Diary Of A CEO: w/ JL Collins on the Simple Path to Wealth (Transcript)

Like some of the risks that I took to leave university to then be broke. And I was driven, I was dragged by some kind of trauma.

JL COLLINS: Right. One of the things that I’ve observed, and I think to the extent that I’ve had some success in my life, this is true: successful people do tend to have trauma in their background. At least that’s my observation. Now, I’m sure there are exceptions to that, but it does seem that people like us are striving to overcome those past traumas, to have that chip on the shoulder to prove something.

I’ve also met people who are very content to be completely lacking in ambition and to have enough to have a comfortable life and kind of do what they want to do. To have financial independence maybe, but they don’t have this drive to be successful, to make a mark on the world. And they tend to have had better childhoods.

And I think that there is, that wasn’t me. That doesn’t appear to be you, but I think there’s a lot to be said for that.

The Parable of the Monk and the Minister

STEVEN BARTLETT: You opened the book about talking about a parable of the monk and the minister. Can you tell me about that parable? Because it seems to somewhat relate to what we’re saying here.

JL COLLINS: I think very much so. And that’s the reason I opened the book with it. So the parable is there are these two boys who grew up together. They’re childhood friends. As frequently happens, they go their different directions in life as they become adults.

And one becomes a very successful, powerful minister to the king and the other becomes a humble monk in tattered robes with a begging bowl and what have you. And years later they run into each other on the road and they’re getting reacquainted and as they are, the minister takes pity on his poverty-stricken friend in his tattered robes.

And he says, “You know, if you could learn to cater to the king, you wouldn’t have to live on rice and beans.” To which the monk replies, “If you could learn to live on rice and beans, you wouldn’t have to cater to the king.”

And for me, I’ve always been a little bit more towards the monk side. I’m not a very materialistic person and I’m comfortable and able to get along on very little. And I think there’s something beautiful about needing less.

Wealth and Happiness

STEVEN BARTLETT: I have from my interviews met people who are very wealthy, even actually off camera, who are very, very wealthy and appear to be happy.

JL COLLINS: Yes.

STEVEN BARTLETT: But I think it’s safe to say that the richest people I know are amongst the least happy people I know. So if I think about the very top, the billionaires that I know off camera, they are amongst the least happy, typically, because I think whatever’s taken them there is still haunting them while they’re there.

So it could be the chip on the shoulder, the insecurity, whatever happened to them that made them so driven and obsessed with validation and climbing is still haunting them now. But I do also know people that are very, very rich and that live remarkably content lives. And I think part of it is their relationship with the stuff. I think it is possible.

JL COLLINS: And they probably keep it at arm’s length, right? They have a little psychic distance from the stuff.

STEVEN BARTLETT: Yeah. And speaking from my own journey at a very young age, up until the age of 25, I was convinced that buying a Range Rover Sport was going to really make me really happy. And the anti-climax once I got those things was staggering. It was a complete mental, it was like someone had shaken my head, my reality distorted for a second because I thought this was meant to be it.

And now I can still get things that I like. But I was saying to Will the other day that when I walked into my new house in LA, I had pre-prepped myself to know that it was going to have zero impact on my happiness. And that meant that I actually enjoyed it. Weirdly great. I was actually super grateful because I’d pre-prepped myself to have a healthier relationship with the thing, to bring the expectation down.

JL COLLINS: Exactly. So there are a couple things at play there, I think. One is it’s the journey that’s really satisfying. The destination tends to be less so. And I think that’s one of the problems with being very materialistic because, you know, if your definition of happiness is “if I only owned this watch, if I only had this watchmaker make me this intricate watch, then I would be happy.”

Well, I mean, maybe, but probably not. You’re probably going to have that watch, you look at it and say, “That’s really nice. Wow, that’s good.” And then, “Well, what’s next?”

But if you enjoy the journey or, and I think you made a very wise decision, if you reset your expectations and say, “You know, I’m going to have this nice house or this nice watch, but I don’t expect it to make me happy, but it’s going to be a nice thing to have in my life.”

Somebody once said, much wiser than me, you know, money doesn’t change who you are. It can magnify who you are. So if you’re an unhappy person and you have lots of money, you will probably still be an unhappy person. If you’re a happy person, I mean, one of the, in fact, the single happiest guy I know, his life was the biggest financial disaster of anybody I personally know. And this guy, he’s literally the happiest human being I’ve ever met.

STEVEN BARTLETT: Because he was happy before.

JL COLLINS: Because he was happy before. And there’s other things besides money that makes you happy. Money, and the reason that it was so important to me to teach my daughter this: money gives you options, right? Money allows you a lot wider range of choices in life, but it doesn’t necessarily make you happy, right?

If it allows you to pursue an option that otherwise you couldn’t pursue and that option makes you happy, that’s a different thing.

The Pursuit of Wealth

STEVEN BARTLETT: I think if I was listening to this and I was broke, like I used to be very broke, I would still pursue wealth at all costs. Because I know I heard this phrase the other day, which was, “It is easier to get rich than it is to give up the idea that getting rich will make you happy.” And I thought to myself…

JL COLLINS: And if you had to get rich, you would…

STEVEN BARTLETT: Always think 100%, you’d always wonder if that was. And you know what? So much of the unhappiness or anxiety that I had when I was, you know, my early, early innings of my life and my career came from looking down and seeing the bailiff letters, or came from the credit card debt, or “How am I going to eat today?” Or, you know, “Can’t go out and see my friends so much.”

My mind was occupied by my inability to have freedom, right? My lack of freedom, my need to get up at 8 o’clock and walk for an hour and a half to a call center was, you know, so what I managed to remove was that I wouldn’t say I added happiness, but I removed the unhappiness.

JL COLLINS: Well, and that’s a key point. You know, money doesn’t necessarily make you happy, but the lack of money can be a terrible challenge, especially in the modern culture we’ve created.

F* You Money

STEVEN BARTLETT: Okay, so if you have kids listening right now, please cover their ears because I’m going to say a swear word. Parents always message me and ask me to stop swearing. So going to say a swear word.

A lot of people are obsessed with this idea of “f you money.” Let me just give you a definition. FU money refers to a financial situation where a person has enough money to live comfortably without needing to work. And it gives you the freedom to say “f you” to anyone or anything you don’t want to tolerate, such as a job, a boss, or a situation that doesn’t align with your values.

What does that mean to you?

The True Definition of FU Money

JL COLLINS:

Yeah, so for me, that’s a good definition, but I would substitute in that definition, financial independence. FU money for me is the money you accumulate on the way, right?

So for instance, if you’re a bodybuilder, you know, financial independence is when you’re on the stage and you’re winning, you’re at the elite level. But along the way, from the moment you start working out, you get a little bit stronger. A little bit stronger. A little bit stronger. Right.

Same thing financially. The moment you start setting aside money and investing it, you become a little bit financially stronger. And that builds over time. That, in my mind, is the FU money.

Because long before you’re financially independent, that money gives you enormous freedom. You might not be able to never work again, but if you need to, you could leave a toxic job knowing you could survive for months or even years while you looked for the better job because you have that FU money. So it allows you to say “f* you” in that case to an employer.

STEVEN BARTLETT:

And if your daughter turned around, what’s her name?

JL COLLINS:

Jessica.

STEVEN BARTLETT:

Jessica. If Jessica turns around to you and says, “Dad, what is something I should not do with my money if I want to be wealthy?” What is it? What are the big… What is the first thing that comes to mind as a no, no, if I want to be financially wealthy?

Why Buying a House May Not Be the Best Investment

JL COLLINS:

The more common advice that I think you should avoid if your goal is to become financially independent at a young age, you probably don’t want to go buy a house. That’s a very controversial thing to say.

The reason you want to buy a house is because houses dramatically inflate, by and large, your cost of living. You know, you’re putting your capital into that house, and now it’s not going to be earning anything, it’s going to be sitting idly along with owning a house. You have the expenses of maintaining it, paying the taxes on it, blah, blah, blah.

If you stay in an apartment that is just enough to meet your needs, which, by the way, is what my daughter has done and continues to do, your costs will be lower.

STEVEN BARTLETT:

Explain that to me. Explain why my cost of living goes up if I buy a house.

JL COLLINS:

Sure. So people… It doesn’t have to, but people typically buy the most house they can possibly afford. The industry drives them that way.

If you go to a real estate agent, you say, “I think I want to buy a house,” right? First question they’re going to ask you is, how much do you make? How much do you want to spend? You know, and then you go to the bank and you say, “Okay, I want to buy a house. How much will you lend me?” And they’ll know how much you make, and then they’ll come back with the large number of how much they’re willing to lend you.

If you follow those guidelines, you’re going to wind up with a house that’s going to be a burden. You are not buying it from a position of strength. You are stretching to buy it. You are borrowing the most money a bank’s willing to give you. You probably don’t want to do that. I mean, you can. That’s… The bank wants you to do that because that’s how they make the most money. But that’s not the best thing for you to do. But that’s what you get drawn into.

And then when you buy that house, I don’t know that I’ve ever known anybody, including me, by the way, and I’ve owned houses most of my adult life, who’s owned a house without doing renovations on it. So you’ve got those costs. You’re going to furnish that house because you’re probably buying more square footage than you were renting before. You need new furniture, or maybe you just want better furniture for your new house. Maybe new appliances, landscaping, taxes, maintenance. I mean, the list is endless.

And people say, “Well, you know, I can buy this house and my mortgage is the same as my rent.” Well, yeah, but your mortgage is just the starting point. You’ve got all these other expenses with the house. And the other thing is, they are variable expenses.

STEVEN BARTLETT:

Variable expenses?

JL COLLINS:

Yeah, with your rent. You know, if you’re renting an apartment, you’re paying $2,500 a month for your apartment, right? You know exactly what your housing costs are for the term of your lease, right? $2,500 a month.

If you own a house, maybe your mortgage is $2,500 a month. And then you need a new roof, that’s 20 grand. Or you need a new septic system, which, by the way, I’m looking at having to put in my cottage, you know, well, that’s another 25 grand, right? And so… And you don’t necessarily… things are going to come at you.

The Cultural Trap of Homeownership

STEVEN BARTLETT:

It is a bit of a trap, isn’t it? It’s a trap that I didn’t realize this until I bought a house and most people don’t. I even sit here on this podcast doing this for a living. And then I made this stupid mistake of buying a house. And I do think it was a stupid mistake because we’ll talk about opportunity costs in a second.

But it was, in hindsight, it was a terrible decision. I spent all this money on this house. It was a house abroad. It was also a holiday home, I guess. And every time I come, all I see is things that I need to change.

JL COLLINS:

Yeah, it’s… looking at the United States, for instance. If 20 years ago, 30 years ago, you bought a house in San Francisco, you would have done very, very well financially. If you bought a house in Detroit, not so much.

So then the question becomes people will say, “Well, obviously you don’t buy a house in Detroit, you buy a house in San Francisco.” Well, I’m not an expert in real estate, but I am reading more and more commonly that San Francisco has a lot of very challenging problems at the moment. Detroit, on the other hand, where I was just visiting a couple of years ago, is enjoying a renaissance. Detroit’s coming back.

So who’s to say in 20, 30 years people won’t be saying, “You bought in Detroit back in 2025, you were golden. And if you bought in San Francisco, yeah, not so much.” Sometimes real estate, buying a house can work out in a spectacular fashion, and that’s the stories people tend to hear, but not always.

STEVEN BARTLETT:

And that’s what I tend to see in the comments section when we talk about this issue of buying a house. I was just looking at the comments section, actually, and on a previous conversation where we talked about whether you should buy a house, someone said, “I bought a house and it’s the best thing I ever did.”

JL COLLINS:

Right.

STEVEN BARTLETT:

“It’s launched my mindset in new directions. Remember that having your own space has profound psychological impacts and can be life changing for some that don’t live in a healthy environment.” The psychological impact of buying a house.

JL COLLINS:

What that commenter just said is, “can be.” And for him, obviously it’s absolutely true. I am not anti-house. As I mentioned a moment ago, I’ve owned houses most of my adult life, but I’ve never bought them because I thought they were an investment. I bought them because I thought they would enhance my life in a way I wanted it enhanced. They would make my life better.

They are, in my view, an expensive indulgence. I have nothing against expensive indulgences. That’s one of the reasons we accumulate money, right? I like some expensive… some I don’t care about, some I like, but that’s what they are. And if you can easily afford it, then by all means buy the house.

The Economics of Homeownership for Younger Generations

STEVEN BARTLETT:

Looking at some stats here, it says home buying was once a solid investment due to rising property values and lower mortgage rates. However, for younger generations, this is no longer the case because of skyrocketing home prices.

