Beyond The Simple Path To Wealth With JL Collins

“I think people are looking to see if I’ve changed my philosophy in the face of this bear Market and Covid-19 and the answer is no.”

“This is a bear market the only thing that surprised me about it is that it took so long to get here, 10 years after the last one.  I would have predicted this one would have come along sooner.  It’s heartbreaking that what’s triggering it is something that kills people but as I pointed out many times in many interviews, bear markets are always triggered by something serious.  If it wasn’t something serious then we wouldn’t have a bear market.”  

“When people say…it’s different well yeah the trigger is different but the bear Market is the same as every other bear Market and it will run its course.”

The Godfather of Financial Independence

I’m talking to JL Collins known by some as the godfather of financial independence, author of The Simple Path To Wealth, and a financial sage at large.  I love investing and personal finance. However, the amazing thing is that in the 4 times that I have hung out with JL, we have not once talked about finance or investing.  We just never got around to it.  

While JL is often interviewed about finance and investing, there is so much more to his story. If you pay attention, you’ll learn something simple and powerful about the way he lives his life. Along the way we’ll talk money, career, philosophy, travel and more.

The Importance of Money

JL, I wanted to start by going back to your first guest post on Mr Money Mustache.  In it you say “It’s a big beautiful world out there. Money is a small part of it.”

I thought a good place to start would be what are the other parts that you think in terms of?

“Well, let’s stay on the money part of it first because I don’t want to undersell the importance of money. We humans have created a very complex world. Money is the single most powerful tool that we have to navigate that complex world. My friend Kristy Shen who writes Millennial Revolution has a great quote, “If you understand money, life is incredibly easy. If you don’t understand money, like the vast majority of people, life is incredibly hard.” I think money is critical and understanding money is critical. That’s why I pushed so hard when my daughter was young and I turned her off to it. Because if you understand money then life is easy, and I wanted her to have a good life.”

Money and Oxygen

“There is another guy ( Jim Dahle, The White Coat Investor) who was being interviewed and I wish this is something I had come up with. He was on a financial independence panel and some of the other panelists were sort of poo pooing money. There are things more important in life than money and so on. I kind of cringe when I hear that. This fellow made the observation that money is like oxygen. When you have enough it’s easy to not pay attention to it. When you don’t have enough, then you can’t think about anything else.” I think that’s true. When people who are in a sound financial condition start dismissing the importance of money, I cringe a little bit and I think that’s very naive.”

Wielding The Tool

“Having said that, let me get back to your question.  Money is a tool. It’s not your life and it’s not the objective of your life.  The more you have and the better you handle that tool, the more effective you’ll be in your life.  That’s anything from travelling to selecting the kind of work that you really want to do. Exactly what you and your wife have done.  If you have that tool of money, you can craft everything else in your life to be more aligned with what you want as opposed to what you have to be doing to pay the bills if you are living paycheck to paycheck.”  

For me Mr Maze, when I think back to my younger self I was racing like hell to try to get ahead and sock away as much money as possible.  However, at some point I realized that I was in a position where my finances put me in a spot where I could think more broadly than providing and paying the bills.  With you and your career, can you pinpoint a time when that started to happen to you? Did you go through something similar and if so, when was it? 

“Looking back, I actually achieved FI (In the classic terms of having more in investment returns than you are spending per year), in 1989. But it’s important to understand that I had no concept of financial independence in 1989. I had never heard of the 4% rule. In fact, then I don’t think the Trinity Study had even been done at that point. All I had a concept of was F-you money which was a term I came across in a novel.”

F-You Money

I could explain more about JL’s personal F-you money philosophy but there is a hilarious and totally not work or kid appropriate video that kind of says it all. This is JL explaining F-you money channelling John Goodman in “The Gambler”:

This video is all the more hilarious because in real life JL is kind of the total opposite of this character. However, the philosophy is 100% JL. 

Accidental Financial Independence

“Looking back on it, I hit FI in 1989 but I didn’t know that.  With my focus on F-you money, I’d take sabbaticals on a regular basis on my own but I always had the intention of going back to work.  In 1989 I took what turned out to be the longest of those, it went on for 5 years. 3 years into it I noticed something very interesting.  In each of those previous 3 years, we had lived the same lifestyle as we had when there was income, but at the end of the year we had more money than we had started with.  The third year in, I guess it sunk in that something really remarkable had happened. But it never occurred to me that this might mean I’d never have to work again. In fact, at that point in this sabbatical, I was getting itchy to go back to work again.”

“I often think to myself if I had access to all the information that is out there now.  If I had known then the ramifications of being FI, whether I would have continued my corporate career or if I would have done something different.  But it never occurred to me at the time because I liked what I was doing. I just didn’t like to do it all the time.”

