JL Collins Simple Path Wealth Audit

A streamlined financial review built around the JL Collins wealth audit approach. Track your savings rate, verify low-cost index holdings, and protect your cash buffer without over-managing.

5 time blocks, 25 minutes in total.

Time blocks

Savings Rate Calculation: 5 min
Divide saved income by gross earnings to measure current savings rate
Index Fund Consolidation Sweep: 5 min
Verify holdings sit in broad total market index funds
Fee Drag Audit: 5 min
Check expense ratios and remove actively managed fund fees
Cash Buffer Inspection: 5 min
Confirm cash reserves cover planned living costs to weather dips
Allocation Check and Stay the Course: 5 min
Confirm stock and bond percentages then close accounts without trading

About this routine

The JL Collins wealth audit offers a straightforward way to evaluate your personal finances using principles from the book The Simple Path to Wealth. Rather than trading stocks or tracking daily market movements, this framework focuses on long term accumulation, high savings rates, and broad index fund ownership.

During this 25-minute session, you inspect five core financial pillars. You start by calculating your savings rate to confirm you are keeping a healthy portion of your earnings. Next, you verify that your investments sit in low-cost total market index funds, eliminating high expense ratios and active management fees that silently erode wealth over time.

Finally, you inspect your cash reserves to ensure you can weather market downturns without selling equities early. Once your target stock and bond allocations are verified, you close your accounts and stay the course. By limiting check-ins to a few times a year, you protect your portfolio from emotional trading and maintain clarity.

Why this routine works

Tracks your actual savings rate against target goals
Identifies hidden fee drag and high expense ratios
Ensures portfolio simplicity with total market index funds
Prevents impulse trading by enforcing a structured review schedule

FAQ

What is the JL Collins wealth audit?

It is a periodic financial check-in based on JL Collins Simple Path to Wealth principles, focusing on savings rates, total market index funds, low fees, and cash reserves.

How often should you do a JL Collins investment check?

JL Collins recommends reviewing your accounts rarely, typically once or twice a year, to avoid over-trading and emotional reactions to market fluctuations.

What core investments form the foundation of this check-in?

The audit emphasizes low-cost total stock market index funds, broad international funds, broad bond funds, and an adequate liquid cash buffer.

Sources

The Simple Path to Wealth, JL Collins
Stock Series, JLCollinsNH Blog