Since 1980, US home prices have increased by over 300%, outpacing inflation and wage growth. In 2023, mortgage rates surged past 7%, making monthly payments significantly higher than before. And median wages have only risen by about 15% since the year 2000, while home prices have more than doubled, making home ownership less affordable.

And lastly, the cost of renting is often cheaper than buying, especially in cities where prices have outpaced wage growth, leading many younger people to choose renting for flexibility. This point of flexibility as well is what we don’t talk about, right, which is the ability to go do something else in another country.

JL COLLINS:

Exactly.

STEVEN BARTLETT:

And my brother said this to me when I was 20. My brother’s very smart. He’s a year older than me, financial genius, and has a much different brain to mine. And I remember when I was 20, maybe 24, and I was talking about, do I buy a house? And he both told me it was the worst investment I could ever make. But he also told me to think about flexibility and my ability to get up and move.

And I was like, “What do you mean?” He said, “Well, listen, you’re in a certain era of your career where you might be called by someone in San Francisco who offers you a great opportunity and you might want to go next week.”

And actually, when I look at how my career transpired, that’s exactly what happened. I was in Plymouth, and then I went to Manchester for business, then I went to London for business. Then I went around the world to San Francisco, to New York for business. And I’m moving with the opportunity. And if I was anchored somewhere, because a mortgage does…

JL COLLINS:

Dragging that along.

STEVEN BARTLETT:

Yeah. And a mortgage does, psychologically anchor you. This is what people don’t talk about. It creates a huge amount of guilt if you then want to get up and go, because in your head, you go, “Well, I’m going to be paying double.”

The Value of Flexibility in Career and Life

JL COLLINS:

Well, I agree with everything you said. I agree with your brother. Flexibility, especially when you’re young and your career is in a dynamic phase, it is not to be underrated.

For my daughter, I mean, she loves living in Savannah. They’ve been there for three years. But she has an adventuresome soul. And, you know, she said, “I don’t know. I mean, maybe at some point I’ll want to go live in Europe or somewhere else.” Well, if you have a house, that complicates that decision.

And even if you are fortunate enough to buy in a market where your values are rising, the cost associated with buying and selling houses are enormous. The, you know, the real estate commission and the taxes and what have you. So getting in and out of a house is an expensive proposition. Getting in and out of an apartment doesn’t cost anything. I mean, maybe your security deposit, right, but that’s it. That’s very clean and simple.

But if you were to buy a house in Savannah and then say, “You know, I think I want to go live in Portugal,” well, now you’ve got to sell that house. Or maybe you have to rent it. Now you’re a landlord. You’re an accidental landlord, which was subject to my second book. You know, that’s not optimal. I mean, if you set out to be a landlord, great. But if you become an accidental landlord because you can’t sell your house that you don’t want to live in anymore, that’s not so great. So flexibility is enormously important.

The Simple Path to Wealth

STEVEN BARTLETT:

If I were to ask you what is the simple path to wealth and you had to respond in a sentence, what would that sentence be?

JL COLLINS:

Avoid debt. Live on less than you earn. Invest the surplus.

STEVEN BARTLETT:

So let’s talk about debt then.

JL COLLINS:

Okay.

STEVEN BARTLETT:

Why did you say avoid debt?

JL COLLINS:

You can never be financially independent if you’re carrying around debt. It’s a ball and chain that you drag along, especially consumer debt.

Now, to be clear, if you’re in business and your business is carrying debt as a function of running the operation for one reason or another, that’s kind of a different thing. But in terms of personal debt, if you’re running up credit card debt, if you’re leasing expensive cars or borrowing money to buy expensive cars or what have you, possibly a mortgage is in a slightly different category, but it has all the disadvantages we just talked about.

Yeah, debt’s a ball and chain. It’s like asking a swimmer to compete and strapping a weight around their waist. It just… Is it possible? Sure, I guess it is, but it’s a whole lot more difficult. So job one, if you have debt is to blow it out.

STEVEN BARTLETT:

And I mean, blowing it out is a dream for many, but it’s easier said than done.

The Tyranny of Must-Haves

JL COLLINS: I guess it simply means that you have to organize your life in such a fashion that you can divert some money to either buying your freedom investments or if you have debt, paying off that debt. You just have to do that.

And people say, well, I can’t do that. You know, I need to have the two least luxury cars. And we need to live in this neighborhood and we need to send the kids to these schools. We need to. And I call that the tyranny of the must-haves.

The more must-haves you have in your life, the less likely you are to become financially independent. Now, that’s your choice. That’s an individual’s choice. It may very well be that those things are more important to you than buying your freedom and it’s your money. It’s not for me to tell anybody how they should spend their money or what’s important to me or what’s important to them.

For me, there was nothing I could spend my money on that was more important than my freedom, which is why from the beginning, I diverted half of my income to buying that thing. It was never deprivation, right? Most people say, oh, this is a path of deprivation. I can’t spend my money. Well, not for me.

You know, I spent every dime that ever came my way. It’s just that I spent half of those dimes on the thing that I wanted to own the most, which was my freedom. And you own that by owning assets. So I wasn’t depriving myself any more than if somebody said, you know, I’m looking at buying a Mercedes or a Volkswagen, right?

If I buy the Mercedes, I’m in this big fancy car and people will be impressed. If I buy the Volkswagen, yeah, I’m in this more modest car. But then I’ve got a whole bunch of money left over that I can, say, spend on a wardrobe or going out to dinner or a more expensive apartment. It’s just a matter of choosing where you spend your money on, right?

So one of the choices, and I am under no illusion that most people who read my book will actually follow the simple path, because I think there’s just way too much cultural influence to spend your money elsewhere. But at least the people who read the book and listen to this interview will be aware that there is something else they could buy with their money, and that’s their personal freedom. And you do that by assets. And there was nothing more important to me. Nothing I wanted more. So it was not deprivation at all.

Spending for Self-Esteem

STEVEN BARTLETT: I reflect back on where I used to be in my life and if I heard this conversation then, I really, really struggled with saving money because spending money was so closely linked to my sense of self and my self-esteem.

JL COLLINS: A lot of people feel that way.

STEVEN BARTLETT: I’ve shared this story before, but when I was working in those call centers at Swinton’s Car Insurance, where I used to work, I would get my paycheck and it might be, I don’t know, £1,500 or £2,000, whatever, and like on my way home on payday, I’d go buy a 60-inch TV and I’d put it in the house and then I’d try and see if I had enough money to buy a PlayStation.

And then about a week later, when I realized that I was broke, I would sell both. And I look at that behavior as such absolute, like it’s objectively crazy behavior, like repeat crazy behavior. But it shows the extent to which I got a dopamine hit from having a nice thing. And I was trapped in that cycle of like, buy the nice thing, dopamine hit, feel validated, feel like I’m a successful person and then have to sell it a week later.

JL COLLINS: Yeah.

STEVEN BARTLETT: So I really have a huge amount of empathy for people that are stuck in this spending for self-esteem cycle and they hear people like me and you talk about these things now and it feels easier said than done.

JL COLLINS: That to me seems kind of insane. And one of the things that somebody pointed out one time is if you’re driving around in a Ferrari, you know, maybe you’re thinking to yourself, if you bought the Ferrari because you want to impress people, “Everybody’s looking at me and they’re thinking, wow, what a cool guy that is driving that Ferrari.”

No, that’s not what they’re thinking. They’re looking at you in that Ferrari and what they’re thinking is, “Wow, I would look cool if I was driving that Ferrari.” They’re not thinking about you at all. You’re making no impact on what their opinion of you is.

Getting Out of Debt

STEVEN BARTLETT: So on this point of debt, I did have some people contact me that were childhood friends of mine recently and asked me for advice on getting out of debt. And one particular friend said that he had $40,000 worth of debt and asked me for advice on it. And I really, I’m not an expert in this, so I kind of hesitated to give any advice. But the advice I’m hearing from you is essentially, you have to make a concession. You have to pull back your spending and get things back under control. You have to, I don’t know, sell your house.

JL COLLINS: So here’s some good news. Your friend is carrying $40,000 in debt. Right. My advice would be, and this is a little different than the more common advice out there, but I would look at all my debts and I would pick the one that was charging me the highest interest rate, and I’d pay the minimums on all the others, and I would focus on paying that one down as fast as I could because that’s the biggest return on my investment. And when that one was gone, I’d go to the second until I worked my way through.

It’s going to be hard. And the more quickly you do it, the harder it’s going to be because you’re going to have to make more dramatic adjustments to your life. That’s the bad news.

Here’s the good news: once you are out of debt, if you do this, you’ve developed a wonderful discipline of living on less than you earn and diverting the excess to something else that you want more. In this case, something else you want more is being out of debt. If you continue with that discipline, you now have the cash flow to begin building those assets and becoming wealthy. You’ve already developed that lifestyle and that discipline. So that’s the one ray of sunshine, if you will, in the process of getting out of debt.

The Avoidance Strategy

STEVEN BARTLETT: Okay, play devil’s advocate with me then on this one.

JL COLLINS: Sure.

STEVEN BARTLETT: So when I was 18, 19 years old, my strategy, I was well aware that I’d f*ed up my financial situation. Like, I was painfully clear. I figured out what a credit score was. And I realized that I destroyed mine and also had these letters. And I had mounting issues. I was avoiding finances, bills, envelopes, you name it. I just thought if I don’t look at it, it doesn’t exist.

Which I know a lot of people do, because when I was writing a previous book that I wrote, I looked into some of the stats about humans’ ability to avoid, whether it’s health situations. If a friend of yours gets a bad diagnosis, I was reading a study that said some people are more likely to not go get checked even if their friends had it, because they just want to avoid it.

JL COLLINS: Right.

STEVEN BARTLETT: And then with national finances, I was reading a study that said we’re incurring billions and billions and billions and billions of debt as a society just because we don’t look at our bank balance, we don’t open envelopes. So I know I’m not the only one.

JL COLLINS: No, not at all.

STEVEN BARTLETT: My strategy was, this is such a dumb…

JL COLLINS: I’m not sure I want to hear.

STEVEN BARTLETT: Yeah, but go ahead. Honestly, and this sounds like crazy talk, but it’s just the truth. In my head, my strategy was I’m going to get so rich that I outpace this debt and then I’ll deal with it later. Right. My strategy was if I can just get really rich, which is kind of the inverse of what you’re saying.

JL COLLINS: Right.

STEVEN BARTLETT: Then this debt won’t be a problem. At 18 or 19 years old, you don’t know the world. You are guessing.

JL COLLINS: Right.

STEVEN BARTLETT: And I was guessing that I could earn my way out of it. The probability says I was wrong. The probability says that I was delusional or just like I watched too many rap videos or something.

JL COLLINS: Right.

STEVEN BARTLETT: So objectively, that is a reckless choice. Even if it’s true and it ends up being true for you, you end up being what? It’s still a bad choice because probability is stacked against you.

JL COLLINS: Well, that’s true, but you just made a critical point in that you can make a bad choice where things work out well for you.

STEVEN BARTLETT: Yeah, exactly.

JL COLLINS: So a great example of that is investing in Bitcoin. Right. I’m not a proponent of investing in Bitcoin. Certainly for those people who bought Bitcoin 10, 15 years ago, they’ve done extraordinarily well. They got lucky. Lots of speculations don’t work out that well.

So if you are speculating, then it might work out extraordinarily well for you, but you’re taking some pretty heavy risks in doing that. Right. It’s same thing with a lottery ticket. I mean, the chances of winning the lottery are infinitesimally small. But people buy lots and lots of lottery tickets. Somebody does win it, but that’s probably not a good way to spend your money.

The Bitcoin Question

STEVEN BARTLETT: Bitcoin. You’re not a fan of Bitcoin?

JL COLLINS: No, and I’m not opposed to Bitcoin existing in the world, but for me, it’s a speculation. And I’m not a speculator.

STEVEN BARTLETT: When you say speculation, give me some color. Because I’m sure there’s some people who are listening now that are either thinking about Bitcoin or have invested in Bitcoin.

JL COLLINS: I mean, if you want to speculate that Bitcoin, I would recommend against it. So people might push back and say, well, but J.L., you were recommending against it 10 years ago, which I was. And you’ve been wrong. I mean, absolutely wrong. It’s been great. Ten years. It’s done far better than the S&P 500.

Well, that’s true. If you’d had a crystal ball. If I’d known that 10 years ago, yeah, I would have been in Bitcoin. Right. We don’t have crystal balls. So the question isn’t how has Bitcoin done in the last 10 years, it’s how is it going to do in the next 10 years? I don’t know the answer to that, but that’s the question.

