2011 J.L. Collins wrote a beautiful series of letters to his daughter. I discovered them much later, but I wish I had found them ten years earlier. He outlines a simple, practical approach to achieving financial freedom and building healthy habits around managing your money in these letters.

I truly enjoyed the book—not just for its message, but also for its clarity and simplicity. Let me share what stood out to me the most.

When are you financially independent?

It’s when your annual expenses are covered by 4% of your invested assets. That’s it. This simple rule can help you understand your “freedom number”—the money you need to reach independence. The beauty is, you can work toward it from both directions: by increasing your assets and by optimising your expenses.

I personally like to keep it even simpler than J.L. Collins suggests. My go-to is VSAT or a Vanguard S&P 500 index fund—any low-cost S&P 500 fund will do. The key idea is to invest as much as you can. You’re on the fast track if you can save and invest 50% of your income. The more you save and invest, the sooner you’ll get there.

I love this straightforward approach. If you’re curious, I highly recommend checking out jlcollinsnh.com for more inspiration and ideas.