Author Topic: JL Collins Simple Path to Wealth - How to stick to the first rule?  (Read 6056 times)

Spud

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Here's the full post which I'm sure many people here are familiar with: https://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-and-a-simple-path-to-wealth/

Here are the 9 basics:

1. Avoid fiscally irresponsible people.  Never marry one or otherwise give him access to your money.
2. Avoid money managers. It’s your money and no one will care for it better than you.
3. Avoid debt.
4. Save a portion of every dollar you get.
5. The greater the percent of your income you save and invest, the sooner you’ll have F-You money.  Try 50%.  With no debt, this perfectly doable.
6. Put this money in the Vanguard Total Stock Market Index Fund (VTSAX)   This is the fund you already own, so just keep adding to it.
7. Realize the market and the value of your shares will sometimes drop dramatically.  People all around you will panic.  They’ll be screaming Sell, Sell, Sell.  Ignore this.  Even better:  Buy more shares.
8. When you can live off the dividends VTSAX provides you are financially free.
9. The less you need, the more free you are.

I would argue that everything on this list is quite easy to do, with the ENORMOUS EXCEPTION of Rule #1.

How the hell is Jim planning on teaching his daughter to avoid fiscally irresponsible people?

It's not as if everyone wonders around wearing a huge sign with their net worth attached to it. Also, last time I checked, I was never attracted to someone based on their finances.
Also, you tend to only find out about someone's finances once you've spent and lot of time with them and perhaps live with them.

I've read so many threads on these forums lately about people having relationship problems because their partner is, as Jim says "fiscally irresponsible".

So how would you teach a child/teenager/young adult not to fall in love/lust with someone who is awesome on the surface but a financial trainwreck behind the scenes?

It's seems to me as if all the good advice in the world won't make any difference because quite often by the time financial circumstances are revealed people have developed feelings for each other and things get really messy.
« Last Edit: October 05, 2018, 11:48:56 AM by Spud »

Aelias

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #1 on: October 05, 2018, 11:59:17 AM »
The big problem with #1 is that people can't help who they fall in love with, but I'd really strongly encourage my kid to into any serious relationship with their eyes open and with clear boundaries. 

I think the best thing to do is make sure your child has some very serious and detailed talks about finances with their would-be spouse or partner before any serious commitments are made.  This would include reviewing all available documentation (loan balances, investment portfolio, credit card bills), and if there is no documentation, that's a huge red flag.

You can also model good teamwork with their other parent (whether you're still together or not) by having mature, productive conversations about money and showing that even when there's disagreement, you're still working together toward shared goals.

Miss Piggy

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #2 on: October 05, 2018, 12:00:46 PM »
1. Talk about money, just like you would talk about whether you want kids, how many, etc. If I want seven kids and the guy I'm dating wants none, well, then we have an issue.

2. Pay attention. Be observant. Look for signs of a financial trainwreck. And did I mention talk about it?

bridget

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #3 on: October 05, 2018, 12:03:32 PM »
You can't avoid literally meeting or being initially attracted to financially irresponsible people, but you certainly can determine whether someone is generally financially responsible before beginning a serious relationship with that person, and certainly before moving in with them or getting married. You find out the same way you discover if the person is compatible to you in all other ways - you observe their habits and lifestyle, and you have conversations about your values and whether they align.

There is a very small risk one might marry someone who says all of the right things and outwardly appears to be financially responsible, but then you find out years down the line they have a secret gambling habit and stole your identity. Just like there's a risk anyone's spouse will turn out to have a secret second family, or be a secret felon on the run, or something. But the vast majority of the time, you can find out the basics of who someone is before deciding to hitch your life to theirs. 

moof

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #4 on: October 05, 2018, 12:05:19 PM »
I was not taught about marriage very well, and lucked out in many ways with my wife.

Marriage is presented in movies and such as riding off into the sunset and being happily ever after.  Reality is very different, and that is where you should be sharing and teaching your kids about what to expect.  Your spouse is many things, including your business partner in Family Inc.  Budgeting and dealing with money issues are mundane, but also one of the major sources of divorce, so have discussions about these topics as they grow.

Sharing your own stories, being open about how money works in the family (in age appropriate ways) can go a long way towards teaching the value of money.  You can also share personal and family stories of failure to make points.  My father was a good foil for explaining what not to do on many fronts, including money.  I grew up seeing how he often had money for pot and junked classic cars, but rarely for child support.  I became much more mindful of my own priorities with money after juxtaposing myself with him and the father I want to be for my kid.

Kids should be sensitized to money issues, and be warned of the perils of debt.  Expect your kids to ignore 90% of this, and you should shut up once they have made their choice for a spouse as an adult.  At that point it is too late for you to do much beyond sabotaging your relationship with them.