Is it worth $100,000 a coin now? Is it going to continue to grow at that pace that you regret that you missed over the last 10 years? That’s the question you have to ask yourself.

STEVEN BARTLETT: But I could say its success is evidence that it’s serving some kind of utility for some people somewhere. Its success means that there is demand for it by very nature that the price has increased so crazily over the last 15 years.

JL COLLINS: Yeah. And that’s an argument that people make, and there’s a lot of debate around that. Right. Is, you know, what is the function that it has or that it’s going to develop? And you might well be right. I don’t know the answer to that question.

It’s not currently at least a currency because it’s way too volatile to serve as a currency unless you’re doing illegal things that make it more attractive than the volatility makes it unattractive. So that’s not necessarily good for society. So it can’t function as a currency. So right now it’s just a speculation.

Is it going to grow into something that’s more functional? Well, you know, listening to one of the other interviews you did, that woman absolutely believes that that’s what’s happening. And Cathie Wood, that’s why she’s in Bitcoin. And she may be right, but she’s speculating. And again, I have nothing against speculating as long as you understand, as I’m sure she does, that that’s what you’re doing.

STEVEN BARTLETT: You’d prefer investing.

JL COLLINS: I prefer to have an engine creating wealth behind where I put my money.

Mortgages vs. Investing

STEVEN BARTLETT: I had a text message from a really good friend of mine who my audience will know because they’ve been on the show before as a guest and they’re very well known in the UK. They text me and said, “Please, can I ask you a question? If you had mortgages and you had a lump sum of money thinking about the future of AI, potential market crashes, would you pay off chunks of the mortgage or would you invest? My feeling is that stocks aren’t really safe. Am I being paranoid?”

Understanding Interest Rates and Mortgages

JL COLLINS: Well, that’s there are a couple of questions embedded in that. So the first question is, would I pay off a mortgage? And the second question is, are stocks safe? Right. So the mortgage one first to me is pretty easy. It kind of depends on your interest rate.

STEVEN BARTLETT: What is an interest rate?

JL COLLINS: So an interest rate is what you pay to borrow money. So when you get a mortgage, you’re borrowing money, right. You’re borrowing it from a bank or a financial institution and they want to be paid for letting you use their money.

And 3, 3.5% or less, that’s really cheap money. I would hold on to that. I would be in no hurry to pay that off. On the other side, if you have a mortgage rate that, say, 6% or higher, well, when you pay off that mortgage, essentially you’re locking in a guaranteed return of that interest rate. Right.

So if you pay off an 8% mortgage, you’ve locked in an 8% return on that money effectively. And then to finish the thought is if your interest rate’s between those two, like 3.5% to five and a half, 6%, then I would say it would depend. Whether you paid off or not is what makes you emotionally more comfortable.

And there’s value in being emotionally comfortable. So if you are comfortable carrying the debt, you might say, well, I think I can do better in the stock market, so I’m going to carry it. If emotionally, like me, you just would rather not have any debt at all, then you blow it off.

STEVEN BARTLETT: Maybe we could use the coins as an example of what an interest rate is.

JL COLLINS: Sure. Let’s say I’m sitting on this pile of gold and you want to borrow some of my gold. I’m happy to loan you, Steven, these 10 very valuable old pieces, but I don’t like you well enough to just let you borrow them for free. I want to be paid, I want to get a reward back for that.

So when you return these gold pieces to me, in a year, you’re going to return 11 gold pieces to me. You’re going to pay me 10% because an extra gold piece is 10% of these 10. Right. Make sense?

STEVEN BARTLETT: Yeah.

JL COLLINS: That’s what interest is.

STEVEN BARTLETT: So if I say, okay, well, I’m going to buy a house.

JL COLLINS: Right, you’re going to take those 10 gold pieces. Go ahead and take them.

STEVEN BARTLETT: So I’m buying a house that costs 10 gold pieces.

JL COLLINS: Right.

STEVEN BARTLETT: So I’m going to accept your 10% interest rate.

JL COLLINS: Okay.

STEVEN BARTLETT: Am I paying 10% a year on the total?

JL COLLINS: On the balance? So the way a mortgage works is in the, let’s say it’s a 30 year mortgage. You’re going to be giving me a certain amount of money every month. Right? That’s your mortgage payment.

And in the beginning, most of that payment is going to be interest to me. And a very tiny sliver of it will be paying down the principal part of the 10 gold pieces that you bought or that you, yeah, that you borrowed. A very tiny sliver.

And then over the course of 30 years that ratio changes as you pay down the debt and less and less of it is interest payments and more and more of it is paying down the principal until at the end of 30 years you paid all the principal and you paid me a fairly enormous amount of money in debt over that or in interest over that 30 years.

STEVEN BARTLETT: And how do I get a good interest rate? How do I get a very, very low interest rate? And what is a low interest rate on a mortgage?

JL COLLINS: Yeah, so the only way you can get a, so first of all, you’re going to pay basically whatever the current interest rates are.

STEVEN BARTLETT: Who sets the current interest rates?

JL COLLINS: So the Fed sets an overall interest rate. You’ve heard the Fed will raise or lower interest rates and that will influence what lenders like bank and mortgage companies will charge. It doesn’t require them to do a certain level, but it will influence up or down how much they’re going to expect in return for their money.

STEVEN BARTLETT: The Fed is a government.

JL COLLINS: Yeah, the Fed is a government agent partially because the Fed is anticipating inflation by how they set interest rates. So if I’m lending you money and I’m worried about inflation, if I lend you my 10 gold pieces and say I want 11 back in a year, 10%, but inflation is 15%. Well, I’ve just made a very, very bad deal.

So if I think inflation is going to be 15%, I’m going to want two gold pieces back. It’s maybe, or, you know, so I’m making a profit above and beyond inflation.

So going back to your question, how do you get a good mortgage rate? Well, you shop around to various lenders at the time you want the mortgage and see, you know, who’s offering what and there’ll be some variation within an eighth of a percent or a quarter percent or something.

But for the most part they’re all going to be very tightly put together because they’re looking at the overall projection of what inflation is going to be, what they can charge, what the cost of money is, what they can charge in interest, and then competitively what they have to do to get your business.

So there’s not going to be a lot of variation. You’re not going to get a significantly better interest rate than somebody else. But if you shop around, you can probably do a little bit better.

Interest Rate Fluctuations Over Time

STEVEN BARTLETT: And interest rates have been fluctuating quite a lot over the last 20 odd years. In the early 2000s, interest rates in the US were relatively high, peaking at almost 7% in 2006 due to efforts to curb inflation.

And then after the financial crisis, they dropped a little bit and was, looking here post 2008, central banks around the world adopted ultra low interest rates to revive economies. US rates were slashed to near 0% by 2008 and remained there for nearly a decade.

JL COLLINS: Right.

STEVEN BARTLETT: COVID-19 pandemic interest rates led to another record in cuts globally with the US Fed lowering interest rates to 0% to 0.25% to combat economic disruption. So does this mean I should really be waiting for a time when the interest rates are really, really low if I want to buy a house?

JL COLLINS: Well, not necessarily, because you never know when that’s going to happen. I mean, some people have said predicting what the stock market is going to do is very, very difficult. Predicting where interest rates are going to go even more so.

So I think if you’re going to buy a house, then again you buy it based on whether you can easily afford it, whether it meets your needs at a given time, and you deal with the interest rates you have to deal with. And of course they’ll be part of the equation in terms of how much you can afford, because the interest rate on your mortgage is going to have a lot to do with how much you have to pay every month.

STEVEN BARTLETT: And it’s quite high at the moment.

JL COLLINS: Interest rates high compared to what? So the first, you know, right now mortgage rates are 6%, 7% somewhere there. The first mortgage I took out was 18%. That would have been in 1979, because in the 1970s we had really high inflation. And when you have high inflation, you have high interest rates. Right.

So to me, I hear a 6% mortgage rate and it doesn’t sound bad to me, but for people who grew up where mortgage rates were 2 and a half, 3%, yeah. I mean, it’s huge. It depends on your perspective.

Is Investing in Stocks Safe Right Now?

STEVEN BARTLETT: And the other half of the lady’s question who sent me that text message was around, is investing in stocks safe right now? And she did sort of preface it by saying the questions in the context of AI all of this disruption that’s going on in the world, people are going to lose their jobs, etc. Like, is it safe to invest in stocks right now?

JL COLLINS: So depends on your time horizon. So stocks are the single most effective, strongest wealth building tool that’s ever been created, but they are also very, very volatile.

So when she says are stocks safe to invest in right now? What I hear is very short term thinking. And stocks are never safe to invest in for the short term because they’re volatile at any given moment. They can take a deep plunge. And that’s a perfectly natural part of the process.

People get all crazy, especially if you watch the news. People go insane and panicked. But crashes and pullbacks in the stock market are perfectly natural part of the process. They are very, very difficult, if not impossible to predict when they’re going to happen. But that’s the reason you never want to invest in stocks for money that you’re going to need in the near term.

If you zoom out for longer periods of time, which is what I recommend, stocks are stunningly reliable. I mean, there are very few times over the course of 10 years where stocks have not given you a good return and you got 20 years. And like, I mean, it’s very rare.

So if you look long term, stocks are extremely safe and extremely powerful in building wealth, but they are very volatile along the way. So you have to be willing and able to endure that volatility if you’re going to panic and sell when the market drops, not if because the market will drop. It’s a perfectly natural part of the process.

If you’re going to panic and sell when that happens, you do not want to invest in stocks because they will leave you bleeding on the side of the road. Following my advice will leave you bleeding on the side of the road if you panic and sell.

It’s 100% dependent on tying yourself to the mast during the storm and ignoring the volatility and continuing to invest into it because now you’re actually accumulating shares on sale because prices are down, because the storm never lasts. It always blows over and the sunshine comes back out and prosperity returns.

The Emotional Side of Investing

STEVEN BARTLETT: You’re talking here about the emotional side of investing, which is critical.

JL COLLINS: Yeah, if you can’t control your emotions, you’re going to be selling at the wrong time and buying at the wrong time.

STEVEN BARTLETT: So this is such a huge part of it that people don’t talk about enough. They talk about tactics, strategies, what to invest in, etc. But they don’t talk about the emotional side, which is really like arguably an even bigger element of this. Because if you think about even how the brain is set up and what drives us most, it’s fear. It’s emotion.

JL COLLINS: Fear and greed.

STEVEN BARTLETT: And when the prices drop, I mean, we’ve all got a story. So many people listening. I remember my first ever investment. I put £10,000 into Facebook stock a long, long, long, long time ago. And then it went down and I sold. I thought, I’m never investing again.

And if I just left it, God, that would be worth so much money. Probably be worth six figures now. But I hadn’t, no one had ever taught me about the emotional side. And actually part of the reason I sold it was because I needed that money.

JL COLLINS: So there’s two things there. One is the emotional side of selling it. The other thing is investing money that is not for the long term. Because you turned out you should never invest in money in the stock market that you’re not willing to commit for decades.

This is a long term horizon because that’s what allows you to weather the storms. If you’re saving for a house, for instance, well, you probably don’t want to be in the stock market.

STEVEN BARTLETT: The best investor I’ve ever met is my girlfriend because she loses the password to the investing app. And honestly, every like two years ago, babe, do you remember? It was like you bought loads of that index fund or Bitcoin or whatever it is. I was like, do you know the price of it?

And she’s like, no, I forgot. I’ve forgotten the password to the app. And we always like log back in once every two years and look at it. I’m like, oh my God, baby rich. And she’s like, oh, okay. And then she loses the password again. She forgets it.

The Power of Not Tinkering

JL COLLINS: This is an incredibly important point you just touched on. So Jack Bogle, the guy who created retail index funds that we can invest in now, created the Vanguard Group in 1975. Bogle once said, you know, invest in the S&P 500 and don’t even open your statements when they come. Just let them stand. Don’t even open them for 20 years and then open the final one. And have a cardiologist standing by because you will be stunned at the level of wealth that you’ve accumulated.

One of the things that I wrote this book for my daughter. Right. My daughter sounds like she’s kind of like your girlfriend. She’s very smart, but she has zero interest in this financial stuff. That is a superpower. Because unlike me and maybe a lot of people listening to us who are interested in this stuff and who are watching the market all the time, she and your girlfriend are never going to be tempted to panic when the market drops because they’re not going to notice the market dropped. Right. Because they don’t care.

And the less you tinker with your investments. Charlie Munger, who was Warren Buffett’s partner, once said, “the worst thing you can do as an investor is get in the way of compounding.” Right? And that means dancing into the market, trying to sell and buy back in and what have you. Just let the compounding run.

