036.Community Chatauqua

036 | Community, Chautauqua, And AMA With JL Collins

In today's podcast with Jim Collins from The Simple Path to Wealth and JL Collins NH, we discuss the Chautauquas, in-person events plus an ‘Ask Me Anything' series of questions from our ChooseFI community.

In Today’s Podcast we cover:

  • Part 3 with JL Collins from JLCollinsNH, the Simple Path to Wealth and Stock Series fame
  • Jim’s discussion of Alan from PopUp Business School and how the UK Chautauqua came to be
  • The value of in-person events like Camp Mustache and the Chautauquas
  • Ask Me Anything segment with Jim with questions from our audience and private Facebook group
  • Question from Amber from our Facebook group about the value of annuities, reverse mortgages and fixed income items
  • Jim only recommends investing in stocks and bonds. The goals that Jonathan spoke of in the question can be balanced by allocating different percentages to stocks and bonds
  • Jim believes annuities and reverse mortgages are laden with fees that make them poor investment vehicles
  • Annuities pay a guaranteed income which appeals to many people, but since you are buying them from an insurance company you are buying this contract and you will never see your principal ever again. That is the annuity contract
  • The insurance company is betting on your death essentially based on actuarial tables for the annuity
  • Question from Emily on international equity allocation
  • Jim doesn’t see the need to hold international funds because VTSAX contains a significant international allocation with US multinationals, the expense ratios are higher and there is more risk because of lack of transparency in emerging economies
  • Question from Jeff on when to move from 100% equities to holding some bonds
  • Question from community member Brad on how to mechanically rebalance your funds
  • Jim does his rebalancing within his IRAs so there is no taxable event
  • He rebalances approximately once per year
  • Question from David on being too aggressive and Japan’s prior decades performance
  • Jim believes what Japan is going through is a “Black Swan” event and this is theoretically possible this will happen to the US
  • Questions from Felisa on Jim’s thoughts on inflation
  • Some inflation is normal and to be expected, but runaway inflation is extraordinarily scary
  • Question from Matt on why Jim is in a different bond fund than he recommends on his site
  • The Key to the Simple Path to Wealth is buying and holding for the long term
  • You always need to approach your life and FI journey with an open mind and be willing to be flexible and change as the facts change
  • Simplicity and flexibility

Listen to Brad and Jonathan's thoughts about this episode here.

Links from the show:

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3 thoughts on “036 | Community, Chautauqua, And AMA With JL Collins”

  1. Does Mr. John Bogle disagree with Mr. JL Collins? We recently received a personalized financial plan from Vanguard. I’m assuming Mr. Bogle agrees with the recommended allocation of the company he founded:) Seems to me, that they do not agree that VTSAX “covers you” for international investing. For our age and timeline for retirement they suggested a 60 stock 40 bond allocation. We love, and respect the information Mr. Collins provides! We are just trying to decide if we should simplify our portfolio with just the two funds Mr. Collins recommends or stick with Vanguard recommendation? Brainstorming, and discussion would be appreciated greatly! Below is the specific allocation recommended by Vanguard. I can give specific funds if needed.

    Stocks 60%
    42% U.S. large-cap
    18% U.S. mid-/small cap
    40% International
    Bonds 40%
    28% U.S. short term
    28% U.S. intermediate-term
    14% U.S. long-term
    30% International

    • we have many people in our community that disagree with Jim- I tend to feel that this is in the margins and we will end up at a similar place (within the parameters that we discussed of broad based index funds) your allocation of stocks to bonds will heavily depend on the factors we discussed on the last 3 episodes. If you want to bounce your allocation of our 2000+ member facebook group – go to chooseFI.com/facebook and join the conversation. You can get several other perspectives to weigh in on your selected allocation 🙂

  2. I think there were some good points brought up by some listeners. The Japanese stock market topped out in 1989, and it is currently about half the value it was almost 3 decades ago. Good luck to the Japanese person who adopted a buy and hold strategy in the late 1980s. Just how long are they supposed to hold? And Japan is a first-world country.

    For anyone interested in a better strategy that will help you sleep at night, there is a permanent portfolio as originally described by Harry Browne. You hold approximately 25% stocks, 25% long-term government bonds, 25% gold, and 25% cash (or cash equivalents). It is designed to withstand almost any economic environment. It tends to give higher returns in an environment of higher price inflation, but you need higher returns when your dollars are depreciating faster. You should rebalance your portfolio when one or more of your asset classes strays too far from the 25%.

    There is a mutual fund (PRPFX) that somewhat mimics the portfolio. The returns have not been great over the last few years with the relatively low consumer price inflation and low interest rate environment, but you will be glad to have the portfolio when times get tough.

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