DS

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #5 on: October 05, 2018, 12:11:50 PM »
I think the important part would be the access. As in make sure they are not able to access your funds, and be disciplined in saying no when it counts. Which is why it might be easier just to avoid them. But if you encounter the situation where you love such a person, then the access is the main idea I think is important.

Duke03

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #6 on: October 05, 2018, 12:14:42 PM »
When it comes to rule #1 always remember "family will screw you over before a complete stranger will because they think they can get away with it"

FireHiker

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #7 on: October 05, 2018, 12:25:05 PM »
Marriage is fine for me this time around, but the single most fiscally irresponsible person in my life is my mother...

FamilyGuy

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #8 on: October 05, 2018, 01:09:47 PM »
Here are the 9 basics:

1. Avoid fiscally irresponsible people.  Never marry one or otherwise give him access to your money.
2. Avoid money managers. It’s your money and no one will care for it better than you.
3. Avoid debt.
4. Save a portion of every dollar you get.
5. The greater the percent of your income you save and invest, the sooner you’ll have F-You money.  Try 50%.  With no debt, this perfectly doable.
6. Put this money in the Vanguard Total Stock Market Index Fund (VTSAX)   This is the fund you already own, so just keep adding to it.
7. Realize the market and the value of your shares will sometimes drop dramatically.  People all around you will panic.  They’ll be screaming Sell, Sell, Sell.  Ignore this.  Even better:  Buy more shares.
8. When you can live off the dividends VTSAX provides you are financially free.
9. The less you need, the more free you are.

Whatever, it's a great list. First time reading it :)

Dicey

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #9 on: October 05, 2018, 01:49:04 PM »
The big problem with #1 is that people can't help who they fall in love with, but [snip] you can totally control who you marry.
Just sayin'.

Retire-Canada

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #10 on: October 05, 2018, 01:49:46 PM »
How the hell is Jim planning on teaching his daughter to avoid fiscally irresponsible people?

Huh? Same way you'd figure out if someone was honest, trustworthy, kind, etc... No signs hanging around peoples' neck about those traits either. You have to spend some time and get to know them. I've been attracted to ladies who I could tell would be a lot of fun to "party with" and absolutely no fun to have as a life partner.

Even with my current GF of 9 years she has no access to my bank or investment accounts. We own nothing jointly more valuable than a toaster or down duvet. By now I know that she is financially responsible by normal peoples' standards although she'd fail at a few MMM-esque things. If there was a really important reason I'd give my GF access to my finances. Since there isn't we keep them separated.

Getting to know people takes time and it's a process.
« Last Edit: October 05, 2018, 02:18:13 PM by Retire-Canada »

Frankies Girl

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #11 on: October 05, 2018, 02:14:45 PM »
The idea that you don't discuss some broad strokes about the big stuff within the first few dates is asinine to me. Why on earth would you waste time "getting to know" someone for months and not discuss the stuff like religious beliefs/ideals, money management, kids/no kids, etc? It isn't that hard or awkward to share stuff after 3-4 dates. Hell, if you can jump into bed and screw a person right off the bat, the idea of it being too weird to TALK to them after a month or two is just... bizarre.

No one holds a gun to your head any more to force you to link up with someone you don't choose. Personally, I would find someone pretty unattractive as a mate/friend that was terrible with money. Just like we all have things we find attractive about a potential spouse enough to start dating - hair color, weight, personality, interests... if you don't include "basically smart about money or willing to learn how to be" in there, you're the one being foolish in choosing (note the root word "choose") a mate.

But then again, if you marry someone that doesn't share your basic values, then it highly unlikely to work out well in the long term anyway.
« Last Edit: October 05, 2018, 02:18:02 PM by Frankies Girl »

bridget

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #12 on: October 05, 2018, 02:37:35 PM »
The big problem with #1 is that people can't help who they fall in love with, but [snip] you can totally control who you marry.
Just sayin'.

And usually, people don't fall in love with people they only went on a few "getting to know you" dates with. Most of the time, it requires a longer time to get to that stage. If it's clear from the get-go that someone has totally incompatible money habits, you advise your child to stop dating them before they get to "fall in love" stage. Just like the example noted above - if on a first date someone says they never ever ever want kids, and you really really do, you don't go on another date and therefore probably won't fall in love.

None of this is foolproof, because parents can't control their adult child's decisions in any way, it's just good advice. You will never find a guaranteed way to ensure your child will never become romantically involved with a financially irresponsible person.

LibrarianFuzz

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #13 on: October 05, 2018, 03:11:47 PM »
And sometimes, of course, people just lie.

I really thought that me and my ex-husband were on the same page. No, I didn't demand to see his bank statements before we were married. We kept separate accounts and he seemed financially responsible. My only financial complaint prior to marriage would have been that I thought he spent a little too much money on fast food, rather than sensibly cooking more meals at home. And we'd dated/been engaged for 6 years, so I thought I knew him.