I get so many people who read my work and they say, “wow, JL, I really get it. And it’s wonderful and you’re absolutely right about everything. But if we just did this one little thing differently, it would be even better.” And they are, I’ve come to think of them as the tinkerers. Right.

STEVEN BARTLETT: Are they men?

JL COLLINS: I think a lot of them are men.

STEVEN BARTLETT: I think.

JL COLLINS: I think women are a little less inclined to tinker because men put their masculinity on the line in doing these things and that’s not useful.

The Gender Gap in Investing

STEVEN BARTLETT: I asked the question about men and women because I got some stats here from actually from Vanguard that says men are 70% more likely to invest in high risk assets like individual stocks versus safer assets than women. Men’s portfolios are 50% more volatile, which leads to higher potential returns but also greater losses as it relates to men.

Again, despite having higher risk taking, men underperform women in long term returns annually due to over trading, tinkering and timing mistakes. Tinkering. And men trade 45% more often than women, resulting in more fees because every time they make a trade, they pay a fee and lower gains. That’s according to Berkshire Hathaway.

The summary here is that men take more risks but in the long term tend to earn less because of frequent mistakes and emotional trading, whereas women are more cautious and their approach tends to yield better returns.

JL COLLINS: So you know what we learned here? Yeah, I have a very strong feminine side.

STEVEN BARTLETT: Oh, gosh.

JL COLLINS: Yeah.

STEVEN BARTLETT: Damn. You talked about compounding. You talked about how one should maybe not open the envelope that has the stages.

JL COLLINS: Well, that’s Jack Bogle who said that, but I agree with it.

Understanding the Compounding Hockey Stick

STEVEN BARTLETT: Yeah, I don’t have to explain the graph I’ve just passed you for you to know what that is right on the bottom. The red line is 11% returns, so.

JL COLLINS: The blue line that’s running fairly flat is the contributions to this hypothetical investment. And the red line is the value that, how it grows. And what’s striking, and this is what’s striking about compounding in general is that the two track each other almost exactly for a surprisingly long time and then they begin to diverge and then the compounding makes the value of the investment skyrocket. It hockey sticks.

And I didn’t know you were going to show this to me, but what’s interesting to me about this is I used to do these chautauquas. They were events where we take a small group of people to some cool place in the world and hang out. And there were people who followed my work and I would have one on one sessions with them and we talk about whatever they wanted, but mostly it was their finances.

And very commonly these people would lay out their investments, their finances and they would ask, “am I financially independent?” And that’s a, there’s a very simple mathematical formula about that. How much do you spend? I spend $100,000 a year. Okay. If you take the 4% guideline for withdrawal. So a guy named Bill Bengen came up with the idea that you could safely withdraw 4% of your portfolio and it would continue to survive over time. And it would. So you could pull that out without depleting the portfolio.

There was a woman who came to one of our chautauquas. She was a banker, so obviously knows her way around basic math. Right. She was at the end of chautauqua, she was going to take a new job starting that Monday, was going to pay her a million dollars a year. And we’re going over her finances and she said, you know, “I’ve got $5 million invested. Am I financially independent?”

Well, I can’t answer that question until I know how much are you spending. So I’m spending $100,000 a year. Okay, well, $100,000 a year. If you multiply it by 25, you get $2.5 million. Four percent of $2.5 million is $100,000. Right. So that’s how that math works. So if you need $100,000 to live on, you need $2.5 million invested. Make sense?

STEVEN BARTLETT: Yeah.

The 4% Rule Explained

JL COLLINS: Okay. So you can look at it either way. You can say, I’ve got $2.5 million. If I take 4% of that a year, that’s $100,000. Or I’m spending $100,000. How much do I need? You multiply that by 25. $2.5 million.

STEVEN BARTLETT: So just to make sure I’m clear, if I look at my investment portfolio and I have $100 in there, if I can live, are you saying that if I live on $4, which is 4% of my investment portfolio, then I’m financially independent?

JL COLLINS: Right. That’s a good. Now it’s a good guideline. I mean, there’s lots of variations, but this is a guideline this financial advisor Bill Bengen came up with. And then there was a thing called the Trinity Study, which was done, I want to say, in the 90s, that looked at a lot of these scenarios and basically verified that this was a very good baseline.

So 4% is, I don’t like the word rule because that implies that it’s hard and fast. But it’s a great guideline if you want to have an idea of whether or not you’re financially independent or not. This is a good guideline.

So anyway, this woman says she’s spending $100,000 a year and she’s got $5 million. She wants to know, “am I financially independent?” And I said, times two. I mean, you have twice as much money as you need given your level of spending.

So the question that I always had going back to this little chart is how? And I would get this question a lot, Steven. You know, they’d show me their numbers and they would very clearly be financially independent based on that math we just discussed. And these were smart people who can easily do basic arithmetic. How is it that they’re asking me this question?

And suddenly it dawned on me. This is how. Because compounding is a hockey stick. It goes along and kind of doesn’t appear to be happening. And then it slowly starts to happen, and all of a sudden it’s way up here. It happens so quickly and so stunningly. They can’t quite believe it turned out. It’s not that they couldn’t do the basic math. They certainly could do the basic math.

What it was, is they couldn’t quite believe what the math was telling them. And they wanted me to, it’s like, “you see what’s on that wall over there? I mean, are you seeing what I’m seeing? Because I can’t quite believe that I’m seeing that. I need you to confirm that. Yeah, you’re seeing the same thing I’m seeing.”

STEVEN BARTLETT: And in this example, all it is, is someone has, you know, they started with zero, and they’ve paid in a small contribution every year to their investment. The investment is getting 11% return a year. And suddenly the thing goes. I think that was one of the most pivotal moments in my life where I went online five, six years ago and looked at a compounding interest calculator.

JL COLLINS: It’s stunning.

STEVEN BARTLETT: It is stunning.

JL COLLINS: It is absolutely stunning.

STEVEN BARTLETT: And it shows that if you just leave your money in a place where it’s getting this kind of return over time, everything seems to take care of itself.

When Everything Becomes Free

JL COLLINS: So let me close the circle in a sense on that subject, because one of the things that I think gets overlooked with my book is this is “The Simple Path to Wealth,” which means if you follow it, you will become wealthy. Right?

So we go back to, you know, buying those things that people maybe want to buy, whether it’s the fancy car or the house. Well, once you become wealthy, you can not only buy those things, but you’re buying them from a position of power. Right. You can easily afford them. You become financially independent, which means that your investments are throwing off more money than you’re spending.

My wife and I are basically pretty naturally frugal people. And that’s one of the ways, I suppose, that we got to where we are. But that doesn’t necessarily serve us at the level of wealth we have now. And so we still have this tendency to say, “oh, we’re thinking about getting this stuff, how much does it cost? And we really want to spend that money.”

And depending on who it is, either she’ll turn to me or I’ll turn to her and say, “it doesn’t matter, it’s free, everything’s free.” And that’s a very liberating way to look at things. So that’s where the simple path ultimately will get you. That’s what I bought all those years ago.

Enjoying Life vs. Building Wealth

STEVEN BARTLETT: One of the thoughts that I had, which I do think is somewhat illogical, was my brother and me are very different people. So he was very, very frugal and I was reckless. And one of the ways that I self justified my recklessness was, “well, you know, you’ve got to enjoy life. And I’m only young once so I’m only going to get the opportunity to do some of these things that are part of being young once. Going to a nightclub and buying champagne and partying, you know.”

So I thought, yeah, I could save and save and save and save and I could get to, you know, 70, 80 years old and have all this money. But what is the point if I haven’t like enjoyed myself?

JL COLLINS: I think it is a mistake to think that you need to spend money to be happy, to enjoy yourself. And the other thing I will say is that it’s a lot more useful having money at this age than it would have been in my 20s because money buys comfort, among other things, and comfort becomes much more important to you as you age.

The Psychology of Future Self and Financial Planning

STEVEN BARTLETT: They did a study where they put people in a brain imaging scanner and they asked them to think about themselves tomorrow. Then they asked them to think about themselves in a couple of years. Then they asked them to think about themselves in 10 years time and they looked at the brain.

Then they did another study where they got the same people to think about a celebrity they didn’t know, I think it was Matt Damon or someone famous like that. And what the study proved was that we think about ourselves in 10 years time in the same way that we think about Matt Damon.

The further away the time horizon, the more it becomes a total stranger. And so I was writing recently for a chapter in my upcoming book about this idea that our future self is a stranger to the brain. Thinking about me when I’m 60 is like thinking about Matt Damon, right? I don’t know that guy. So why do I care? What do I care about protecting him?

I think this kind of speaks to what we were saying. There is young people, and even me as a young person kind of didn’t really give a f* about 60 year old me, right? Like it’s so far away that I don’t really care about protecting his interests. I almost think that’s a different person. He can figure that out. And you are, how old are you now?

JL COLLINS: I’m 75.

STEVEN BARTLETT: So you have the wisdom of hindsight. So you can tell me as a 33 year old what it’s like to be both 33 and 75.

JL COLLINS: When I was 33, I didn’t think about me at an older age at all. It never crossed my mind to do such a thing, right? So I was not doing what I was doing for the benefit of 75 year old JL. I was doing it for the benefit of 25 year old JL, 30 year old JL, right?

Remember, going back to an early part of our conversation, what my definition of “FU Money” is. It’s the money that you’re accumulating before that gets you ultimately to being financially independent, which is when you no longer need to trade your labor for money, right? Your money is doing all that. I wanted that right now.

So when I was 25, I’d saved the princely sum of $5,000, which adjusted for inflation would be about $25,000 to $30,000 today. And I wanted to go backpack around Europe, but that meant quitting my job, which I kind of liked. But the fact that I had that money gave me the financial strength to go in and negotiate that deal. If I was living paycheck to paycheck, I wouldn’t have had that.

I was far from being fully financially independent. So I wasn’t doing this for 75 year old JL. I was doing this right now for 25 year old JL. And it’s just like when you work out and clearly you do, right? You don’t go to the gym thinking, at least I’m making a presumption here, I’m doing this for 75 year old Steven. You’re doing this because you want to be stronger tomorrow than you are today for 33 year old Steven.

So that’s my way of thinking about it. I never did this for future me. Maybe some people do. And that’s probably not a bad exercise. That’s probably a bit of wisdom in that. I wasn’t that smart.

STEVEN BARTLETT: So you would save $5,000 a year?

JL COLLINS: Well, in those days, my first professional job paid me $10,000 a year and I saved $5,000. Yeah, I saved half of it.

The Power of Compounding Returns

STEVEN BARTLETT: Going back to this point of compounding and how important it is to start investing in things that will offer you compounding returns. If you started investing $500 per month and you got an annual return of 8% because you’re investing in some of the things that we’ll talk about in a second, in 35 years, you will be a millionaire.

You’ll have more than a million dollars. You’ll have $1.043 million over those 35 years. You would have invested about $200,000, but you would have made $850,000 from the interest over that period of time.

JL COLLINS: Well, just to be clarified, not necessarily the interest, but the growth. That 8% is not interest. It’s growth. Some of it might be dividends in the case, which is kind of a form of interest you think of, but it’s not. Just to be technically correct, right.

STEVEN BARTLETT: Which is interesting. So if I was, when I was born, if my parents had put $500 a month away in an investment that we’ll talk about now, by the age I am now, I would have roughly been a millionaire. Just from them putting $500 a month away for me. It’s pretty crazy.

JL COLLINS: Yeah, but that’s the power of compounding. I mean, it’s very gratifying to me that twice a year I’m a guest lecturer for a friend of mine who’s a professor at University of Colorado in Boulder. And it’s always fun to talk to her students because they’re exceedingly bright, they ask great questions and it’s just stimulating for me.

But I think about these young people. I mean, these are 18, 19, 20 year olds who are thinking about doing this stuff at that age. And the remarkable amount of time that they have for this compounding to work for them, it’s just incredible. They are going to be so much better off than if not.

So let me throw out a tip for you, if and when you ever have kids and for anybody who’s listening who has young children. As your kids start to grow and hopefully they get part time jobs, right, they start whether it’s shoveling snow or busing tables at a local restaurant or whatever it is, and they start earning some income. Well, you can take that income and up to, I think it’s $7,000 is the limit now, put that in a Roth IRA, which will never be taxed. It will grow tax free forever.

And they’re going to be by definition, because they’re making almost no money, they’re not paying any income tax. So you don’t need any deduction from that. And it doesn’t have to be their money. So let’s say your kid makes $3,000 during the course of a year. You can take $3,000 and fund a Roth IRA for them.

Imagine just if they never added anything other than that. You know, you do that until they get out of college or whatever. You know, that baseline is going to grow tax free for an extended period of time. That’s one of the great keys to wealth building is just time.