Going From Hero To Zero

“In 1999 I joined a company and that was probably the best job I’ve ever had. It was the pinnacle of my career in terms of position, it was a great company.”

JL continues that when the tech bubble crash happened in the early 2000’s the whole business that he worked for got slammed and he along with most everyone else in the business was out of a job.

“Our business went almost to zero. It was pretty breathtaking because the year before we were just blowing off the doors in terms of revenue and profits.  I got a bonus check that last year for more than I had ever made in a single year and the president of that division took me out for a long wine soaked lunch to talk about how bright my future was and blah blah blah.”    

“So I went from cashing the biggest bonus check of my life to being on the curb.”

“There was nothing anyone could have done in that environment when the business just goes away.  It doesn’t matter how good and talented you are.”

“But that’s another reason to have F-you money because you never know.  The year before I lost that job, if you had asked me JL how secure do you feel in your job, I would have said you know the president of the division just took me out to a very expensive lunch to tell me how great I am and how bright the future is.  I feel really secure.”

The End Of A Career?

I’ve written in the past about the paradox of success where those who are established and may not even be seeking opportunity are the same ones that seem to get more of it. Such was the case with JL as well. After a successful career that he enjoyed, others sought his expertise even when he wasn’t actively looking.

JL continues that after that last company implosion, “I figured at that point, that was the end of my career.  I thought ok this is a good place to end it.”

“Then I had a friend of mine who used to work for me that kept pestering me to come work for him and finally I did.”

“I went to work there in 2006 and then I left in 2011.  2011 was the first time that I ever left a job with the intention of never having another job again.”

How To Manage a Career

“Yeah publishing is…a very different business today than when I went into it.  But for the time I was in it, I liked it. I was in B2B magazines so I had a window into a lot of different industries which I thought was fun.  I started in sales which I enjoyed and then became a publisher and group publisher and I enjoyed that part of it.”  

“There’s two schools of thought it seems to me: the idea of find something you love and you’ll never work a day in your life again and you know, that’s appealing, but I’m not sure it’s real practical for a lot of people.”

“If I had followed that advice back in the day I never would have chosen publishing because it’s not something that I inherently love.  But the better advice I think is somebody who said choose something that you can make money at and then learn and work hard to be very very good at it because when you’re very good at something you’ll enjoy it.  It’s satisfying. I think that’s true of publishing and I think it would have been true for me with anything I went into.”  

“I never felt that I was making a huge contribution or making the world a better place but it was a valuable niche to the people it served, I was good at it, and that was satisfying.”  

“I am the kind of personality where I really throw myself into something when I get involved in it and that sounds great but the problem with that is that I’d also burn myself out.”  

Being a Sprinter or a Distance Runner

“My attention span for a job is about 4 years.”  After 4 years I kind of run out of steam and I lose interest.  So that was one of the reasons it was important for me to be able to step away periodically because I’d burn myself out.  Then I would recharge my batteries and I would go back into it. I wouldn’t want to do it any other way. I knew a lot of people in business who worked at a more steady pace than I did.  They didn’t work as hard and they weren’t as effective as I was when I first came on board but then they didn’t burn out either. So they had more of the reliable multi-decade careers with a given company.  But that’s just not me.”  

“It wasn’t so much publishing that facilitated that quirk of my personality as it was having F-you money that allowed me to step away from it.  And then my reputation was good enough that it was always easy for me to step back into it.”

From Executive to Personal Finance Expert

“2011 was the first time that I ever purposefully left a job with the intention of never having another job again.”

When JL left that last job he fired up a blog and was writing informally online about life, business, and money.  It was a nice way to stay in touch with friends and former co-workers. Around this same time, he also wrote a series of letters to his daughter about money and investing.  These became “The Stock Series,” a set of posts that is referenced by almost every financial blogger I know, including myself. It became the basis for JL’s revered book a Simple Path to Wealth.  This also started the chain of events that has made JL Collins the investing and financial authority that he is recognized as today. If the name JL Collins is new to you, here are a few of my favorite pieces as an introduction:

• JL Collins talk at Google
• The Stock Series (a great investing guide for those that don’t like investing) 
• JL Collins First Ever Guest Post on Mr Money Mustache

This is a fascinating dimension of JL in its own rite, however, I mentioned at the beginning of this article that I wanted to focus on other aspects of JL that have not already been covered more extensively and perhaps better by others.  There is a broader lesson that I have learned through my time talking and hanging out with JL so let’s keep going and see where this leads…

Using That F-You Money

Right after he left work and right as he started blogging, Jim had spent some time in South America in 2011.  A year later, the blog was starting to get quite a bit of a following. JL had done some public speaking in the past and he recalls:

“I like talking about this stuff and I started looking around for places where I might give talks that were related to FI. At the time there was nothing. There was just nothing out there along the lines of what I had in mind. Because I wanted to go to some cool place and hang out with cool people, and I wanted to be a speaker. That just didn’t exist, so I created it ”

JL remembered a place he had seen while travelling, he got together a few others who were writing about FI to also be speakers. He called it Chautauqua named after an adult education and social movement that had been popular in the early 1900s. JL and some others put out a notice to their readers and people showed up.