*cue sarcastic laugh*

It wasn't until the financial paperwork was revealed during the divorce - with the help of the lawyer, because he was hiding so much - that I understood that he had been receiving large cash infusions from his parents for years, that he had over $60,000 in debt, and he had taken out everything from multiple credit cards to internet loans. (I hadn't even known you could get an internet loan.)

Oh, and he also owed the IRS. A lot.

I'm still not sure what would have been the right thing for me to do. Demand to see a credit report before marriage?

« Last Edit: October 05, 2018, 03:13:42 PM by LibrarianFuzz »

seemsright

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #14 on: October 05, 2018, 04:04:44 PM »
you do research when you buy things. If you are on this forum you most likely research the hell out of anything you buy. Want and new thing...you know everything about it and why you are buying it. You have looked at used markets, you have done research on it from every way till sunday.

Marriage is no different. I would not think it would be unrealistic that before marriage that you have a weekend where you make it a huge date...complete with a cheap bottle of wine and some spaghetti where you pull credit reports, go over the last 5 years of bank accounts and put it all on the table. Knowing background of someone who you plan on spending the rest of your life with is not unrealistic.

Me...I married at 19 to my High School Sweetheart. We did not have anything, we did not know a damn thing. But we worked together when we both were taking out loans so that he knew how much I had and what not and I knew how much he had. We went to college and we both knew he would be the one that would make more than I so we tried to keep both of our loans within what we thought he could make and the loan payments for both of the loans. Nearly 20 years later we have one kid, I stay at home and about 3 years away from FI. We are not common we both know that. But working together with a common goal is vital. Not me doing one thing and him another. 

I am trying to figure out how the 3 of us can go on a trip next summer for my 40th Bday. We are working together to make that happen. I am cooking more than normal, he is selling random things that we do not need.    This weekends excitement is our kid wants to do a movie night tonight. It is about working on a bigger goal TOGETHER. Keep things simple and know all of the info.

moof

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #15 on: October 05, 2018, 05:01:56 PM »
Money issues should definitely be discussed before a ring gets trotted out.  It is an area where power and control issues can arise, and where mismatches in earnings can create massive friction.

With a month or two of our first data my now wife and I discussed money pretty seriously.  She had a few grand in credit card debt from a failed attempt to sell scrapbook stuff as a side gig.  Part of the discussion was that when we got married it would be "our debt", not hers any more (she initially insisted on wiping away the blight on her own).  It was jarring for her, as this bit of shame was affecting her new love.  We worked through money issues during our engagement such that we have NEVER had a fight over money in a dozen years of marriage.

We have always done his, hers, and ours.  We each get an allowance for clothes/hobbies/lunches/etc.  The rest is family money where we discuss and agree to all spending outside of the obvious regular bills.  When she became SAH with the kid for 6 years we tightened the belt a bit, but otherwise nothing changed.  Same allowance, just a different split of the new set of family responsibilities.  I did not feel entitled to more because I was the breadwinner or anything of the sort, nor did she have any major guilt issues about not working (I had worse guilt issues about missing out on many aspects of kid rearing though).  Now that she is working again, nothing major has changed except that we have a fresh 401k bucket to fill (yay!), and family responsibilities have gone through another minor reshuffling.

Bateaux

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #16 on: October 07, 2018, 01:00:34 PM »
I wish I hadn't followed his advice on VTBLX .  I put 10 percent of our stash in this fund and it is a dog.  Stick with VTSAX.

Telecaster

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #17 on: October 07, 2018, 01:48:22 PM »

1. Avoid fiscally irresponsible people.  Never marry one or otherwise give him access to your money.

I would argue that everything on this list is quite easy to do, with the ENORMOUS EXCEPTION of Rule #1.

How the hell is Jim planning on teaching his daughter to avoid fiscally irresponsible people?


If you are not financially responsible, you are not responsible period.  I don't necessarily mean MMM type frugality, but if you are going to combine your life with someone, they should be responsible enough to pay their bills on time, if they have debt they should be working on paying it off, they shouldn't be buying *too* much unnecessary consumer crap, they should be trying to save *some* money, etc.  Basically, have your stuff squared away.  If the money isn't squared away, then lots of other stuff isn't going to be squared away either.   

Disagreement over money is a major cause of divorce.  You need to be pretty much on the same page in that area, otherwise you are in for a rough road.   Another way to look at it: For a marriage to be successful, each partner needs to want the same basic life trajectory.   That's not just true when it comes to money, but also desire for kids, career choices, etc.   Pretty much the riskiest thing you will ever do in your life is say "I Do."   Don't take that risk with someone who doesn't have their stuff squared away.   