The 50% Savings Rule

STEVEN BARTLETT: And is that advice that you still believe in that people should be saving 50% of their income?

JL COLLINS: Yeah, I think it’s a good rule of thumb. It gets you to financial independence in a pretty reasonable, depending on what the market does, in say a 10 to 15 year time period.

The pushback that you might anticipate is from people who say that’s impossible. Nobody can save 50% of their money. That’s silly. And I’m sorry, but I did it. And I’ve now, at this point, I’ve known countless people have done it. So it’s certainly, you may choose not to do it, but it’s certainly possible.

STEVEN BARTLETT: Let’s say you’re earning $40,000 a year, which is the low end. The average median household will be, let’s say, $3,000 a month. So you’re earning $3,000 a month. You’re then going to pay tax on that. This is what my math says here. It says very little tax would be paid after all of your taxes. And so you’ve still got roughly $3,000 a month, but $2,900, which you would take home.

So I would need to save $1,400 of that, which means my total expenses need to be $1,400 a month. So first thing I need to do is live somewhere very, very affordable. Depending on where I live, you know, what city I live in, then I need to basically radically reduce my expenditure to be able to save 50% a month.

And I guess the question is most people would assume they wouldn’t like that lifestyle. They wouldn’t like to prepare their own lunches every day. They wouldn’t like to not have a Starbucks coffee. They wouldn’t like to live in a small shoebox and probably socialize a lot less. So I guess that’s the key rebuttal is, I guess, yeah, it’s possible.

JL COLLINS: There’s a chapter that talks about this with an even lower, because when I was writing the book, I think I used a $25,000 annual income. So the math works. Is it easy? No. But it goes back to fundamentally, what is it that you want?

You said, well, I may not like that. I might want to have lattes and all these other things. Well, that’s your money, that’s your prerogative. But time is going to happen regardless of what you do. And if you say instead of having those things now, I’m going to spend my money on buying my freedom, you will get to the point where everything is free, including those lattes.

Tax Advantaged Investing

STEVEN BARTLETT: So let’s talk about investing then. We have two buckets here on the table for an analogy around tax advantaged investing. I’m going to take your lead on this.

Tax-Advantaged Investment Accounts

JL COLLINS: Okay, so if you dump that bucket in there, I’ll dump this bucket in here. Okay. The idea is that, and I’m going to speak in terms of the United States, the government provides savings vehicles that are tax advantaged to encourage people to acquire money for their old age.

Right. So in the United States there’s things called 401k or 403b. These are employer related plans where you can divert part of your income and the government specifies how much you can divert and they won’t tax you on that. And you put it into an investment bucket, into an investment account of some sort, you get to choose how you want to invest it. But that would be the bucket.

And that means that if you had however much money this represents went into your 401k or your IRA, which is something you would do on your own privately, which is also tax advantaged. Right. So in the example that you’ve just had handed me, they’re saying that this would represent $20,750, which is before tax and with a match.

So 401ks companies will frequently match part of your contribution. So you say, I’m going to do 5%. And they might say, okay, we’re going to match the first 2% or whatever, which you should always take advantage of because that’s free money.

So this is not taxed immediately. And you invest this money, let’s say you invested in a total stock market index fund, which would be my recommendation. So you get to invest all this money in your total stock market index fund.

If instead you do it after you pay taxes on the same amount of money? Well, by the time you pay taxes, you’re going to have about half of what it was before, which is $10,340, which is what is represented in here, roughly half the number of gold coins.

Now, both of these things grow at the same rate because we’ve invested them in the same thing, right? So they’re making 11% a year, whatever it is. So this is obviously going to grow into a much bigger pile at the end of 30 years or 40 years or whatever it is than this is, because you’re starting with a bigger pile. So that’s the advantage of deferring taxes.

Understanding Tax Deferral vs. Tax Avoidance

Now, the thing that people tend not to think about or talk about that’s incredibly important is that it is not avoiding taxes, it is deferring taxes, which means that ultimately the government is going to want their money, they’re going to want their cut.

And typically that happens. I think in the United States, the age is 73 or something when you’re required to begin taking money out of these accounts. It’s called an RMD, a required minimum distribution.

So if you haven’t started withdrawing money from these accounts by then, the government will require you to begin on a schedule based on your life expectancy to start pulling that money out, because they figure they’ve waited long enough and now they want their cut. Okay, so it’s not tax free, it’s tax deferred. Important thing to understand.

If you start taking this money out before a certain age, and if memory serves me, it’s 59 and a half in the US, then you will pay tax on it as you do whenever you withdraw the money, and also a penalty, right?

So they want you to keep it in at least until you’re 59 and a half, but they want you to start taking it out at some point in this case, I think when you’re 72 or 73 or something like that, and that’s when they collect their money.

So you say, well, okay, if that’s the case, then what am I doing here? Because I got to pay the taxes eventually anyway. And mathematically, if your tax rate is the same, it doesn’t matter if you’re tax deferred or not. The end result of amount of money that you have will be exactly the same.

The speculation is, and it’s true in the vast majority of cases, that when you retire and you start living on this money, you start pulling it out, you will be in a lower tax bracket, so you will have to pay some taxes, but you won’t have to pay as much as when you were working and you were in a higher tax bracket. So that’s the gamble you’re taking.

A Personal Example

Now, looking at me personally as an example, this didn’t work out for me. So I did IRAs and 401ks when I was working in my corporate career, put aside a fair amount of money in them. Now, as it turns out, I’m in a higher tax bracket than I have ever been in because of the success of the activities that I do today.

I had no idea that that was going to happen. And now I’m at that age where I have to take RMDs. So RMDs are coming out at a higher tax rate for me than when I, than the tax benefit I got, deferring it. But that’s unusual.

Most people will benefit from doing this because in their retirement they won’t have an income or their income will be very modest and their tax rate will be equally modest. And it will work out very nicely for them. But that’s basically how that works. Does that make sense?

STEVEN BARTLETT: It does, yes.

JL COLLINS: Okay.

STEVEN BARTLETT: And to try and summarize it in a way that I fully understand. Check. I understand is every month when I’m paid, I have an opportunity before that money comes to me to invest some of it. And around the world, whether it’s Japan, Switzerland, India, South Korea, Germany, Australia, UK, Canada, there’s always some kind of system to do this. Right?

JL COLLINS: Yeah.

STEVEN BARTLETT: So I can say, okay, I’m going to get paid $1,000 this month. I’m going to put $100 of that before I even get it into one of these investment accounts. It’s not going to be taxed until…

JL COLLINS: And your employer might match part of it or all of it.

STEVEN BARTLETT: Yeah. So my employer might also add $100 to it or part of it. That’s going to compound over time. I can take it out whenever I want, but if I take it out early, I get a penalty and I pay tax.

But assuming that I’m not going to be earning as much as I do now when I’m older, when I take it out at 65 years old, I’m still going to pay tax. But a low rate of tax.

JL COLLINS: There’s no penalty at that point. And presumably you’ll be at a lower tax rate. Right.

STEVEN BARTLETT: So it really only works if you’re at a lower tax rate when you’re older.

JL COLLINS: Exactly. So most people work and then they retire at a certain age and that income from their job goes away. So by definition they’re in a much lower tax bracket. So for the vast majority of people, this works out very nicely.

Where to Invest Your Money

STEVEN BARTLETT: And you talk about, because people will still have to make a decision what they want to invest in. Where do you think we should be investing our money at this moment of time? For the average person, what should they be putting their money into? With everything you see happening in the world, you said not Bitcoin, but what should we put it?

JL COLLINS: I’m an advocate of investing in broad based, low cost stock index funds.

STEVEN BARTLETT: What is that?

JL COLLINS: An example of that is VTSAX, which is Vanguard’s Total Stock Market Index fund. It invests in virtually every publicly traded company in the United States of America. The number of those varies, but it’s roughly 3,600 companies.

STEVEN BARTLETT: So you’re basically investing in America.

JL COLLINS: There are a lot of private companies that I’m not invested in, but I’m in every publicly traded company in the country. And that means everybody from the factory floor to the CEO is working to make me richer.

Now, some of those companies are going to do extraordinarily well and they’re going to succeed dramatically. And because this fund, as most funds like it are, is cap weighted, and I’ll explain that in a minute, the more successful the company is, the more of it I will own.

So cap weighted simply means that the larger the market capitalization of the company is, the valuation, right, the market capital. The larger that is, the greater the percentage of the fund it will represent.

So you may have heard people say that the top 10 companies in the S&P 500 have an outsized representation percentage wise, of what they. Well, that’s the reason it’s cap weighted. So I benefit from that success.

Right now, if one of those companies falters and starts failing on their execution or a more aggressive, better organized competitor comes along and displaces them, then they will drift away. But I’m okay with that because whatever that new competitor is, I don’t have to predict who it is. I will own them.

The Self-Cleansing Process

And that’s a process that I refer to as “self cleansing.” I’m very proud of that term that I coined. So a great example of that is Sears. When I was a kid, Sears, a company you may not even be aware of, but Sears was the Walmart and Amazon of its time combined.

But Sears at the turn of the last century, the turn of the 1800s, looked around and said, you know, we have these brick and mortar stores, but there are all these people living out in rural areas who are never going to get to our brick and mortar stores.

We could send them catalogs, just begin to sound familiar. And then they could send us letters and money, ordering things from our catalog that we could then ship to them. So they became, you know, Walmart with the brick and mortar stores, and then Amazon of its time absolutely dominated for 100 years.

If you had said to somebody when I was first investing in the 1970s that Sears, Sears built the biggest building on the planet back in the 70s, what was then known as the Sears Tower in Chicago, if you had said Sears, its days are numbered, you would have been laughed at.

But its days were numbered because leaner, more aggressive competitors came along and ate its lunch. Nobody could have predicted that, certainly not me. But I didn’t have to if I owned the index. Because then when Walmart came along and then later Amazon and Sears faded away, I own those as well. That’s that self cleansing process.

STEVEN BARTLETT: And just for anyone that really doesn’t understand this at all, you’re not actually having to do anything because that index fund is just automatically making the decisions.

JL COLLINS: Exactly. I don’t have to do anything. I just have to own it and I can own it forever. So if I went and I bought Sears stock as an example back in the day, well, whenever you own an individual stock, you’re going to be thinking about, okay, how long am I going to own this?

And what is going to trigger my sale of this particular asset? And what, I mean, what has to happen to it that would make me not want to own it anymore? And then if I want to get rid of it and I want something in the same space, what do I buy?

Do I buy this new upstart Walmart, you know, do I buy this Amazon that back in the 90s is run by this wacko guy, Jeff Bezos, who kept saying, no, profits don’t matter. Profits don’t matter.

STEVEN BARTLETT: What?

JL COLLINS: Who invests in a CEO that says profits don’t matter? I mean, that’s nuts. But those are the kinds of things you have to be thinking about if you own individual stocks.

I don’t have to think about any of that owning the index because if Jeff Bezos turns out that his wackiness is brilliance, which it turns out it was, then he’s going to rise to the top, which it turns out Amazon did. And I benefited from that if it turns out it was just wackiness, it would have just faded away as a lot of companies have.

But that wouldn’t have mattered because whatever succeeds I will own and benefit from.

The Tech-Heavy NASDAQ Question

STEVEN BARTLETT: I was asking the research team beforehand, in the last 10 years, which index fund has performed the very, very best and it said that the NASDAQ 100, which is very tech heavy.

JL COLLINS: Right.

STEVEN BARTLETT: Has performed at almost 20% a year for the last 10 years. And when I think about what’s going on in the world at the moment and the advent of this new technology called AI which is driving everything it seems, and our lives are going to become way more technological with robots and automation and full self driving, it appears to me like if there was ever a great time to be investing in an index fund, one should aim at the very tech heavy index funds like the NASDAQ 100. Is that logical thinking or?

JL COLLINS: It’s logical thinking. Yes. So first of all, it’s logical thinking and actually had you done that same analysis 10 years ago, you would have done better than VTSAX. Right. Because technology has absolutely dominated for the last 10 years.

It is a reasonable speculation that that will continue into the future. So why don’t you for some period of time? Well, because the truth is that technology has not always dominated.

STEVEN BARTLETT: We’re not going to go backwards though, are we?

The Beer and Foam Analogy: Understanding Stock Market Value

JL COLLINS: Well, no, but the point is that it changes. So just like in my Sears example, Sears would have been at the top of the index for a long time and then it drifted away and got replaced. So that’s an individual stock. Sectors of stocks have also done that over time. Right.

So right now the dominant sector is tech. Wasn’t always the case, might not always be the case in the future, I don’t know because I can’t see the future. I understand people who would say that clearly that’s the best bet to go with tech. And your crystal ball is clearer than mine and you might very well be right.

