saying, “Ciao, ciao, Willow Ba.”
Scott: If you enjoyed today’s episode, please give us a five-star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.
Mindy: BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Calen Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.