Retire-Canada

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #18 on: October 07, 2018, 04:40:11 PM »
Wow...rereading the OP #8 is the one that blows me away. Does JL really say that you are not FI until you hit a 1.8% WR? That's fairly crazy! For a $40K spend that would be ~$2.2M saved/invested or more than double MMM's typical advice.

Telecaster

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #19 on: October 07, 2018, 06:03:58 PM »
Wow...rereading the OP #8 is the one that blows me away. Does JL really say that you are not FI until you hit a 1.8% WR? That's fairly crazy! For a $40K spend that would be ~$2.2M saved/invested or more than double MMM's typical advice.

I'm not sure what he means by that.  He's a 4% rule guy.   

mountain mustache

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #20 on: October 07, 2018, 06:22:09 PM »
With my last boyfriend, I think we were discussing finances within a week of meeting. Of course, we talked about everything the week we met, because the minute we met it felt like we'd known each other forever. But, we were both very transparent with our jobs, our incomes, and what was in the bank account/any debts within less than a month. He made far more than me, but never cared or had a problem with my low income. I have no debt and I'm very responsible, and so is he, so we were both attracted to that in each other. Responsibility in money=probable responsibility with other big life things...IMO. I'm also the person that throws out "no kids for me" on the first date with someone. No use wasting someone's time if I can't fulfill expectations. BF and I eventually broke up for other, non money related reasons, but we had a really good thing going when it came to financial transparency.

MrsPete

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #21 on: October 07, 2018, 06:28:08 PM »
The big problem with #1 is that people can't help who they fall in love with
Eh, I don't agree.  For example, I went to college, and early in my college career I realized that I wanted to marry someone who also had a college degree ... so I never agreed to go out with anyone who wasn't either in college /a college graduate.  I had a few other non-negotiables.  Does that sound stuck up?  Maybe, but I wasn't going to marry "just anyone", so I never opened myself up to a relationship with "just anyone". 

Yeah, that sounds horribly stuck-up. 

I think the best thing to do is make sure your child has some very serious and detailed talks about finances with their would-be spouse or partner before any serious commitments are made.
Yes, I raised my children to be aware of money and to choose to live frugally ... and I talked to them about being SURE they choose spouses with similar values. 

I personally had to learn that lesson the hard way, and it took me most of freshman year of college.  My high school boyfriend was on a full-ride scholarship, he received an allowance every month BOTH from his parents AND from his scholarship, and his parents gave him an old-but-paid-for car -- while I was working and paying my own way.  Regardless, every month he'd run through his money in about two weeks, then he'd ask me for money.  Being young and stupid, I needed a few months to realize this was a pattern, not just a one-time situation ... and then I needed a few more months to figure out that helping him plan /pointing out ways to be frugal wasn't helping /he didn't want to change ... but before the end of freshman year I dumped him, having realized I couldn't put up with that for the rest of my life.  Incidentally, he also lacked the self-discipline to do his schoolwork.  He flunked out. 

I've talked to my children about that, and I've told them that they must agree with their future spouses about how to spend money -- or they'll be miserable.

You can't avoid literally meeting or being initially attracted to financially irresponsible people, but you certainly can determine whether someone is generally financially responsible before beginning a serious relationship with that person, and certainly before moving in with them or getting married.
Yes, you know that old saying:  People will tell you who they are.  Believe them. 

A casual date might hide his true self for a while, but pretty soon he will show you who he really is -- for the good or for the bad.  Just don't lie to yourself /excuse away what you see. 

Retire-Canada

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #22 on: October 07, 2018, 06:28:26 PM »
I'm not sure what he means by that.  He's a 4% rule guy.

Quote
Anytime you can live off it [VSTAX dividends] you are financially independent.  But when you can live off of 3-4% per year of your net worth you are also free.

Here ^^^ is the quote from that post on his blog. It's not particularly well written as depending how you look at it he's saying you are FI at 1.83%-4%WR. That's a difference of $1M - $2.2M at $40K/yr spend. Not exactly a precise target in terms of advice.

But, if you then read this post: https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/

He advocates for 3-7%WR. That's a spread of $571K - $1.3M

At the very least don't read the OP and think to yourself JL is a 1.83%WR dude! He's not. It's complicated. ;-)
« Last Edit: October 07, 2018, 06:31:30 PM by Retire-Canada »

EricEng

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #23 on: October 07, 2018, 07:04:35 PM »
#1 is one the easiest.  First dates are for more than making out and getting physical.  For me at least they were fact finding, figuring out how the other person works.  What their motivations, morales, values, goals, ambitions are.