But I don’t have a crystal ball and I don’t have to worry about that owning the total stock market because if you’re right, I will still benefit very nicely, thank you very much. If you’re wrong, whatever replaces it, I will own.

STEVEN BARTLETT: So you have an analogy you came up with that involves beer and a glass, right?

JL COLLINS: Probably came up with a drinking beer, but go ahead.

STEVEN BARTLETT: Well, show me, show me the analogy.

JL COLLINS: So thanks for that. Whoa.

STEVEN BARTLETT: Oh, here we go.

JL COLLINS: I was going to say thanks for not shaking up the can. So beer. Right. So I’m pouring it right down the middle so we get a nice thick head that’s even a little thicker than I hoped for. Okay?

So imagine for a second, right now we have a glass and we can see exactly how much foam there is and how much actual beer there is. Right? But imagine this was that I poured it into this vessel instead, where we couldn’t see that. The analogy is the stock market.

So when most people think of the stock market and when most people turn on CNBC, they turn on, you know, they look at the investment news and what have you, it’s all this churning and trading. You know, what stocks are hot now, what stocks are rising, what stocks are falling, what’s, you know, it’s all this trading.

That’s not the simple path to wealth. That’s the foam. Right? So the value in a stock, whatever the stock is, what makes up the price of that stock, is a combination of two things. It is the beer and it is the foam. And the problem is, unlike that glass, it’s in a vessel like this. So it’s hard to see exactly how much beer there is as opposed to how much foam there is.

STEVEN BARTLETT: And the beer is the value, the foam is the speculation.

JL COLLINS: Exactly. The beer is the fundamental operating value of the company. Right. The sales and the expenses and the money that’s left over that you call profits, right?

STEVEN BARTLETT: Yeah.

JL COLLINS: So that’s the beer. The foam is what the market determines that’s worth at any given moment based on emotion and hype and speculation and fear and greed.

STEVEN BARTLETT: And so up here is the total value of the stock, right?

JL COLLINS: Exactly. The total value of the stock. But this is all foam that can come and go very quickly.

STEVEN BARTLETT: Right?

JL COLLINS: So think about Tesla, for example, right? Tesla has a lot of foam because a lot of people are speculating about the great things Tesla’s going to do in the future. Robotic cars, humanoid robots, you know, all these kinds of things which very may well come to pass. I mean, Elon Musk is a stunningly brilliant guy, so who knows?

But that’s the speculation, that’s the foam. The underlying beer of Tesla, the actual operating company, does not justify the price of the stock. I mean, the P/E ratio of Tesla, you can look it up, is some huge number, right? So there’s a lot of speculation, a lot of foam in Tesla.

Now if things go to plan, then that foam will become, as in our example, you notice the foam is disappeared, fading. We’re getting more and more beer. If things go to plan for Tesla, that’s what will happen. The foam will eventually settle out into more and more beer and Tesla will justify that high price and maybe then some.

Warren Buffett’s Investment Philosophy

STEVEN BARTLETT: And I guess Warren Buffett’s greatness, if I’ve interpreted his writing correctly and why he was often considered as the greatest investor of all time, was he was able to pay for stocks where it was mainly beer and he paid at the price of the beer, not for the foam.

JL COLLINS: Or he looked for times where the sentiment was so negative that he was actually paying a little less than the price of the beer. Benjamin Graham, who wrote “The Intelligent Investor,” who was a mentor to Warren Buffett, basically said what you should do is look for value companies and try to determine where the beer is and then try to see if you can get a buying opportunity. Watch it where you can buy it for less than the actual value of the operation. That’s ideal.

And in those days when there wasn’t so much information freely available, that was probably a little easier to do. What Warren Buffett has said since then, and that’s a great foundation if you’re going to pick individual stocks. But what Warren Buffett has said since then is he learned, and I think, don’t quote me on this, but I think it was Charlie Munger who actually made this point to him that it’s going to be very, very hard in this day and age, even when they started back in the 60s, to find companies where you can actually buy it for less than the actual beer value.

So don’t try to do that. Just try to find companies that you can pay a fair price for that have a lot of beer in the mix that are mostly beer. Because if you buy those companies, they are by definition very well run companies. Strong brands, big moats around them, which makes them hard to compete.

STEVEN BARTLETT: I guess to do this, you’re going to have to have a framework for valuing a company.

JL COLLINS: Exactly. And you’re going to have to have great discipline, which is, yeah, hard. And that’s what you know. As Warren Buffett said, “I was blessed with an ability to allocate capital effectively.” And that’s basically what he has done. He has capital and he has got the ability to look at different companies and say, of all the different companies I could allocate capital to, he’s pretty skilled at picking the ones that are the best bets.

STEVEN BARTLETT: One of the things that I really admired about Warren Buffett was his ability to do nothing, which is one of…

JL COLLINS: The key things, because that goes back to Charlie Munger’s thing. Don’t get in the way of your compounding. Right.

Market Panics and Buying Opportunities

STEVEN BARTLETT: And there has been recent times where I think we can all think of where, using your beer analogy, something happens in the world and the true value of a company is higher than the selling price. That is, if you go back to March 2020, during the market sell off, when the pandemic happened and everybody panicked.

Amazon, for example, the stock briefly dropped below roughly to about $1,500 per share, well below its intrinsic value, because people were panicking. And then it quickly rebounded again past $3,000 a share. So theoretically, if you had noticed that drop, you could have made a 100% return on your money.

JL COLLINS: And by the extension, the whole market did that.

STEVEN BARTLETT: The whole market dropped down.

JL COLLINS: So you could have done that with your index fund. This is why if you panicked and sold, let’s say you owned Amazon or you owned VTSAX and you panicked and sold, well, you would have lost everything, and then it recovered. So it works both ways.

That’s why I said earlier in our conversation, you have to stay invested so that the dip doesn’t matter, and if anything, take advantage of the dip and buy more. So you own Amazon. You see it dip. You say, well, I still believe in the company. I still think it’s a good company and it’s got a good future. Well, maybe you buy some more in the dip and you do still better. But the important thing is you don’t sell when it’s down because there’s panic in the air.

The Gambling Trap of Trading

STEVEN BARTLETT: And I think this speaks to a broader sentiment throughout this conversation, which is to do what others don’t do. You know, and Warren Buffett’s famous for saying, “Be fearful when others are greedy, and greedy when others are fearful.” But generally, the sentiment on social media, especially for younger generations and especially for men, which is supported by the data, is that the way to make money is by trading crypto or by…

JL COLLINS: Right.

STEVEN BARTLETT: I mean, there’s so many people that sell. This is such a…

JL COLLINS: We need to address this. You know, it’s a platform.

STEVEN BARTLETT: It’s like gambling. It’s just gambling.

JL COLLINS: It’s a gambling platform. So that’s going. You know, people sometimes say to me, you know, “I never invest in the stock market. It’s just gambling.” I say, well, you’re half right. Our foam is all dissipated. But if there was still foam here, I would say, yes, if you’re doing it short term and you’re playing with the foam, absolutely is no different than going to Las Vegas. If you’re investing for the beer, it’s an entirely different story. And you’re investing for the long term.

STEVEN BARTLETT: And there’s lots of young people that are being tempted into buying a course that’s going to help them learn how to trade.

JL COLLINS: That’s great for the people selling the course.

STEVEN BARTLETT: There’s such an incredible obvious irony to the idea that I have some secret about trading that’s really going to make, you know that is capable of making one wealthy.

JL COLLINS: Right?

STEVEN BARTLETT: And I’m going to give it to…

JL COLLINS: You or even sell it to you.

STEVEN BARTLETT: Why would I need to if it worked?

JL COLLINS: Right?

STEVEN BARTLETT: Like this is such an obvious question to me. Like why would I need to sell it if it worked?

JL COLLINS: It is the obvious question. I mean, you know, and I feel sorry.

STEVEN BARTLETT: I have great empathy because the people that buy these things are people that are desperate to get out of their financial situation and they’ve run out of options. And so it’s very compelling to hear that there’s some secret that you can predict the stock market. It’s very compelling.

JL COLLINS: You know, in another interview I said one time we were talking about the same line of conversation we’re having and I said, you know, “I blame my mother. I would be a lot richer if she hadn’t instilled a conscience in me.” You know, she’s cost me millions of dollars instilling this conscience. I could have courses, I could be. But no, I am saying that there is a path that will give you great results and it’s a pretty well proven path at this point.

The Value of Financial Advisors

STEVEN BARTLETT: Do I need a financial advisor? Because a lot of people listening now will be thinking, yeah, I will figure out my money situation when I have enough money to pay a financial advisor.

JL COLLINS: Yeah, I think my attitude is by the time you know enough to choose a good financial advisor, which is no easy task, you probably know enough to do it on your own, at least on the investing part. Now there are other life kinds of decisions where maybe advisors would be more useful. But again, you have to be careful and it takes you need to really educate yourself as to how advisors get paid.

For instance, my attitudes, by the way, are colored by the fact that I hear so frequently from my followers about bad experiences with financial advisors. So I have a negative opinion. To be fair, I know there are good ones out there and all due respect to those good ones, but let’s suppose you have a financial advisor who gets paid based on the assets under management. Right.

STEVEN BARTLETT: The amount that you’ve given them.

JL COLLINS: Exactly right. So maybe it’s 1%. So you give them a million dollars and they get 1% a year to manage that money for you. Let’s suppose you go to that advisor and you say, you know, Steven, I’ve been thinking about paying off my mortgage. I’ve got a half a million dollar mortgage on this house. It’s 6%, let’s say it’s 5%. So in that middle range, it’s 5%. I’m thinking about paying off. What do you think?

STEVEN BARTLETT: Okay.

JL COLLINS: Well, now Steven has a bit of a lever because he can certainly give you the most accurate financial advice he is capable of giving you in answering that question. But if that leads him to say, yes, pay off the mortgage, he has just reduced his income by half. Because when you pay off that mortgage, half a million dollars is going to go out from his management and paying off the mortgage company.

So you have just asked Steven to give you advice potentially that is bad for Steven. Now, if Steven’s an honorable, capable, honest guy, then maybe Steven does that. But let’s suppose Steven has two kids in college. Let’s suppose Steven just bought a boat. Let’s suppose Steven is going through a divorce. Let’s think about that. And maybe Steven, as honest and capable and decent as he ordinarily is, has financial pressures that might play a role. Right. There is a conflict of interest frequently. So you have to understand how your advisor is being paid.

JL Collins’ Portfolio Allocation

STEVEN BARTLETT: How does your portfolio look? Where have you allocated your money in terms of percentages? How much money do you have in real estate versus cash versus index funds?

JL COLLINS: Well, I don’t even think about the real estate. We have this cabin in Wisconsin on the lake and then we have a condo in Florida. They’re both very modest, so pretty small part of our net worth. I like to buy things from a position of power.

My stocks, I’m probably about 80% in VTSAX Total Stock Market Index Fund and probably 15% in bonds, a Total Bond Market Index Fund and then the other 5% in money market fund. I keep some money in the checking account to pay the bills.

And to break it down a little further for you, my wife and I both have IRAs. We have a regular IRA and a Roth IRA. So there are four IRAs. All four of them hold VTSAX. We have taxable accounts and part of that is VTSAX. Part of it is the bonds.

STEVEN BARTLETT: What is a bond?

JL COLLINS: A bond is money that you have lent to a company or to the government. So when you buy a bond, you are essentially lending money to a company or a government entity. So they pay you interest, so you will. They companies and the government sell bonds of various maturities so they can be very short.

Like a money market fund is basically very short term bonds, you know, like 30 days or less. Right. Which makes it the equivalent of cash. But you could buy a certificate of deposit as a kind of a bond. So you could buy one of those for three months or six months or a year, five years, 10 years by U.S. treasuries going out 30 years.

STEVEN BARTLETT: Why would I do that instead of buying the index fund?

JL COLLINS: So the index fund is stocks. It’s very stocks, as we talked about, big growth engine, great long term, very volatile. So if you want something to smooth the ride, bonds are not very good for long term growth, but they are not nearly as volatile at least.

STEVEN BARTLETT: So they’re safer short term?

JL COLLINS: Yes, because they’re less volatile long term they tend to lose value to inflation. Stocks on the other hand, are riskier short term because of the volatility. But long term they outpace inflation and so they are safer long term. So it depends on your time horizon is which is safer.

But traditionally people think of bonds as being safer and really the way you should hear that is less volatile and stocks being riskier, you should hear that as more volatile.

STEVEN BARTLETT: So is it broadly true to say that if we exclude your real estate, 70% of your assets are in stocks, 20% in bonds and 5% in cash?

