AT LEAST ONCE A YEAR, I watch the hilarious short YouTube clip by personal-finance author JL Collins. If you aren’t around small children and can handle liberal use of America’s favorite four-letter word, check it out. Some may recognize it as a parody of actor John Goodman’s soliloquy from the film The Gambler starring Mark Wahlberg.
The clip, however, is more than just entertaining. Its content is what keeps me and, judging from the half-million views, others coming back. In the video, Collins argues that amassing $2.5 million gives the possessor—er, shall we say—“forget-you money.” To Collins, that means no one can tell you what to do. Not your boss, not your girlfriend, nobody, because you can shine them off with, “Forget you. I’ve got [a lot of] money.”
Collins advocates an 80-20 portfolio. Put 80% in Vanguard Total Stock Market Index Fund (symbol: VTSAX), which holds every publicly traded U.S. company. With the remaining 20%, buy a broad-based bond fund (VBTLX) to “smooth the ride,” he says.
He’s not done dispensing advice to Wahlberg’s character. Collins says not to buy a house (rent, let the landlord worry about it) and drive an “indestructible” economy car. Once you’ve done all that, you’re in your “Fortress of Solitude.” I’m sure we could all quibble with the details, but overall I’ve heard worse money wisdom.
What’s he getting at with all of this advice? If you have $2.5 million and use the 4% rule, you could pull out $100,000 a year from your nest egg to live on. Nowhere in the video does it say you have to, or even should, quit working or bringing in additional money. It’s just that an 80-20 portfolio of that size gives you the comfort of knowing you have a potentially healthy income stream. From your “fortress,” you’re protected from all of the horrible things that can happen in this crazy world.
After hearing that speech, who wouldn’t want forget-you money? I know I did, and I think that’s the reason the idea stayed with me all these years. This year, upon rewatching the clip, I realized that I’m not too far from Collins’s unforgettable figure. Then it hit me that the video was released many years ago—in 2016. With inflation on everyone’s mind, I knew $2.5 million during the Obama administration didn’t have the same buying power today.
I visited the Bureau of Labor Statistics’ inflation calculator to see how Collins’s advice translates to today’s dollars. According to the calculator, to equal $2.5 million in 2016 dollars, you’d need almost $3.3 million in 2024. While that took some wind out of my sails, I already instinctively knew that I couldn’t be that close to forget-you status.
As I previously wrote, my wife and I are 10 to 12 years from retirement. By then, to keep pace with inflation, the forget-you amount will be higher still. Even before tracking the forget-you index, I knew from my mentor that I had to invest in things that—at a minimum—kept pace with inflation. Being in my 30s and 40s, that meant stocks.
Even today, our portfolio has very little in bonds. It’s almost exclusively in low-cost stock-index funds. Another sizable portion is in my wife’s employer’s publicly traded stock, which is outside our control. While we’d prefer to invest that money in mutual funds, the company stock has done fine and is a dividend aristocrat.
So, will I ever be able to say “forget you” to my boss or Mark Wahlberg or anyone else? I think so. As currently designed, our portfolio should outpace inflation and allow us to achieve a comfortable retirement. I might never use the same colorful language that Collins did. Still, if you find yourself asking me to do something 10 years from now and I say “no,” just know that in the back of my mind are two words I recall hearing from JL Collins.
Licensed in both Ohio and Kentucky, Ben Rodriguez practices real estate law in Cincinnati, where he lives with his wife and daughters. Since 2009, Ben’s made a hobby out of personal finance by reading books and articles on the subject, and also listening to podcasts. Check out his earlier articles.
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Hi all! This is a lovely post.
One thing I love to do with these posts on HD is to click the ads. I let it load, then just hit the back button and in back at the post. I figure I’m directing money to JC. Just my good deed each time I’m here at HD
Thanks for this. In the last day I’ve gone back to watch the YouTube clip numerous times. I’m still laughing. Also – sage advice.
Well, I figured I could swing forgetting my bosses (non-profit boards, ugh). When my brother died with two ex-wives and no children. I’ve got a 99% success number with less than $1m. We have been f-t travelers now for over 4 years and loving every border crossing.
Live your life. Live your life.
I love the original by John Goodman. Unfortunately JL Collins changed one big piece of advice- he said to rent versus own a home. Doing so leaves you in a non “fu” position as the landlord can raise your rent. When you own your home your rent is fixed.
On the flip side, if you can’t afford a rent increase then you can’t afford the higher taxes and maintenance.
