Everything You Need to Know About Finance…On A 3 x 5 Card

by James Hendrickson on July 18, 2018 · 0 comments

This has been making the rounds for a while, but its a solid nugget of personal finance advice, so we’re covering it here again on Dinksfinance. Back in 2013 University of Chicago Professor Harold Pollack figured that everything you need to know about finance could be written on a 3 by 5 card. Everything else, he said, was a sales pitch designed to separate you from your money.

nine finance rules index card

Basically the card says nine things:

1) Maximize your 401(k) or equivalent employee contribution.

2) Buy inexpensive well diversified mutual funds, such as target date funds.

3) Never buy individual securities.  The guy on the other side of the table knows more about their stuff.

4) Save 20% of your money.

5) Pay your credit card balance in full every month.

6) Maximize tax advantaged savings vehicles such as ROTH, SEP and 529 accounts.

7) Pay attention to fees. Avoid actively managed funds.

8) Make financial advisors commit to fiduciary standards.

9) Support social insurance for when things go wrong.

Some of these are controversial, such as not picking individual stocks.  Others of them are good financial advice in any circumstances, such as paying off your credit cards or making financial advisors commit to standards.

So, if you’re looking for a good set of rules to guide your finances, this isn’t a bad starting place.

More Reading

If you are reading this posting looking for more basic finance education, consider reading the following:

Jane Bryant Quinn’s Making the Most of Your Money.   Quinn is an under-rated but excellent personal finance advocate.

Dave Ramsey’s Total Money Makeover – Dave is religious so a lot of people don’t like him, but his advice for getting out of debt works.

Robert Kiyoaski’s Rich Dad Poor Dad. Kiyosaki is a controversial guy but Rich Dad, Poor Dad is a ground breaking analysis of class and wealth – accessibly written at an 8th grade level.

Readers – any personal finance rules you’d add? Leave a comment below.

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