How to Manage Your Money: 3 Principles from JL Collins


Originally published at:

Here at Republic Wireless, we are passionate about helping you save money for the more important things in life. We also know that personal finance and managing your monthly expenses while also thinking about long term savings goals can be overwhelming. In fact, we learned in a recent survey that 53% of Americans feel at least somewhat overwhelmed by financial burdens, and that thinking about finances keeps 59% of us up at night1. So, we recently sat down with financial guru JL Collins to get his take on personal finance and learn his tricks of the trade. Collins is an…

1 Like

Overall, great advice, however, Collins’ principles might seem unattainable for a lot of people who are struggling day to day. I absolutely agree about tracking expenses - I’ve been doing this for almost 40 years. I retired at 62, put two kids through college debt free and have no debt and that’s not a coincidence. By the way, some debt is ok, like a mortgage. Credit card debt, auto debt or leasing is an anchor.

Spending only 50% of your take home pay isn’t really necessary unless you want to be financially independent at a very young age (BTW - don’t have children!). If someone works for an employer that has a 401k, start with small percentage contribution. Let’s say they get a 4% raise. Allocate 2% to the 401k. Keep doing this until they get to 10% or more. If they start early enough, and invest it properly, they will get to financial independence.

He’s right on with the investing part. Low cost index funds or exchange traded funds are the way to go. Come up with a suitable allocation scheme (you can get help with this) and then just don’t do something, stand there! Do not panic and over react when the market gets crazy. This is where using an independent registered financial advisor can be a big help. They should be registered with FINRA (check them out at which requires them to be a fiduciary. A fiduciary can only act in your best interest. So called advisors that work for insurance companies or the big brokerage houses are NOT fiduciaries. They make money buying and selling. A RIA gets paid a fee (usually a percentage of assets). They have an interest in making your account grow, not churning your account to make their quotas. They will also talk you down off the ledge should the market have a major correction. Full disclosure: I am not a financial advisor nor do I have one, but I’ve been studying this stuff for over 40 years.


Thank you, @robertm.alhqls, for sharing your story and for your thoughtful and well-articulated advice. Congratulations on your financial successes! How are you spending your time enjoying your retirement?

I also totally agree with you that some of the goals might seem intimidating - even JL acknowledges that folks on the FI (at an early age) path are “unicorns”! When he and I were chatting, I was surprised (and really impressed!) by the 50% savings rate. I’m certainly not even close to that. But, hearing such an aggressive goal did encourage me to take a step back and take stock of where my money is going. In the coming weeks, we’ll be sharing additional savings stories that are equally as inspiring, but less aggressive (and therefore more attainable).

I feel really fortunate that a big part of my job is talking to members like you and JL, hearing your stories, and learning from you. Thank you again for sharing!


Overall, good advice. However, I agree with @robertm.alhqis in that few can handle all of Collins’ principles and many may have trouble doing just one of them. I believe that most people need more attainable goals laid out for them, at least to start.

I started my career in 1983, opened my first investment account for retirement in 1984, and retired in 2012. Yes, I retired after less than 30 years in the work force and I fully expect to be retired longer than I was in the work force. (FYI: I was 51 when I retired.)

Collins is correct, budgeting all of your money is key. However, his 50% advice on spending is probably going to make most people walk away before they even try, as @cstudwell said. Budgeting of some form is needed and, for many, that may be a process of taking it one step at a time to control their spending and allocate savings.

Of course, proper budgeting will include saving. Saving enables investing. And, investing is how you get your money to work for you, which will allow you to retire comfortably.

When I started investing, I followed the herd and went to a financial adviser and bought into the recommendations and accepted the costs and fees. Some of which were not openly declared. Over time, I realized that these costs and fees were reducing my gains. I started looking at index funds and, like others, determined that I could do just as well if not better by investing in index funds. Over time I narrowed my focus down to just the S&P 500 index. In particular, low-cost investing in the S&P 500 index. Don’t “play the market,” don’t be more aggressive with your long-term money, just put it all into the S&P 500 index via a low-cost fund or ETF through a low-cost broker. (I, too, like Vanguard but there are others that are just as good.) Bottom line, ALL money that you do not need for seven or more years, put it into the S&P 500.

Google “The Buffett Bet” and see for yourself how well that worked. The bet started in 2007, not long before the biggest downturn in recent history, and he still won quite handily.

You can download the returns for the S&P 500 going back to 1927 and the inflation rates going back to 1914. Pick any 45-year period (roughly a career) and run the numbers. Heck, check out what I did, take any 30-year period and run the numbers. If you saved only 10 to 15% of your pay, through-out your career, what would you have had? Imagine if you could save more than 15%.

After I realized the value of low-cost index investing, I began investing more and more into the S&P 500. Due to my regular saving and diligent investing, I became financially independent. After developing and double-checking my approach to retirement withdrawals, I knew I was financially able to retire.

Through my experience, I developed an approach to personal finance which I call BSIR. Budget, Save, Invest, Retire. You need to budget wisely, save regularly, invest diligently, to retire comfortably.

My life’s experiences make me believe that many people need a guide to help them develop their own simple plan that will get them to where they need to be. I developed BSIR for myself and then tried to pass it along to my younger family members. (Similar reaction, BTW.) So, after retiring, I published three short (20 to 30-minute read) books on the approach. The goal was to provide my nieces and nephews a guide that gave specific percentages to allocate towards saving, investing, and spending as start-points to allow them to make a budget that will work for themselves. That budget, coupled with low-cost investing, and a managed withdrawal plan, can make for a comfortable retirement.

