The Index Card by Helaine Olen and Harold Pollack
Why Personal Finance Doesn’t Have to Be Complicated
There is nobody who does not want to improve their finances. But the issue with the majority of people is that the common man is overwhelmed with multiple investment options and he becomes confused with which option to prefer. This is nothing but Paradox of Choice. We become so overwhelmed with the multiple choices that we end up with doing nothing about our finances.
This book provides a very simple solution. The authors states that
Most of us don’t need a complicated, elaborately planned investment scheme that requires more choices and frequent changes. As the cliché goes, don’t let the perfect be the enemy of the good. There is no perfect investment scheme anyway. Don’t let anyone tell you otherwise.
The authors feels that the basic investment advice could be written on 4 by 6 inch Index card on which they have written 10 rules to be followed. The authors has strongly recommended that if you follow only these 10 Rules you will always be in control of your finances. So let us know these 10 Rules-
Strive to Save 10 to 20 Percent of Your Income.
Pay Your Credit Card Balance in Full Every Month (and Deal with Other Forms of Debt)
Max Out Your 401(k) and Other Tax-Advantaged Savings Accounts
Never Buy or Sell Individual Stocks
Buy Inexpensive, Well-Diversified Indexed Mutual Funds and Exchange-Traded Funds
Make Your Financial Advisor Commit to the Fiduciary Standard
Buy a Home When You Are Financially Ready-
The authors recommend 20% