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The Simple Path to Wealth – How to Retire Early in the USA/Canada
Learn how The Simple Path to Wealth by JL Collins offers a straightforward strategy for early retirement in the USA or Canada. Discover key principles like index investing, FI, and freedom from debt.
What if you could stop stressing about money forever and retire decades earlier than most people?
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That’s the promise of JL Collins' bestselling book, The Simple Path to Wealth. It's not just a guide to saving—it’s a mindset shift on how to build true financial independence using common-sense investing and minimalist living.
Whether you're in the USA or Canada, the core ideas still apply—and they could shave years off your retirement timeline.
What Is The Simple Path to Wealth About?
JL Collins originally wrote a series of letters to his daughter explaining money, investing, and freedom. That series evolved into this book, which has now become a must-read in the FIRE (Financial Independence, Retire Early) movement.
At its heart, the book says:
“Spend less than you earn. Invest the surplus. Avoid debt. Stay the course.”
Simple? Yes. Easy? That’s up to you.
Key Lessons to Retire Early (USA/Canada)
1. Save Aggressively – Aim for 50%+ of Your Income
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Track every dollar
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Eliminate lifestyle creep
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Live below your means, even if your income grows
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Maximize savings into 401(k), IRA, TFSA, RRSP, etc.
Rule: The more you save, the faster you’re free.
2. Invest in Low-Cost Index Funds
JL Collins recommends Vanguard’s VTSAX (US Total Stock Market Index Fund).
Canadian equivalent? VEQT, XEQT, or VFV (tracking US stocks).
Why index funds?
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Low fees
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Diversified
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Proven performance over time
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No need to time the market
"The market always goes up—eventually."
3. Avoid Debt Like the Plague
Debt is the #1 wealth killer. Collins suggests:
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Pay off all high-interest debt fast
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Don’t finance depreciating assets (like cars)
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Avoid student loans if possible—consider ROI
In both USA & Canada, debt = lifetime servitude.
4. F-You Money = Freedom
One of Collins’ most popular ideas: F-You Money — the amount of money you need to walk away from anything that doesn’t serve you: toxic jobs, bad relationships, or location limits.
In both countries, this could be $500K–$1.5M, depending on lifestyle.
5. You Don’t Need a Financial Advisor
The book strongly argues:
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You can DIY your investing
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Most advisors charge hidden fees
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The market rewards patience, not predictions
Be your own financial hero.
6. The 4% Rule – Safe Withdrawal Rate
When you’ve saved 25x your annual expenses, you can retire using the 4% withdrawal rule.
Example: If you need $40,000/year, aim for $1 million in investments.
Works in both the US and Canada, adjusted for currency/inflation.
The Retirement Path in the USA & Canada
| Step | USA Example | Canada Example |
|---|---|---|
| Save 50%+ Income | Max out 401(k), Roth IRA | Max out RRSP, TFSA |
| Invest in Index Funds | VTSAX, FZROX | VEQT, XEQT, VFV |
| Track Expenses | Use YNAB, Mint, Excel | Use KOHO, Wealthica, Excel |
| FIRE Goal | $1M for $40k/year lifestyle | $1.2M for $48k/year lifestyle |
Final Thoughts
You don’t need a six-figure salary, stock tips, or real estate empires to retire early. You just need:
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Simplicity
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Discipline
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Patience
The Simple Path to Wealth proves that financial freedom isn’t a fantasy—it’s a formula.
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