For the first 5 years JL explains that beyond his expenses, “I never took any payment for those…making money was not the objective.”  “When we did that first one, I didn’t even think there was going to be a second one.”

Over time, Chautauqua has grown into something pretty remarkable.  It is now run by a small team and is held a couple times per year. In 2019 for example the two locations included a thousand year old mansion in Stratford upon Avon UK, and an amazing river view hotel in Douro Valley Portugal (think Portugese wine country).    

What this means for JL and his wife Jane is that 2 of their travels each year revolve around the location of Chautauqua. For example in 2019, they spent 6 months in Europe between the UK Chautauqua in the spring and the one in Portugal in the fall.

Living Nomadic

It seems like you and Jane are semi nomadic these days.  Can you describe more what your life looked like post retirement and also today if anything has changed over time?

“We are nomadic today and have been for a couple of years.  We’ve always loved to travel. We were both over 30 when we got married so we had a decade of adult life before we met and married each other.  For that time we were both avid travelers. I think that’s one of the things that appealed to each of us about the other was that we had this love of travel.  I travelled extensively for business and then we would travel whenever we had vacation time.”

“When our daughter went off to college in 2010, we sold the family home and we went back to renting. We were travelling a lot. We rented for 4 years and at one point it suddenly occurred to us that we travelled so much that most of the year these apartments were just expensive storage. At that point we just decided to dump the apartment and go full time nomadic. That would have been in 2017.”

Do you have any idea over the years how many countries you’ve been to?

Like many experienced travelers I know, JL doesn’t even know the answer to this off hand.  For the record, I counted over 30 countries while reading and preparing for this chat but JL seems more concerned with something broader. 

“You know we’re not the type of people that do this so we can put notches in our gun. So we have no goal to be to a certain number of countries.  We are just as inclined to go back to some place that we’ve liked as we are to go someplace new. For instance…I love Ecuador. We’ve been to Ecuador a lot…I think some people would say well I’ve been to Ecuador so I’m going to go to Brazil where I haven’t been.”  

“When we go some place, we also like to be there for awhile.  We’re not the kind of people who try to see Europe in two weeks.  Last summer (while in Europe) we would spend 3 or 4 weeks at a time in one city.”

What are you looking for when you travel, why do you go there to these places? 

“Well right now, travelling is just kind of a lifestyle. We like being in new places. Jane likes to get out and see the sites more than I do so sometimes she’ll go out and do that on her own. Frequently we’re visiting friends so she will go out and do that with friends we are visiting. Or we’re constantly meeting people while we are on the road. I’ll do a little bit of that but I’m just as content to sit in a cafe, watch the world flow by, and just kind of get a feel for the place.”

A Love of Hotels

Somewhere on your blog I read that you really like hotels and I’m wondering if after living nomadic if you still really like hotels?

“I do! I developed that from my business travel days. Especially early in my career, I was going out of town literally every week. I was staying in hotels more those days than I was staying in my apartment. In fact, there were many times where I thought to myself why do I have this apartment, I should just live in hotels full time.”

Jl explains that the lack of tech meant that he had to return to the home office fairly often for face to face stuff.  However, he explains “if I were doing that job today and had the technology tools we have today, I would just live in hotels.”  

I recall to JL that for a decade in the 60’s and 70’s, Warren Beatty lived in a suite at the Bevery Wilshire Four Seasons.  For 10 years it was just his room.

JL chuckles, “When I was a kid, I remember reading a story about two kids who lived in a hotel. I remember thinking that’s really cool, I would love to live in a hotel. I still love hotels.” “It just appeals to my nomadic nature, I’ve never liked owning houses. Because then if a big storm rolls through I’m worried about the roof rather than enjoying the storm. If I hear some weird noise, I don’t care.” “I love the fact that it is so incredibly carefree. The people that run hotels are by and large very welcoming and they take good care of you.”

That Little Place On The Beach 

Have you ever looked at property while in vacation mode suddenly thinking whoa I could do this all the time? In a weird sort of reversal, JL and Jane sold their primary residence but ended up buying a seasonal vacation home on Lake Michigan (aka the sea of Wisconsin). They had visited family on the lake for years and casually looked at places “sort of vaguely maybe someday, who knows,” as JL recalls.