Before you decide to retire, make sure you have three things in hand:

  1. Finances.
  2. Social network.
  3. Plan to fill your day (hobby, activity, volunteer, etc.)

You can do this.


Back in the day, early in my “real job” working days a guy I worked with told me this: “start a budget, and you will get a 10% raise in pay without having to talk to the boss.” Since I was in civil service and my boss couldn’t give me a raise anyway, it seemed like a good thing to try. I have now been budgeting for over 35 years and he was, if anything, shooting low on the benefit.

As others have pointed out, starting with financial monitoring is important and just that practice lowered our spending (had to write it down…had to admit/justify it to self and spouse…). We did this for a couple months, then built as many categories into a budget as we wanted based on those records. Over the years, these categories have changed with our needs.

One real key for us was to manage the bills that come seemingly out of the blue, once or twice a year. If you have ever been caught off guard by an insurance or property tax bill, or needed new tires just when you went broke this is a powerful tool! It is a little tricky to get this started but essentially, once on track, we were saving for these kind of bills each month (insurance twice a year? Total divided by 6. Property tax once a year? Total/12. Energy bills vary? Monthly totals added up/12 And so on). We kept the funds in our checking account, but if you are not disciplined enough for that, keep the funds in a separate place, a little harder to reach. While those funds were building up, if we ran out of “spending money” we were essentially broke until the next paycheck, despite the money set aside for bills and other budget items (monthly ones too, of course). When a big bill or predictable car repair bill came due, we could simply write a check and move on.

We both had learned early that debt was to be avoided, having both been caught in the trap of thinking that next month we would have enough money to pay it off…but of course we did not. We went to the extreme of saving up, long and hard, for even the biggest of purchases, including cars (after those first few) and house/land (after only one mortgage). This was in the 70’s and 80’s, perhaps more feasible then but I suspect still possible.

I could go on. Suffice it to say, we are sold: budgeting can be a powerful tool for getting your finances in order and making your financial life easier. And it is might just be easier to set up and maintain than you think!


@jimnjo Great feedback! You bring up a really good point about the “non-regular” bills, or those that are inevitable, but that are easy to forget (unlike your mortgage/rent payment, utilities, etc.). One trick I’ve started to employ is to keep a dedicated savings account for each of those categories - so I have a savings account for insurance premiums (2x yearly auto insurance payment and 1x yearly life insurance payment), one for car maintenance and saving for an eventual new car purchase, one for vacations, etc. Similar to how you approach it, except I have to keep it in dedicated accounts because I’m not as disciplined as you are! :slight_smile: Then, when I make a payment associated with each of those categories, I simply transfer the payment amount into my checking account. I would only recommend this if you have access to no-fee savings accounts - it’s certainly not something you would want to pay fees for. Thanks for the great ideas and advice!

1 Like

@SHEK Thank you for your feedback and wonderful advice! I love your BSIR acronym. Are your books published on Amazon, or somewhere for purchase?

What are your thoughts on the 4% rule for retirement withdrawals? Is that the approach you took to determine when you were FI? Do you think that rule is still relevant today?


It seems retirement is busier than I envisioned. We are doing a lot more traveling, both internationally and in the US. We love the hiking opportunities in our National Parks in the West and Southwest. We’re also doing grandchildren childcare 2 days a week. My wife volunteers at a local food pantry and I’ve been doing volunteer tax prep work for AARP at local senior centers. I’m working on a short financial education course aimed at high school students to introduce them to the concepts of savings and investing EARLY. Sadly my work at the senior centers has revealed a lot of malfeasance on the part of the financial services business. Many seniors are having their accounts churned for the benefit of their broker, but not for them. So I’m thinking about developing some material that could be presented in small groups or one on one to help counteract this.



Yes, @cstudwell, my three books are available on Amazon, iTunes, and Audible. They are easy to find with a search of “BSIR” on Amazon. From there, you can get any of the three options (e-book, audio book, or paperback). I will include links at the bottom of this note. On iTunes, I always have trouble finding them, but they are there.

As for the 4% rule (also known as the Bengen rule), I think using it as a planning tool to determine how much you might need is a good idea. However, when it comes to your actual withdrawal plan, I suggest another option. I address this in chapter 4 of my third book, A Tiny Book on Personal Finance: Retirement Withdrawals. I actually list five options for a withdrawal strategy. The last I list is my strategy, which is a mixture of two rules / principles that I developed and call The Faucet and The Funnel. These principles are designed to allow an individual the ability to control the rate of withdrawal and to provide a buffer for when the market is in a downturn.

To determine that I was FI, I not only ran my numbers through some of the rules I list in my book, but also against historical market data and through multiple on-line retirement calculators. While there is never certainty in guessing the future of the markets, my conservative withdrawal approach more than assured me that I should have sufficient financial reserves to live well past 100 years old. And, by using my Faucet and Funnel principles, possibly extending that by five or so years. (I don’t expect to live to 100, but knowing that I can means I can plan for my heirs without impacting my quality of life in retirement.)

The three books I have published are:

Book 1:
A Tiny Book on Personal Finance: Budgeting



Book 2:
A Tiny Book on Personal Finance: Saving and Investing



Book 3:
A Tiny Book on Personal Finance: Retirement Withdrawals



All the Best,


Hi @SHEK’ husband,

I’ll be glad to change your Community username, just let me know what you’d like it to be!

The links to your books are within the Community guidelines and appropriate to the conversation, thanks for sharing!

Message an
Expert customer