I love reading about personal finance and the more you read it feels like the same stuff is repeated over and over. However, The Simple Path to Wealth by JL Collins is one I just finished and it’s a short no-nonsense guide that I really enjoyed. This quote sums up his advice perfectly:
Simple is good. Simple is easier. Simple is more profitable.
Every part of the book focuses on simplicity and things that any of us can do, as long as we remove and avoid debt. Outside of the personal part one part that made me really think was at the end he has a section on what to do with your wealth after you’ve spent a lifetime generating it.
Once you reach a certain level where you can live comfortably off your investments he recommended starting a charitable foundation and what is surprising to me is you don’t need to be a multi-millionaire. You can open your own foundation with a minimum of $25,000, and he recommends the Vanguard Charitable Endowment Program because of the low fee structure. Mr. Collins states quite a few benefits to doing this:
- You get the tax deduction in the year you fund your foundation. So I got to take the tax benefits when they mattered most to me.
- If you have stocks, mutual funds or other assets that have appreciated in value you can move these directly into your charitable foundation. You get the tax deduction for their full market value and you don’t have to pay any capital gains taxes on the gain. Double tax win and more money for your charities.
Outside of, this the greatest advantage is that everything runs throughs the foundation and not you personally. Based on this advice you can give freely and keep yourself distanced so you are not getting inundated with people asking for things.
I’m currently in my 30’s and very far away from this but I think it’s a great idea to keep in the back of your mind to support causes that matter to you.