In 2017 they came across a place that was a mess. It had foundation, electric, roof, and plumbing issues. The realtor showing the place said, “you don’t have to worry about what’s wrong with it. Everything is wrong with it.” JL chuckles, “Realtors have a saying that buyers are liars…we are the epitome of buyers that lie because this was nothing like we were looking for.” However, JL continues, “it was really cheap! The nice thing about this little shack on the lake is that 20% of the price was the structure, the other 80% was the land.”

JL and Jane fixed it up and now refer to it affectionately as “Kibanda” which is an East African word meaning small or crude single room dwelling. JL wrote about Kibanda in an article called Mr anti-house buys his dream house. For the record, he AirBNBs it while they are not there (I would expect nothing less).

What do you do while you’re at Kibanda?

There are stretches where “you can walk along the beach for miles in either direction.  The lake is just drop dead gorgeous. We’re on the Western edge of the lake so the sun rises out of the lake.  What really is stunning are the moon rises. That full moon comes out huge and bright orange right out of the lake…The lake is ever changing.  Sometimes it’s rough and stormy and other times it’s dead calm. I just love being there.”  

“We’ll never live there permanently.  Winters are brutal,” he explains.   

Changes Over Time

Today I am talking to JL over a zoom call while we are both quarantined.  However, just a few weeks ago I was walking around a mountaintop with JL and Jane and the topic of age came up.  I relayed to JL that I also asked my wife and both her and I placed JL and Jane at 10 years younger than they actually are.

“I’m 69.  I was born in 1950.  So actually later this year I turn 70.”

JL, something I’ve noticed is that as people age, they don’t seem to like to travel as much anymore.  You guys are out and about and all over the place. Do you foresee that changing? Have your views on travel or being nomadic changed over time or is it still similar?     

“I don’t think our views on being nomadic and travel have changed but there’s no question that as you get older everything becomes harder.  My wife and I are still in very good health which we are grateful for but, nevertheless, I don’t have the energy that I had even 10 years ago.  Everything becomes harder and there are aspects of travel that are difficult and kind of a pain. Those things get magnified. At some point, you’re absolutely right, it won’t be worth the effort anymore.  So as we are travelling around now we keep an eye out for places that we might want to settle because that day is coming.”

“It’s a balance. We still love travelling. We’re not ready to give it up. But I am aware that if I wait too long then I might not have the energy to make the best decision. It takes a certain amount of energy to find a place, buy a place, move, and furnish the place.”

The Simple Secret Of F-You Money

JL and I talked about the development of human kind, capitalism, and how he used to play in a semi-high stakes poker game in Chicago. “I do have a wide ranging set of interests, evolution, astrophysics…I enjoy reading the work of other people,” JL concedes.

However, there is only so much one can pack into one article. I think it comes down to this…

JL Collins is generally calm, articulate, and talks in a natural soothing baritone (see for yourself in this guided meditation for when the stock market is falling). This is hard to explain but much like his book (The Simple Path To Wealth), talking to JL makes life seem simple. Not easy but simple.

As he recounts his path in life, JL first achieved FI in 1989, however, he kept working. He had found a career that he was really good at and he kind of enjoyed being on the road as well. This led to executive roles and even greater wealth.

His initial interest in helping his daughter to understand and master money as a tool in life led to a website and eventually a book.  This website led to him discovering the financial independence movement which put a name to some of the things that he had practiced. When JL decided that he’d like to do some speaking about FI but there was really no venue, this eventually grew into what is now Chautauqua. As he and his wife travelled more post traditional employment, they found that their house was not really necessary and hence they began living nomadically. 

The picture that I am trying to paint gets back to where this interview started. Money is a tool. If you understand it and use it well, then life can be easy. If you don’t, then life is hard. This is where F-You money comes into play. JL has figured out what is important to him and would rather say F-You to the rest. The money makes F-You possible. Simple. No 20 year plan that was executed, no desire to re-invent what already works. Just a man who knows what he enjoys and is committed to working at it. You want him to do something else? F-you!

This is #6 in a series where I talk with others living personalized and intentional lives that look very different from the norm. Check out more conversations from living outside the maze if interested:

• #1 SERIAL LIVING ABROAD WITH FAMILY: AN UNCOMMON DREAM
• #2 BEYOND AIRBNB WITH ZEONA MCINTYRE
• #3 BUILDING FREEDOM: MICHELLE FROM FRUGALITY AND FREEDOM
• #4 LIVING DIFFERENTLY TOGETHER: RETHINK THE RAT RACE
• #5 THE POWER OF RESILIENCE: MISS MAZUMA

I’m passionate about financial independence, happiness, success, and adventure. Consider subscribing below to get a weekly email directly from me with a few thoughts and latest articles. It’s totally free and totally worth it, I promise. Also feel free to chime in with a question or comment below and share this with others if you found it worthwhile 🙂