JL COLLINS: Probably more. 80, 15, 5.

STEVEN BARTLETT: 80% stocks, 15 bonds. Okay.

JL COLLINS: It’s interesting because which would be considered very, very aggressive. And I wouldn’t necessarily recommend that for most people my age.

AI’s Financial Wisdom

STEVEN BARTLETT: I thought it would be curious because we now have this new alien amongst us called AI. I thought it’d be curious if I went on ChatGPT and I asked ChatGPT the question. I’m a normal person who earns $50,000 a year, I want to be financially free in the future. Give me a one sentence answer based on all of the wisdom in the world taken from every expert in investing ever.

JL COLLINS: Why I know what the right answer is. I don’t know what the answer.

STEVEN BARTLETT: What do you think it’s going to say?

JL COLLINS: Read the Simple Path of Wealth. I don’t think that’s what it’s going to say, but that’s the right answer.

STEVEN BARTLETT: And the Simple Path of Wealth talks about three principles, right? What are those three? I’m going to check it against what it says.

JL COLLINS: Avoid debt, live on less than you earn, invest a surplus.

STEVEN BARTLETT: It said, “Focus on saving and consistently invest in low cost broad based index funds like the S&P 500 while living below your means and allowing compounding to work over time.” I then asked another question. How do I earn more?

JL COLLINS: I should sue them for mining my book.

STEVEN BARTLETT: Yeah, they probably did. I said, how do I earn more? What do you think? You know, if you thought, if your daughter came to you and said earn.

JL COLLINS: More in a job or I just.

STEVEN BARTLETT: Asked a very broad question, which is I now and now how do I earn more? Was my question.

JL COLLINS: I would say develop, develop your skills.

STEVEN BARTLETT: Okay. It said to earn more, focus on developing high demand skills.

JL COLLINS: There you go.

Developing High Demand Skills

STEVEN BARTLETT: Seek opportunities for career advancement, explore side hustles or invest in assets that generate passive income like real estate or dividends. But I really think that, you know, I really think there’s a really important part there about developing high demand skills.

JL COLLINS: What are those going to be in the future? Yeah, with AI, because programming, for instance, used to be a very high demand skill and people said learn how to program.

STEVEN BARTLETT: Yeah.

JL COLLINS: From what I understand in the age of AI, yeah, that’s not so much.

STEVEN BARTLETT: I even think about my own life. At 18 years old, I started learning about social media. I dropped out of university doing my business management degree after one lecture and I started learning about social media because I was building a business and social media and technology.

And although that first business failed, I was 19 years old in 2014 or something. Really understood this thing called social media which led me to spend a year as a consultant flying around the world to all these companies doing social media. One of those companies turned around and said, it’s been so great. Could you turn this into a company? I said, no, I’ve been through the founder PTSD of starting a startup. I don’t want to do it. Three months later I said yes, turned into a company called Social Chain and that changed my entire life.

JL COLLINS: That worked out well.

STEVEN BARTLETT: High demand skill I had, even though I’d failed, I had this high demand skill that was honestly at the time paying me £70,000 a month.

JL COLLINS: You probably had it because you went through the process of failing.

STEVEN BARTLETT: Yes.

The Value of Failure

JL COLLINS: Failure is, you know, it used to be in some cultures that if you failed once, that was it. You were a pariah. Nobody would even look at you anymore. Failure in our culture is just a stepping stone. I’ve heard venture capitalists say they won’t even look at an entrepreneur to fund if they haven’t failed at least once.

STEVEN BARTLETT: The advice I’d now give to my kids based on that is I would ask if my kids came to me and said, dad, what should I go learn? I would say, go and work for a startup. I said startup, because you’re going to be very close to the CEO and founder because there’s going to be less desks so you’re going to be closer to the proximity. That is failing at the cutting edge.

So if it’s AI, I’d say go work for an AI startup. I probably not going to work out. You’re probably going to be the company be bust in a couple of months time. But you’re going to be so close to the failure.

JL COLLINS: You will learn so much. Yes, I wish somebody had given me that advice.

STEVEN BARTLETT: And that’s like in a way, I guess, roundabout way, what I did is I started a company that failed at the very forefront of a wave coming into shore, which meant that as I hit, you know, as the wave crashed down and I was left there on my surfboard and I had this high demand set of skills that people were like begging me for, which set myself up and frankly, the Diary of a CEO would not be successful had I not spent the previous 10 years understanding how social media content creation growth worked.

Is there a favorite story in this book of yours?

The Power of Humble Beginnings

JL COLLINS: Well, there’s so many great ones. So I already alluded to my favorite one, which is my friend Tom. You know, because he has… I mean, Tom was a guy who got to the age of 62, he’d been through multiple divorces, he lost his house to foreclosure, he lost his job, he was broke, he went bankrupt. And yet his life has turned out pretty well. He’s an extraordinary, happy guy. That’s my favorite story.

But one of the reasons I like this book so much and one of the reasons, candidly I did it is if you read through it, you will find there are some stories from people who were tech bros, right, who made big incomes and they read The Simple Path to Wealth and applied it and it worked very well for them. But there are many, many more stories of people who have accomplished this from much more humble beginnings.

STEVEN BARTLETT: Give me an example.

JL COLLINS: I have a very good friend of mine, high school buddy. I don’t think he’s ever made more than $40,000 a year. He is financially independent because he followed the basic principles that I talk about in that book.

I have a different friend and he was in the financial business. He was living in Chicago and over lunch he told me that his Christmas bonus had come in at $800,000. That’s back in the mid-90s when that was real money, right? And he was already making, I don’t know, a million dollars a year, whatever it was, big income and he was broke.

And you see most people listening to this are going to say, what are you talking about? This guy got a bonus rate. People paid me $800,000 per year. I’d be done forever, right? And that’d be my nut. I’m good. How can he be broke?

Well, when you listen to him talk about the house, the cars, the schools, and you start doing the math, you realize that, no, his income is not enough. He’s barely making it.

So here’s a guy with a big income who is, unless he changes his ways, is never going to be financially independent. Here’s my guy with a tiny income, comparatively, who got there.

I’ve come to believe that a large income actually can be an impediment to accomplishing it. And my reasoning for this is that I think people who have a large income are much more likely to be drawn into the competing with the Joneses scenario because they associate with other people who have large incomes and they’re all driving a certain car, living in a certain neighborhood, sending their kids to certain schools.

And that probably becomes very hard to disengage with and making it perhaps even less likely that they are going to decide to spend a large portion of their income on buying their freedom. Whereas the people who make less money probably don’t have those same social pressures and are more readily able to do it.

So starting from humble beginnings is no obstacle. And that was the point of doing Pathfinders.

STEVEN BARTLETT: Interesting. It does track that, I think the goalposts continue to move in different ways. And, yeah, I guess you go from competing to the Joneses to competing with the size of someone else’s yacht, which is all slippery slopes to bad places or your own.

JL COLLINS: Or your own demons, as we talked about earlier. Right. Yeah.

The Financial Devastation of Divorce

STEVEN BARTLETT: You mentioned a word in there as well. You mentioned, I think you were talking about your friend Tom. Tom had a divorce.

JL COLLINS: Multiple divorces. Yeah, which is bad for your wealth.

STEVEN BARTLETT: Yeah, I didn’t realize this because I’ve never been through one before. I spoke to James Sexton on the show, who’s a divorce lawyer, who kind of opened my eyes to it. But actually, I had a private conversation with a friend here in New York City, I’d say, a couple of months ago, who’s going through a divorce.

And he sat me down and he talked me through the specific consequences of divorce that he’s going through. He said to me, he’s a very successful person. I reckon he’s probably worth 500 million.

JL COLLINS: Right.

STEVEN BARTLETT: He said the divorce proceedings have now dragged on for five or six years, so I’m having to go and see lawyers all the time. And he said to me as well that he is paying for her lawyer, which I was… I didn’t really understand, but he was like, no, I have to also cover her lawyer costs because, you know, I’m the breadwinner, so she doesn’t have money, so I’m covering her lawyer costs, which is what I have to do.

And he said, the law firm have gone from being a very, very small practice in those six years. Now they have a massive building. And he goes, I know, it’s my money. He literally is like, I have paid for her lawyer, and now they’re doing really, really well and they’re milking this case. They’re drawing it out.

JL COLLINS: Yeah. They have no incentive to this ending.

STEVEN BARTLETT: Yeah. So he’s like, I’ve spent tens of millions on her lawyer who is basically dragging me, and now they’ve got this massive building.

What else did he say to me? He said, because some of my assets are subjective in value, like my company, her lawyer is inflating the price of my assets because she’s going to get half whatever they can convince a judge my assets are worth. So, you know, for example, his business might be worth 100 million, but the lawyer is making the case to the judge that it’s worth 500 million, so that she gets 250 million. He also said to me, which really isn’t there, which really he doesn’t have.

JL COLLINS: Right.

STEVEN BARTLETT: And then he was saying to me, he goes, you know, I bought this particular stock.

JL COLLINS: So he is… I’m sorry to interrupt him, but now he’s forced to fight it.

STEVEN BARTLETT: He’s fighting. It’s not like he can just say…

JL COLLINS: Okay, she can have half.

STEVEN BARTLETT: Yeah.

JL COLLINS: Because this is a judgment that is going to create an obligation on his part for assets that don’t actually exist.

STEVEN BARTLETT: So it’s more than half. She could end up taking 60, 70. And the other thing he said to me, which is quite sad, he was like, you know, I was one of the… He was one of the early investors in a big company that we all know. And he said to me, I bought that stock 15, 20 years ago. It’s actually quite emotional to him that he was so early in, back in that company, and now he’s forced to sell that.

So he has to liquidate investments he made 20 years ago because, again, she’s entitled to half.

JL COLLINS: And that’ll be a huge tax hit.

STEVEN BARTLETT: A huge tax hit.

JL COLLINS: Right.

STEVEN BARTLETT: And I think some people don’t realize that wealthy people can get a loan against that stock without ever having to sell it.

JL COLLINS: Right.

STEVEN BARTLETT: So he’s probably… If he’s not, he’s probably got a big loan against that stock, probably a 50% loan. So just for anyone that doesn’t understand this, because I only understood this in the last couple of years where I started doing similar things, is if the stock is worth 100 million, he can get 50 million tax free from a bank just by keeping that stock there and really never have to pay it back because it’s such a great stock.

And it was also just looking in his face and just seeing the stress and the toll of having to go to court all the time and fight this thing for six or seven years that I thought, wow. We give people financial advice all the time about the best stocks to pick or invest in index funds. We don’t talk enough about how divorce can just destroy your life.

JL COLLINS: You know, you have to be so careful in choosing your spouse. I’ve had pushback on that. And people say, well, that you’re choosing your spouse is not a financial decision. It’s, you know, it’s emotional, it’s romantic, it’s… Well, yeah, it’s all those things, but you better take finance into account for all the reasons that we’re discussing.

This also, by the way, loops us back to an early part of our conversation. Where does money buy happiness? Does you know, being richer, is that always necessarily better? Well, this guy is more of a target because of his wealth than he would be if he were. So is his money really making him happier at this point in his life? Probably not so much, you know.

STEVEN BARTLETT: And he’s going to be fine either way. Like, sure, you know, which is a point worth saying of nuance. But also, and the other point of nuance worth saying is he’s going to…

JL COLLINS: Be fine financially, but emotionally it’s… He’s still going to go. And she’s probably going through it too, on the side. Yeah.

STEVEN BARTLETT: And the other point of nuance here is that she did raise the four or five, the three or four kids while he was off building the business for, you know, 20 odd years. So one could argue that he wouldn’t have that wealth without her being at home to look after the kids. And she’d made huge sacrifices to her own career. So, you know, it’s balanced.

But I just think with James Sexton said to me, even if you don’t get a prenup, there’s still a prenup. You either use the government’s prenup, which is… Or you create your own, or you create your own. Either way, there’s a prenup.

JL COLLINS: Absolutely.

STEVEN BARTLETT: Do you want to let some judge decide or do you want to be intentional before you get married with your partner about how things will be split? And even when I think about my partner at the moment, and we’re probably going to get married soon.

JL COLLINS: Congratulations.

STEVEN BARTLETT: Thank you. I haven’t proposed just yet, but I’m working on it. Don’t tell her that.

JL COLLINS: We just let the secret out.

STEVEN BARTLETT: She doesn’t watch this anyway. Someone’s going to do it, man.

JL COLLINS: But I’m on this time. So this is the one episode you watch.

STEVEN BARTLETT: True.

Choosing Your Life Partner Wisely

JL COLLINS: Well, I’m very fortunate as this spring I will have been married 44 years. And I tell people I…

STEVEN BARTLETT: Congrats.