Even if they aren't honest it is very easy to determine someone's financial state.  Do they blow excessive money on expensive dates?  Are they thrifty?  Do they buy frivolous things for their home?  Do they regularly say they can't afford basic necessity or cheap activity because they are struggling to make rent for the month?  I can usually get a pretty accurate picture of someone's money skills/views within one to two meetings, even just among friends.

That said, once you know it the next part is to factor in that with your physical attraction.  If you let physical appearance and lust alone drive you into a long term relationship, then you'll have more than just money problems.

englishteacheralex

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #24 on: October 07, 2018, 07:15:00 PM »
You can't control who you fall in love with?! *Sprays water out of mouth disbelievingly*

That is a preposterous idea! Preposterous! What, love just falls out of the sky on you? Like an anvil on Wile E. Coyote or something?

Of course there are fraudulent people out there and it would be hubristic to say that one was immune to such a misfortune as to pick a bad apple without having known ahead of time about his/her secret gambling addiction or whatever.

But sheesh! Sheesh! All the worst parts of dating in Western, developed nations in the 21st century are converging in this statement!

People don't exist in a vacuum, despite all appearances to the contrary on dating websites. Most people are surrounded by a community of people who know them to varying degrees. You are, too. How do you figure out if someone is trustworthy? Good with money? Reliable? Duh! Watch how they act in the established relationships in their lives! Is this a person who surrounds himself with trustworthy people? How are his relationships with his friends and family? Does he blow people off a lot? Perpetually seem out of money? Have some habits that seem expensive or irresponsible or not to align with the reality of his income?

These things are easy to observe over a few months, and it's easy to make them priorities as far as "falling in love" is concerned. Know how most people are obsessed with physical attraction or chemistry or whatever other asinine thing they foolishly think is of primary importance? Throw that stuff out the window and look for character every time. Does the guy bail on you, stonewalling or literally running away when you want to have a tough conversation? Or does he stay and hash things out when shit gets real?

How do you teach your kids to figure this stuff out? I mean, that's a whole book, right there. Let them be burned a couple of times by friends who have amazing personalities and shitty follow-through. I know that for me, learning the hard way about what makes a good friend in middle and high school helped set me up to be a good "people picker" later in life. To the extent to which you're in control of this kind of thing, I guess you just have to be a reasonably healthy person with good boundaries. And part of that is the baseline knowledge that you can totally be in control of who you choose to love.

MrThatsDifferent

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #25 on: October 07, 2018, 11:18:22 PM »
Marriage is fine for me this time around, but the single most fiscally irresponsible person in my life is my mother...

Ummm, yes, same.

Zikoris

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #26 on: October 07, 2018, 11:28:00 PM »
 I mean, it's not THAT had to figure out how someone is with money - just listen to them and watch them. Even if they're not explicit with numbers, people tend to mention money-related things in some way ("I'm broke until X date!" or whatever) Or if they seem to buy a lot of things, especially expensive things, or not have any groceries at home. Early on, another key indicator is what sort of dates they want to do - are they wanting to go for a walk on the beach, or to a fancy restaurant?

I don't think it's a bad idea to also just talk about your long term plans, goals if you have them, or generally what you want your life to look like, pretty early on. You can get a really good idea of someone's financial life from that.

runbikerun

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #27 on: October 08, 2018, 05:13:30 AM »
Ali Wong's Netflix specials are excellent on this subject (among a bunch of other things). I won't detail it further, because it would spoil the comedy, but they're both worth watching.

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #28 on: October 08, 2018, 07:13:01 AM »
I mean, it's not THAT had to figure out how someone is with money - just listen to them and watch them. Even if they're not explicit with numbers, people tend to mention money-related things in some way ("I'm broke until X date!" or whatever) Or if they seem to buy a lot of things, especially expensive things, or not have any groceries at home. Early on, another key indicator is what sort of dates they want to do - are they wanting to go for a walk on the beach, or to a fancy restaurant?

I don't think it's a bad idea to also just talk about your long term plans, goals if you have them, or generally what you want your life to look like, pretty early on. You can get a really good idea of someone's financial life from that.

I would be more worrying for a date wanting to go to fancy restaurants than a date wanting to walk on the beach.
I am pretty sure I am making the precize wrong impression at my work. I have complained about being worried about the date of salary being paid out, because I had no cash flow left om my account (because I had already spent most on buying stock). I saw the eyes of my colleagues roll in disrespect. I have also asked for an advance payment of a work travel bill, because I don't want to pay 1K $ in advance a month early. Boss might think I don't have the cash.
I also try to not have too many groceries in the fridge, because I don't want them to go out on date.

On a podcast I have heard about someone who always wanted to pay for the rounds, when drinking with friends. Wants to be generous. But everything was paid for by credit and his CC debt was growing.

My advice is to keep separate finances and stay unmarried until you know your partner very well and have talked the money talk.