The one benefit of home ownership when retired is the monthly outgo should be lower (hopefully) with owning verses renting as there is no principle and interest to pay for. Either way one is paying taxes and insurance, but owning allows you to only pay two of the four parts of home ownership.
IAD…What a great comment…”On the flip side, if you can’t afford a rent increase then you can’t afford the higher taxes and maintenance.”
I had never thought of it that way, but you are so right!
I have no mortgage payments, and I live in NC, so the Property Taxes are moderate, but Home Owners Insurance rises annually. Again, here in NC it is still reasonable, but there really isn’t much you can do to control it, other than increase your deductibles.
I do like the fact of ownership, BUT my kids will never live here, as they both live in different states, so they will just sell it and split the proceeds.
Until the air conditioner breaks down!
Yeah, that may be his most controversial piece of advice there. I’m not even sure JL follows it himself. Interestingly, my experience has arguments for both sides. I’ve loved not paying rent or having to move, but I’ve hated all of the repairs and maintenance I’ve had to do and pay for. I think it’s largely a personal choice, but in some ways I like his contrarian take which very much goes against the conventional wisdom that you “must own a home.”
I agree with you, Ben. Home ownership is not for everyone. My wife and I retired years ago, and still prefer to own, despite the growing need to pay others to do maintenance. The price of a median home in our city is comparatively modest, which helps to explain why home equity makes up a small portion of our net worth. We know others who have always rented or leased, and who seem successful and happy too. We bought a suitable home at an affordable price over 36 years ago, instead of a larger, fancier home and invested the difference. I’m not qualified to give others financial advice, but this worked out well for us.
Maybe you are qualified to give advice because you walked the walk, not talked the talk. You lived beneath your means and invested the difference–the simple, most basic way for those of modest means to get ahead.
Thanks, Patrick. I actually do give unsolicited advice on occasion, but only to our children and grandchildren. And when asked, which is not often, to a small number of friends. Even then, I try to avoid being dogmatic, and simply explain my reasoning. More importantly, I have gifted books by Jonathan, Bill Bernstein and a couple others hoping they will read and profit from them!
J L Collins financial writings started as love letters to his daughter.
I have had his website bookmarked for a long time and found website and his book The simple Path to Wealth to be good reads.
https://jlcollinsnh.com/stock-series/
This is fantastic basic advice. (I write this drinking a cup of self-made drip coffee, not a take-out artisan latte, so, I guess JL Collins would approve)
If you have a decently constructed portfolio and enough F-U funds so you do not have to draw a sizable portion each year, the sequence of returns risk lessens, and, inflation is thus not too much to worry over. The portfolio will likely grow to meet or exceed inflation over several years.
The one thing missing, as you’ll find as you get closer to and then in retirement, particularly post age 60, is the tax man. He is the perhaps ultimate F-U guy. For those who are say 50+ (even earlier if you have the inclination), now is the time to start prepping for how to shift your money around to lessen that impact.
Planning for IRMAA, RMDs, NIIT, ROTH conversions, yada, yada, are best done perhaps over the 10+ years prior to your farewell luncheon.
Personally, I didn’t know any of that stuff, or, at least I did not fully appreciate the large impacts, and thus having been scrambling over the last several years to get my ducks in their proper order.
I hear ya, Joe!
Thank you for your post and the link to the video. I love it and will share it with my friends.
Ben, I think this is great. We financial nerds love to devour books about the subject, but most people don’t have the time or inclination to spend days or weeks absorbing the minutia of investing. I also think that a lot of people feel talked down to when a guy in expensive clothes goes on and on and on about things financial. In less than 2 minutes JL lays out a strategy in an entertaining way that can (maybe) get normal people to listen.
And just to repeat Ben’s warning. If profane language offends you, you don’t want to f#@!ing listen to this as@#$ole!
I agree. His succinct distillation is refreshing.
For me, “eff you” money is the whole reason I save. It’s not to buy a show off house or car. It’s not to buy expensive clothes. I do like riding in the front of airplanes and eating in “good” restaurants. Otherwise, JL and JG nail it.
This is pretty much our exact way of doing things. We have the ridiculously expensive Delta Amex Reserve card, but it puts us automatically in Delta Comfort, and frequently first class. We really appreciate the Delta Sky Club access. Our main vehicle is our Honda Odyssey minivan, bought new 23 years ago and currently with 275,000 miles on it. When we travel, which is a lot, we look for great places to eat.
I just read another HD article about how when you own you’re basically paying yourself bond income. Our house is fully paid, so our not-paying-rent bond-like “income” is rather nice.
I hear you. JL Collins also said about investing, “every month I buy thing I want most in life–my future freedom.”