JL COLLINS: I married my wife out of the gate. Why wait?

STEVEN BARTLETT: Do you have a framework for choosing the person or for sustaining for 44 years? Because I’m what, six, seven years in with my girlfriend. But you’ve got 44 years in.

JL COLLINS: Funny story about that is people used to ask me, did you and Jane sit down and discuss money before, make sure you were on the same page financially before you got married? And I always used to say, you know, it’s a great idea, you should do that. But no, we never did that. I just got lucky. You know, we never talked about it, but as it happens, we got married and we were very, very compatible financially, which we are. But just got lucky.

Well, I told that story in front of her one time and she leaned back in her chair and she said, “What are you talking about? On our first date, you said to me, you need to be saving 50% of your income.” You said, “What do you mean? We never talked about money?” I guess that’s such a natural part of my persona. I didn’t even remember doing it.

On Regret and Life’s Unknowns

STEVEN BARTLETT: Interesting. My last question for you is about regret. You said, you’re 75.

JL COLLINS: I am.

STEVEN BARTLETT: What are your biggest regrets?

JL COLLINS: So I think regrets are tricky. And I’ll answer your question directly. It’s a couple of things, or at least one thing that occurs to me that might be surprising. But the reason they’re tricky is because there is an assumption like you regret doing A, and you think, if only I’d done B, things would be better, but you don’t know that that’s true.

But you might say, boy, I regret starting that company that failed because it was a failure. Well, yeah, but it led to something much bigger. You learned so much. Now, maybe if you’d said, instead of starting that company that failed, maybe I took this high paying job and I worked my way up through the corporate organization and you’d be sitting there, you know, you’d be sitting at some high executive level in this corporate corporation and looking back and saying, well, am I glad I didn’t do that startup that failed?

STEVEN BARTLETT: Right.

The Weight of Regret

JL COLLINS: And yet you’re so much further ahead now than if you. So who knows, who knows what choice you made that appears to be the wrong choice as to whether it really was. Maybe it was. Exactly. Maybe things would have turned out better, maybe they wouldn’t.

So I’m very hesitant to look back on. There are many things I can look back on and say, gee, I do wonder, what if I’d gone down the right path instead of the left path? What would that have looked like? But there’s no guarantees it would look better. And my life has been pretty damn good. So in that sense, I have no regrets.

Two regrets I do have, very personal regrets. I’ve never shared these publicly. When I was a kid, my father was a very handy guy. He loved building things, working on the house, that kind of stuff. I was not that kind of kid.

And I don’t know, I was 8 or 10 years old at one point and for my birthday or Christmas, I don’t remember, he bought me a jigsaw, which is a, for people who don’t know, it’s an electric saw. It’s got a little blade, it goes up and allows you to cut wood in very fine kinds of patterns. Last thing in the world this kid wanted and I let my dad know and he was crushed because for him it was the best gift he could possibly think of to give to an 8 or 10 year old or whatever it was.

And so one of the regrets, and I give myself some grace because I was very young and reasonably you could expect that I didn’t have the maturity to deal with it the way I would have. But I do regret because I could see the pain in his face when I kind of rejected that gift. Right.

And maybe that taught me a good lesson in being more empathetic going forward. So again, do I really regret it? Well, I regret that I hurt my father, but I learned something pretty valuable.

STEVEN BARTLETT: And you’ve remembered that for 70 years.

JL COLLINS: I remember that for 70 years, yeah. Yeah.

STEVEN BARTLETT: I’ve got similar stories of things I react as a kid.

JL COLLINS: I think most people do, you know.

STEVEN BARTLETT: Yeah. Sucks.

A Father’s Final Moment

JL COLLINS: And then my second one, and this is even bigger, I was 24 when my dad died and he died of emphysema and slow lingering death. He died in the hospital and the night before he died. The day before he died, I was visiting him, and he was sitting on the edge of the bed, and he said to me, “I’m going to die now. You know, I’m going to die tonight.”

Turns out, of course, he was right. He did. That was the night he died. And instead of recognizing that this was a moment where he wanted to talk to his son about this, this probably the most momentous event that any of us will ever face, right?

Instead of recognizing that, I went to the typical trope of, “Oh, dad, don’t talk like that. You’re not going to die. You got a long way to go. You’re going to be fine.” I went to all that instead of just recognizing whether he was right or wrong, that he was facing a momentous thing, and he didn’t want to hear, “Don’t think about that. Think more positively.”

He wanted to share with his son what he was facing. And I regret that I wasn’t there for him in that moment, but I regret that I didn’t get to experience that with him in that moment. So that’s my biggest.

STEVEN BARTLETT: I can still see it still in your face.

JL COLLINS: That was 50 years ago.

STEVEN BARTLETT: Is there a reason why you think in that moment, you didn’t want to go in that direction with him?

JL COLLINS: Was it a matter of what I wanted? Because it’s not like I considered, I can either blow it off, which is what I did, or embrace it and go there with him. I didn’t even think that way. It’s not like I made the wrong choice. I wasn’t mature enough to recognize there was a choice. I wasn’t mature enough to recognize the real dynamic of what was happening.

STEVEN BARTLETT: And for that, you deserve grace.

JL COLLINS: Thank you. And I agree with that. But I still regret it, because how much better for both of us would it have been if I had recognized it?

Curiosity About Death

STEVEN BARTLETT: JL, we have a closing tradition on this podcast where the last guest leaves a question for the next. What is something that you think is true that you haven’t yet been able to validate?

JL COLLINS: I think at this point in my life, I feel pretty comfortable about what I think is true. So I’m not sure this answers the question. But a good example is I am pretty sure that there is no afterlife. Right? I have a high degree of confidence in that.

But, of course, as the song once said, “We’ll never know by living and only our die and will tell.” And I am very curious about death. I am very curious as to what is on the other side if anything.

So in a perverse way, I guess I am looking forward to my death. I don’t want to get there too soon. I mean, as long as I am mentally and physically capable, I’m happy to continue living, thank you very much. But I do have a great curiosity about death, and I’m almost 100% sure that when I’m dead, that’s just it, it’s over.

But I’m curious, and it’ll be interesting if I die and it’s like, “Whoops,” you know, like, “Oh, there is a guy with a white beard and, okay, I’ll just show myself out. Thank you very much.”

What Actually Matters

STEVEN BARTLETT: There was one last question I wanted to ask you, which is kind of just about the subject of happiness again. At 75 years old, you have a retrospective clarity that I don’t yet have. And what actually mattered? What actually matters?

JL COLLINS: Nothing. Nothing really matters, ultimately.

STEVEN BARTLETT: Nothing.

JL COLLINS: Yeah, I think that’s kind of like asking, “What’s the meaning of life?” Right? And I don’t think there is a meaning to life. When you look at the scale of the universe, the scale of the cosmos, the concept that we as individuals bear some meaning seems to me to be silly.

Human beings have been around for, I don’t know, 2,300,000 years, depending on when you define Homo sapiens. I mean, that’s an infinitesimally small smudge of time in that has happened already, and that will happen in the future. Even if humans last for another few million years, it will be an infinitely tiny bit of time against this huge cosmic universe and our individuality within that is infinitesimally small.

And I think there’s some great meaning behind that. Seems to be, to be the height of arrogance. So I think that if you go through life and you treat people pretty well and you have a pretty good run of it, I think you’ve done well. But I don’t think there’s something profound in that.

STEVEN BARTLETT: So what is the point then? Is there a point? Is that the real question?

JL COLLINS: There is no point. I mean, the point is we happen to be here, and it can be a good, fun ride. It can be a very difficult ride, depending on what you make of it and in some cases, depending on your circumstances.

There have certainly been people in history that have been born into circumstances that, you know, made it a miserable existence with no options out of it. I mean, what’s the meaning of that? You know, you and I and the vast majority of people listening to us, probably, I venture to say 100% of them have a lot more autonomy over how we can make our life.

And will it have great meaning? No, ultimately not. But it’s the only life you have and you might as well make the best of it.

God on the Train

STEVEN BARTLETT: I actually listened to something last night by a guy called Lucas Jones, who is an actor. He has some great books. He’s also a poet, as far as I’m aware. I’ll link his books below. But he wrote this poem which I thought was quite related to that, that I’m just going to play for you, because I think it kind of captures the essence as well of what you’re saying. He starts by saying, “I saw God on the train.”

JL COLLINS: Saw God on the train, but pretended I didn’t.

STEVEN BARTLETT: So I sat far away from the seat. He was sitting there. And then he got up, I think probably to piss, and he noticed me there and said, “Oh, eh, what’s this? What are you saying?”

JL COLLINS: You hiding from me?

STEVEN BARTLETT: I said, “Now just a comfier seat.” And he looked at me like I…

JL COLLINS: Was a kid covered in chocolate surrounded…

STEVEN BARTLETT: By wrappers, saying, “Don’t know what happened.” And he goes, “Come on, mate, I’ve…”

JL COLLINS: Got a few minutes.

STEVEN BARTLETT: “Tell me what’s wrong, but don’t f* around with it.” And it shocked me then that it fit in one sentence. I said, “Just think, heaven’s a stupid incentive, like what a shit life for a beautiful death. And those who are evil can suddenly repent like a killer or nonce can…”

JL COLLINS: Live like a monster. Then right at the end say, “I’m sorry, dear God, sir,” and end up…

STEVEN BARTLETT: In heaven, right there with my nana. She’s doing some knitting, he’s waving a hammer. It’s like, “Jesus, God, what a horrible deal.” And he goes, “Yes, f*, don’t know how you feel.” I’m like, “Mate, you’re the one spinning the wheel.” And he goes, “Listen, I’ll tell you a secret. All that stuff, mate, I didn’t speak it. Like the old joke says about liars and men. If God wrote the book, why are you holding the pen?”

JL COLLINS: Now the rules I wrote, I wrote on your heart.

STEVEN BARTLETT: “Truth I spoke, you’ve known from the start. Be kind, don’t harm.”

JL COLLINS: Isn’t that hard?

STEVEN BARTLETT: “Heaven is just life if you’re doing your part. You want white clouds and endless skies.”

JL COLLINS: Yeah?

STEVEN BARTLETT: “Look around. You don’t have to die. I know it probably brings you some pain to think of the dead as just dust in a grave, but humans can’t comprehend it. When I say life is the cloud and death is the rain.”

When I got to my stop and felt kind of mad, not sure he answered the questions I had. Then I looked up and saw the sun rising, said, “You’re looking for heaven but you’re the one hiding.”

Final Recommendations

STEVEN BARTLETT: JL, thank you. Thank you for writing these incredible books that I highly recommend. Anybody who is on their own journey to financial freedom and is looking for a free life, a financial independence or just independence from one’s own tormenting psychology should buy this book.

“The Simple Path to Wealth” has been an absolute smash hit for understandable reasons, once you read it. Sold many millions of copies from what I understand, more than a million copies at least. And I highly recommend everybody goes and starts with this book and then picks up “Pathfinders.”

I’m going to link both of these books below. And there is a third book, it’s slightly smaller, called “How I Lost Money in Real Estate Before It Was Fashionable, A Cautionary Tale.” I’m going to link all of them below. And if anybody else wants to find more of your work, is there anywhere else that they can get in contact with you, read your work that I should recommend?

JL COLLINS: So probably the easiest thing is the blog, which is JLCollinsNH.com and you’ll find a lot of my writing. I don’t write on the blog too much anymore, but the material that’s there is evergreen. It’s the source material for the books that you were kind enough to share. The last book, “How I Lost Money in Real Estate,” is if somebody wants to have a laugh at my expense, that’s the book they want to pick up.

STEVEN BARTLETT: Thank you for doing so much of what you do. I know what the comments are going to say already. They’re going to be people talking about how soothing your voice is. I happen to agree. Thank you so much.

JL COLLINS: My pleasure. Thank you for having me.

The Power of Connection Through Conversation

STEVEN BARTLETT: If there’s anything we need, it is connection, especially in the world we’re living in today. And that is exactly why we created these conversation cards.

Because on this show, when I sit here with my guests and have those deep, intimate conversations, this remarkable thing happens time and time again when we feel deeply connected to each other.

At the end of every episode, the guest I’m interviewing leaves a question for the next guest. And we’ve turned them into these conversation cards and we’ve added these twist cards to make your conversations even more interesting. And there are so many more twists along the way with the conversation cards.

This is the brand new edition and for the first time ever I’ve added to the pack this Gold card, which is an exclusive question from me. But I’m only putting the Gold cards in the first run of conversation cards, so get yours now before the limited edition gold cards are all gone. Head to the link in the description below.

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