I'm a red panda

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #29 on: October 08, 2018, 07:24:18 AM »
I didn't marry my husband because of his net worth, in fact, he had student loan debt when we got married. But I did make sure he was fiscally responsible and had similar values to mine.  These were pretty easy to learn about these while we were dating- did he drive a super fancy car, or a used one bought with cash?  Did he take out extravagant student loans or join the air force to pay for most of his college and only have loans for his living expenses that weren't covered by the part time job he also had?  Did he buy me an engagement ring that was reasonable or did he pick something super flashy?  Did we share the cost of dates, or did he try to be a big-man picking up all the expenses, that I knew he couldn't afford? Did we go on budget trips where we got hotel rooms with kitchens so we could sometimes eat in, or did we eat all our meals out at 5* restaurants?

It's generally EASY to figure out if people are fiscally responsible.   (Of course there are situations where people are incredibly practiced liars.  But you probably wouldn't want to marry someone cheating on you, and one would think you could eek that out, and sometimes people miss the signs too.)
« Last Edit: October 08, 2018, 09:58:12 AM by I'm a red panda »

happyfeet

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #30 on: October 08, 2018, 07:36:43 AM »
You have to judge someone over a long period of time. 
You need to see how they react in situations - are they respectful?  Kind?  What is their relationship with family, or friend?  Do they have friends?
You need to see if they respect your boundaries.  Do they respect you?
You need to see if they lie.  If someone lies about little things - you have a problem.
Observe how they spend money.
Observe how they interact with other people.
There are some great books on boundaries by Henry Cloud.

Picking a responsible person fiscally is one small piece of picking the right mate.  They can be fiscally responsible and be a bad mate.

 
« Last Edit: October 08, 2018, 07:48:13 AM by happyfeet »

Imma

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #31 on: October 08, 2018, 09:48:20 AM »


I'm still not sure what would have been the right thing for me to do. Demand to see a credit report before marriage?

You can never be 100% certain. Some people are really good at hiding stuff and being dishonest. Some other people are good at ignoring the warning signs. Of course, in your case I have no idea if there's anything you could have done to prevent this. You certainly didn't rush into things without thinking it through.

That being said, I don't think it's strange at all to ask for a credit report. I'm not married, but in a civil partnership form almost equal to marriage in my country.

Before we moved in together, we talked about our income, savings accounts and student loans and we talked about our budgeting goals. We entered a legal partnership when we bought a house the next year and we reviewed all our accounts, including pensions, talked about life, career and family goals, income tax forms etc and for the mortgage we also both applied for credit reports. We've always had separate accounts but we are also 100% open about money and file our taxes jointly. I would never enter a serious relationship with someone who wasn't open about money from an early stage (of course, the better you get to know each other, the more detailed info you give).

mamagoose

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #32 on: January 05, 2019, 04:07:56 PM »
Example of meeting a fiscally responsible person: my now-husband took me out on our first date in engineering grad school to the dollar tree, in a beater vehicle that he did all the maintenance on himself (I learned this on the first date). Dated for 2.5 years and took marriage prep courses to inform us on how to combine and openly discuss family finances. Still married 7.5 years later, almost FIRE.

Example of meeting a fiscally irresponsible person: my sister in law hooked up with a hunky bartender with an african art history degree who openly acknowledged he would never work in that field, does not claim any cash tips for the IRS, and buys brand new muscle cars on credit (and takes them to the shop every weekend to be tricked out, while also not using an AIR FILTER on the engine because it "compromises performance"). Also covered in tattoos (say what you will, this often reads as a sign of fiscal irresponsibility where we live). Within a month of them dating, bartender was arrested for felony drug possession. Went on to get married after knowing each other 4 months. Now in debt from buying a house and living off of student loans + credit cards, and living apart en route to divorce.

There are always signs when dating someone new, you just have to keep your eyes open (and it helps if you're sober before the first hookup that results in beginning a relationship).

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #33 on: January 07, 2019, 08:30:12 AM »


I'm still not sure what would have been the right thing for me to do. Demand to see a credit report before marriage?

You can never be 100% certain. Some people are really good at hiding stuff and being dishonest. Some other people are good at ignoring the warning signs. Of course, in your case I have no idea if there's anything you could have done to prevent this. You certainly didn't rush into things without thinking it through.

That being said, I don't think it's strange at all to ask for a credit report. I'm not married, but in a civil partnership form almost equal to marriage in my country.
+1
Why wouldn't you know the details before marriage?

I'm a little old fashoined I guess, I think sex sould be more intimate then sharing the details of a bank account. Its a red flag if you're willing to sleep with someone but the details of your bank account are off limits; I presume the majority of couples dating for 6 years engage in some premarital sexy time.

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #34 on: January 07, 2019, 08:46:47 AM »
Just came to say JL Collins is the man.

