Simple Path, Index Funds & Long-Term Thinking
We have a big week on the podcast this week starting with the episode that dropped yesterday (411) with JL Collins on The Simple Path to Wealth. This is a great refresher on long-term thinking, investing in low-cost index funds and the simplicity in matching the market over many decades and, in the process, outperforming nearly all active investors.
Stay tuned for Friday’s episode (412) with Alan and Katie Donegan that we’re calling “What’s in Your Index Fund?” Katie dove deep on the fundamentals of some of the biggest index funds and the three of us had a great time discussing the ins and outs of this essential investing strategy.
These were on my mind when I saw Brian Feroldi, great friend of the show and author of the fantastic book “Why Does the Stock Market Go Up?,” tweeted something we all need to remember, especially in times of turbulence in the markets:
“I don’t know how the market will perform in December.
I don’t know how the market will perform next year.
I don’t know how the market will perform over the next 3, 5, or 10 years.
I do know the odds tilt ever more in my favor the longer I hold.
So that’s what I focus on.”
Last Call: Book Club Input
We’re recording our first ChooseFI Book Club episode this Friday 12/2 on the book “Four Thousand Weeks: Time Management for Mortals” so there’s still time to get your input in on the book.
Hit reply to this email or send in a voicemail ASAP!
One of the most influential passages in the book for me was:
“Our obsession with extracting the greatest future value out of our time blinds us to the reality that, in fact, the moment of truth is always now – that life is nothing but a succession of present moments, culminating in death, and that you’ll probably never get to a point where you feel you have things in perfect working order.
And that therefore you had better stop postponing the “real meaning” of your existence into the future, and throw yourself into life now.”
Saving on Medical Care
I’ve been meaning to revisit some of the best tips from past FI Weekly newsletters, so when Keenan wrote in, it provided the perfect excuse to highlight some ways to save on medical care.
Here’s Keenan’s email:
“I wanted to share two discount pharmacies that I’ve learned of that have saved people I know hundreds or thousands of dollars:
Cost Plus Drugs (Mark Cuban’s company)
For instance, I have a family member whose Anthem Blue Cross medical insurance wouldn’t cover Mesalamine and the quotes were between $600-900 for a 30 day supply. It’s only $32.40 at Cost Plus Drugs (Brad note: I’m seeing this down at $26.70 now). A truly astounding difference.
Hopefully this may help others out!”
Here are two others I highlighted in a prior newsletter:
- MDSave.com for hundreds of different procedures, scans and tests at a fraction of what you’d pay your local hospital or imaging center through insurance
- Ulta Lab Tests for a la carte blood testing at extremely reasonable rates and easy scheduling
ChooseFI Community Taking Action This Week
- Katie said, “I successfully used points to book a flight!!! I managed to find a flight on Alaska for 30k miles so I transferred points over to BA…and then couldn’t figure it out to do the final ticket and ended up paying out of pocket. Fast forward one week and 1% smarter. I called BA for a trip I’m taking in February, same destination. Ten minutes with a delightful representative, 15k points and $11 dollars later, I’ve got tickets home. Thank you!!!”
- Grant said, “My one percent better is switching our family from our current cellular carrier to Mint Mobile. I will be saving nearly $100 a month! I can’t believe I didn’t do this earlier.”
- Jessica said, “Our 1%, We haven’t eaten out in 96 days. We made it a goal and it was harder in the beginning than it is now. We have no end date to our goal; just keep on trying. We have date night at home now or eat before we go out to not get tempted. It feels good to have the discipline as this habit costs us thousands over the course of our marriage and we’d often only realize it when we couldn’t afford basic needs due to stress and comfort fast food eating. I’m proud of us.”
- Luke said, “My 1% better is that I recently got a raise and instead of letting “lifestyle inflation” take hold, I set up an automatic extra credit card payment for the increase instead!”
- Savannah said, “My 1% better this week is finally transferring my Roth IRA out of an old brokerage account and mutual funds that had very high expense ratios (my grandparents set it up for me when I was a kid, I am so grateful to them) but now with my Roth in Vanguard and in their index funds I will be saving myself around 200k over the lifetime of my investments.”
- Sarah said, “I landed a new position, and all the cover letter writing and interviewing skills I’d developed helped me do it. (So don’t give up! The rejections are teachers.) The hiring manager turned down my request for a higher salary, but accepted my request for a hiring bonus. After three weeks, I’m still in the honeymoon phase with my new job, but so far, it feels like a dream position. The work is fascinating and meaningful, the hours stable, the workplace kind and supportive with no expectation or worship of working extra hours. With a predictable schedule and work I can leave at the office, I’m healthier and able to give back to my community. I’m regularly going to the gym in the morning and began volunteering with two different community organizations. With my higher salary, I’m also donating more money to community causes.”
- Nick said, “I opened and invested in a 401k, HSA, and Roth IRA, all with Vanguard low-cost index funds, and I was able to max them all out.”