📚The simple Path to Wealth - book notes
Tags: money, wealth
Published: 2023-03-21 18:31:30

Your road map to financial independence and a rich, free life 

author:: [JL Collins](https://jlcollinsnh.com)
tags:: #politics/economy #money #wealth 

## Overview 

*If you reach for a star, you might not get one, but you won't end up with a handful of mud either*

## main points 

* complex investments only serve the ones who create and sell them - rarely do they behoove the investor. 
* Don't have debt 
* invest in VTX (stocks and bonds )
* LIVE BELOW YOUR MEANS
	* Don't let the lifestyle creep in 
* market always goes up and down, ultimately up 

## 3 considerations 

### Wealth stages 
* wealth preservation - not working / producing money 
	* 
* wealth accumulation - working / producing money 

### risk tolerance 
keep in mind your tolerance for risk when making investments 

### event horizon 
long term(10+years) / short term 

## 3 tools 
### glossary 
 inflation - when prices rise, making your dollar less valuable 
 deflation - when prices drop, making your dollar more valuable 
* Stocks 70% -  vtsax - tracks the whole STOCK market
	* best returns over time 
	* inflation hedge
	* core wealth building tool
* Bonds 25% - vbtlx -  tracks the whole BOND market
	* provide income
	* deflation hedge
* Cash 5% - 
	* routine expenses 
	* king during deflation - the more prices drop - the more cash can buy 

## Taxes 
### interesting reads
 * [never pay taxes again ](https://www.gocurrycracker.com/never-pay-taxes-again/)
	 * Choose leisure over labor
	-   Live well for less
	-   Leverage Roth IRA Conversions
	-   Harvest Capital Losses AND Capital Gains
- [gcc vs rmd](https://www.gocurrycracker.com/gcc-vs-rmd/)
- [early retirement strategies and roth conversions](https://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/)
- [traditional ira vs roth ira](https://www.madfientist.com/traditional-ira-vs-roth-ira/)
- [retire even earlier](https://www.madfientist.com/retire-even-earlier/)

### RMDs (required minimum distribution)
* at age 70.5 folks must WITHDRAW a minimum and pay due taxes or the feds take 50%
* between retirement age and 70.5, one can make deductions to minimize taxes , if married/filling jointly, it is best to do a joint effort to minimize taxes.

### HSAs (health savings accounts)
* Can be invested anywhere, including VTX. 
* contributions are tax deductible
* must be insured with high deductible health insurance plan to have an HSA
* withdraw money to pay qualified medical expenses
* no taxes when paying medical expenses, if withdrawal is made for non medical expenses, a 20% tax is incurred
	* qualified medical expenses include dental and vision. 
* in case of death, spouse inherits HSA with same benefits 
	* other heirs, account is considered income and taxed accordingly 
* any money in your HSA and any money it earns, is yours until you use it 
* anyone with a high deductible insurance, should fund an HSA. 

## CHARITAble giving 
The vanguard charitable endowment program 
- open with as little as $25,000
- get tax deduction on year foundation is funded
- faced with RMDs , you can roll all or part of a tax advantaged account into a charitable foundation tax free
- Chose an investment so donation grows tax free until you chose to allocate it
- you decide which charities get your money, when and how much
- you can add more money whenever (charged 250 annually if account falls below 15,000)