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #35 on: January 07, 2019, 09:02:53 AM »


I'm still not sure what would have been the right thing for me to do. Demand to see a credit report before marriage?

You can never be 100% certain. Some people are really good at hiding stuff and being dishonest. Some other people are good at ignoring the warning signs. Of course, in your case I have no idea if there's anything you could have done to prevent this. You certainly didn't rush into things without thinking it through.

That being said, I don't think it's strange at all to ask for a credit report. I'm not married, but in a civil partnership form almost equal to marriage in my country.
+1
Why wouldn't you know the details before marriage?

I'm a little old fashoined I guess, I think sex sould be more intimate then sharing the details of a bank account. Its a red flag if you're willing to sleep with someone but the details of your bank account are off limits; I presume the majority of couples dating for 6 years engage in some premarital sexy time.

Yes, I would characterize that as a little old-fashioned. For a lot of totally normal people, sex isn't necessarily a harbinger of trust and intimacy -- sometimes it's just a fun thing you do with another person. I certainly would consider sharing the details of my financial life with a date a FAR more intimate activity than just fooling around.
« Last Edit: January 07, 2019, 09:12:34 AM by madgeylou »

Kl285528

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #36 on: January 07, 2019, 09:13:18 AM »
You can't control who you fall in love with?! *Sprays water out of mouth disbelievingly*

That is a preposterous idea! Preposterous! What, love just falls out of the sky on you? Like an anvil on Wile E. Coyote or something?

Of course there are fraudulent people out there and it would be hubristic to say that one was immune to such a misfortune as to pick a bad apple without having known ahead of time about his/her secret gambling addiction or whatever.

But sheesh! Sheesh! All the worst parts of dating in Western, developed nations in the 21st century are converging in this statement!

People don't exist in a vacuum, despite all appearances to the contrary on dating websites. Most people are surrounded by a community of people who know them to varying degrees. You are, too. How do you figure out if someone is trustworthy? Good with money? Reliable? Duh! Watch how they act in the established relationships in their lives! Is this a person who surrounds himself with trustworthy people? How are his relationships with his friends and family? Does he blow people off a lot? Perpetually seem out of money? Have some habits that seem expensive or irresponsible or not to align with the reality of his income?

These things are easy to observe over a few months, and it's easy to make them priorities as far as "falling in love" is concerned. Know how most people are obsessed with physical attraction or chemistry or whatever other asinine thing they foolishly think is of primary importance? Throw that stuff out the window and look for character every time. Does the guy bail on you, stonewalling or literally running away when you want to have a tough conversation? Or does he stay and hash things out when shit gets real?

How do you teach your kids to figure this stuff out? I mean, that's a whole book, right there. Let them be burned a couple of times by friends who have amazing personalities and shitty follow-through. I know that for me, learning the hard way about what makes a good friend in middle and high school helped set me up to be a good "people picker" later in life. To the extent to which you're in control of this kind of thing, I guess you just have to be a reasonably healthy person with good boundaries. And part of that is the baseline knowledge that you can totally be in control of who you choose to love.

Right on!

englishteacheralex

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #37 on: January 07, 2019, 11:48:52 PM »
Thank you! :)

obstinate

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #38 on: January 08, 2019, 06:11:11 AM »
Also, last time I checked, I was never attracted to someone based on their finances.
Also, you tend to only find out about someone's finances once you've spent and lot of time with them and perhaps live with them.
On the second question: seems like you should be able to tell after a couple months at most. “What do you do for work” typically comes up on the first date, and certainly by the time you’re spending whole days with the other person and have been to their house a few times, you should have a general sense of what they’re spending.

On the first point: since you’re not a lower animal, I hope you can overcome feelings of infatuation when you see that a relationship will be bad for you in the long run.
« Last Edit: January 08, 2019, 06:15:25 AM by obstinate »

nereo

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #39 on: January 08, 2019, 06:58:38 AM »


I'm still not sure what would have been the right thing for me to do. Demand to see a credit report before marriage?

You can never be 100% certain. Some people are really good at hiding stuff and being dishonest. Some other people are good at ignoring the warning signs. Of course, in your case I have no idea if there's anything you could have done to prevent this. You certainly didn't rush into things without thinking it through.

That being said, I don't think it's strange at all to ask for a credit report. I'm not married, but in a civil partnership form almost equal to marriage in my country.
+1
Why wouldn't you know the details before marriage?

I'm a little old fashoined I guess, I think sex sould be more intimate then sharing the details of a bank account. Its a red flag if you're willing to sleep with someone but the details of your bank account are off limits; I presume the majority of couples dating for 6 years engage in some premarital sexy time.

