2 Paths to Wealth : Which one Would You Bet On?

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Credits: Lili Popper

Last week, I purchased and received a copy of Jim Collin’s latest book “The Simple Path the Wealth”. I had no expectation from the book except everyone in the personal finance community had great reviews about it. Are they all biased?

No, I have to agree with all of them. It is indeed a great book.

But before I talk more about it, let me show you what I received in the mail earlier today.

The Scammy Path to Wealth

Financial independence trainingThe first 2 points are fascinating. From this training, I will learn:

  • The seven other asset classes: non-traded real estate, oil and gas, managed futures, equipment leasing, private equity, private senior secured and non-secured notes and debt, tax credits
  • How politics may affect your portfolio and help give you direction on where to invest and where the opportunities may be created regardless of what politicians do

I read this and this is what I understand:

  • Another 7 asset classes!! Gosh, finance is so complex. I must be dumb to not know anything about managed futures! Or private senior secured notes and debt. I probably need to listen to these guys, they sure seem to know their stuff!
  • That is definitely exciting. No one know how the elections will turn out, but they have a plan either way! Can’t wait to learn about the latest crystal ball reading techniques.

Then, just to be sure, the flyers goes on to say:

We live in one of the richest countries in the world but no one tells us how the financial system really works. Many people believe they can ask any degreed or licensed professional for investment advice. The fact is it takes more than a degree or license to obtain the kind of financial education that will help you navigate today’s financial system effectively.

Man, you can’t trust anyone these days, but this Mr Orr (whom I have never heard off before) does sound like a financial guru.

How do I get access to all this knowledge?

Simple. Mr Orr tells me to register for his next training session right here in Houston. I suspect that demand is going to be strong, because they require advance registration. They make it easy however, I can just mail him an $89 check to reserve my seat. And my spouse can attend at no extra charge!

Can’t wait to learn about all this and brag in the office on Monday. My boss will be so jealous when I tell him how I invested in the other 7 asset classes that he didn’t know about.

The Real (Simple) Path to Wealth

This is exactly why Jim Collin’s book is such a great book and why I couldn’t stop reading it over the week-end.
  • It shows that finance is NOT complex. It’s rather simple and Jim explains this very well, but too many people make money of off making it sound complex.
  • It’s easy to read.  The book doesn’t talk about managed futures or non-tradable real-estate deals. It’s down to very basic index investing.
  • He loves Vanguard. Me too.
  • Jim’s simple path to wealth is EASY to understand and EASY to implement. Which means anyone can set this up over a week-end, move on with their lives and know that they have a solid plan in place.
  • Jim’s website is so much cooler that Mr Orr’s own theOrracle.com (seriously). It’s also worth reading the stocks series, from which the book is inspired.

The best about this book however, is that it summarizes so well the whole passive index investing approach that many of us relate to.

I have told my wife that if something had to happen to me and she needed help managing our finances, she should refer to Jim’s book. All the logic is there, no need to re-invent the wheel or go pay high fees for random money managers.

It reminds me of a Warren Buffett quote, when he outlined the plan for governing the trust he’s leaving behind for his wife:

My advice to the trustee couldn’t be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) 

he probably forgot to add:

and read Jim Collin’s book The Simple Path to Wealth.

That’s what I’ll do.

If you’ve read Jim’s book, what did you think about it? Have you ever experienced  or been tempted by one of these financial independence guru seminars?

-Nick

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11 COMMENTS

  1. This story reminds me of the parting words from our former financial advisor, who, needless to say, we parted company with :

    “I have asked you to adopt a way of seeing the world that is different from conventional wisdom. Especially when the results have not been there. I want to make sure you think twice before going into a traditional approach of buying low cost index funds in a traditional asset allocation approach.”

    Yep, he was a complete and utter fool.

    • That was probably a very good move Mr PIE!
      One thing I’m not sure I understand though, what incentive do they have to explore non-traditional approaches when they work just fine?
      Maybe we’re using the wrong medium and should start sending our posts via traditional mail! 😀

  2. Wow. Mr. Orr, what a legend! he definitely sounds like a man who has all the answers… The sad thing is that people still fall for these scams. If only they had been reading some of our PF blogs!

    I’ll give the book a read, it sounds interesting and a potential addition to the “must-read investing books”.

    • The best part of Jim’s book is that it’s so simply written that it’s a good education tool for your spouse, friends or family and it’s actionable.
      If someone is interested getting started or doesn’t think it’s possible to retire early, this would be the best investment of time and money.
      Thanks for reading!

  3. Wow the letter’s preachings are so BS. “The fact is it takes more than a degree or license to obtain the kind of financial education that will help you navigate today’s financial system effectively.” I don’t think it takes a degree to learn how to apply to a broker, type up a vanguard s&p 500 ETF and press a few buttons.

    Thanks for recommending this book, I haven’t read a significant amount of personal finance books but I always love reading and learning new things!

  4. That’s how they charge money…by trying to make it some more complicated than it really is. And I have a feeling that once you pay $89, the course will be more of a marketing tactic to get you to sign up for an even more expensive course. Well at least that’s what the real estate flipping courses like to do. Sign up for a more expensive course with a personal mentor, etc, etc and you too can get filthy rich with our strategy!

  5. I completely agree with you, these are many spruikers out there who just want to make money off us, and they don’t care what our actual results are in the future.

    It’s so easy for anyone to invest in Vanguard funds and I’d advocate that for most people (unless you want to put in a lot more research into companies or specifically DGI stocks).

    Tristan

    • Hi Tristan, thanks for reading! You’re right that most people would be fine with Vanguard funds. Or even just VTSAX to start with and then explore other techniques likes DGI.
      These money advisors might be rich not because of what they preach, but because of how much they charge for it!

  6. I’ve never heard of THIS Orracle fellow before…I must send him a check of $89 to find out more! 😉

    I read Jim Collins’ blog a lot when I first got into personal finance. What he talked about seemed so simple and easy that it can’t really be the way things work?!

    • Jim’s stuff is definitely simple and easy to understand which is why I liked the book so much. I wish I could tell you if that was *really* how things work, but I don’t have all the experience of someone like Mr Orracle to appreciate this. If you send me a check for $89, I can ask him though! 😀

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