Yes, I would characterize that as a little old-fashioned. For a lot of totally normal people, sex isn't necessarily a harbinger of trust and intimacy -- sometimes it's just a fun thing you do with another person. I certainly would consider sharing the details of my financial life with a date a FAR more intimate activity than just fooling around.

Interesting perspectives shared.  FWIW I'm probably somewhere in the middle regarding sex - it can be a fun thing to do with another person but typically I want to have a deeper meaning than, say, catching a movie - but i also think we place a rather hefty burden on sex and don't talk about it nearly enough.

But I have similar feelings about finances.  I'm not going to open up my financial spreadsheets to someone on a first date (I'd be worried about theft among other things!) - but within a few interactions most will realize that I distain wasteful spending and that saving for my future is important.  By the time I'm comfortaable bringing a partner to my parents for holidays they know I'm a member of the MMM forum and that I'm targeting financial independent within the next decade. At the same time I've had countless times to observe their attitude towards money and finances and (yes) sex. Are they living paycheck to paycheck?  Have they ever mentioned funding their IRA? Are there lots of spontaneous purchases when we are out? Is my parents packing a lunch each day or eating out all the time? 

Not everyone is going to be completely detectible, and a select few are really, really good at masking really bad behavior - whether that's massive debt, being a serial killer or organized crime.  But for the overwhelming majority you can judge their financial values in just a few hours spent with them.

As for the ' Avoid fiscally irresponsible people.' - I don't think the advice is to avoid them i all aspect of life, but to sandbox yourself from their toxic behavior.  I've got co-workers who literally take a $1k bonus and spend blow it in one night of partying.  I still interact with them including occasional social interactions, but I sure as hell don't join them in this financial fits of debauchery.

Regarding moms and other fiscally irresponsible people (for me it's my DS and SIL) - you can't dictate who your family is but you can control how you interact with them.

Eric

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #40 on: January 08, 2019, 11:27:53 AM »
Just came to say JL Collins is the man.

I just call him The Godfather.

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #41 on: January 08, 2019, 03:46:09 PM »
Sex and Money! great thread!

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #42 on: January 08, 2019, 06:15:04 PM »
The big problem with #1 is that people can't help who they fall in love with, but [snip] you can totally control who you marry.
Just sayin'.

Unfortunately there are "con-artists" that will pretend to be your perfect partner until you're trapped...  always good to keep a personal savings fund etc no matter what.

nereo

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #43 on: January 08, 2019, 06:47:33 PM »
The big problem with #1 is that people can't help who they fall in love with, but [snip] you can totally control who you marry.
Just sayin'.

Unfortunately there are "con-artists" that will pretend to be your perfect partner until you're trapped...  always good to keep a personal savings fund etc no matter what.
I think I'd rather risk the con-artist than be the con myself.  But to each their own.

MrThatsDifferent

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #44 on: January 08, 2019, 11:03:43 PM »
Like anything else, you first have to know, trust and love yourself. You have to start with you. Once you’ve clear on that, dealing with others is easier. If you know and trust yourself you will keep yourself on the path and not let yourself be dissuaded by anyone else. You will be able to clearly articulate your position and beliefs with anyone and stand behind them. And, if you love yourself, you don’t keep anyone in your life that causes you harm for any reason. You also protect yourself from threats. If you find yourself under attack, you defend yourself and escape. So put the energy into you, become strong in the ways that attract other strong people who have compliment you, not take anything away.

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #45 on: January 09, 2019, 09:20:48 AM »
Just came to say JL Collins is the man.

I just call him The Godfather.

I think he's got it down pretty well, except for the dividends part -- there's no need to ignore capital gains. If you just wait until annual dividends cover annual expenses, you'll likely work longer than you have to.

Eric

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #46 on: January 09, 2019, 09:52:16 AM »
Just came to say JL Collins is the man.

I just call him The Godfather.

I think he's got it down pretty well, except for the dividends part -- there's no need to ignore capital gains. If you just wait until annual dividends cover annual expenses, you'll likely work longer than you have to.

While I haven't read his book, I have read nearly every post on his blog and this is not what he recommends, so I think something is either being taken out of context or being missed.

nereo

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Re: JL Collins Simple Path to Wealth - How to stick to the first rule?
« Reply #47 on: January 09, 2019, 10:42:10 AM »
Just came to say JL Collins is the man.

I just call him The Godfather.

I think he's got it down pretty well, except for the dividends part -- there's no need to ignore capital gains. If you just wait until annual dividends cover annual expenses, you'll likely work longer than you have to.

While I haven't read his book, I have read nearly every post on his blog and this is not what he recommends, so I think something is either being taken out of context or being missed.

See Retire-Canada's post upthread (#22). 
He is definitely a 4% WR advocate, but the wording in his "rules for my daughter' made that very unclear.  I know he used to post here, who knows, maybe he'll chime in with a better explanation.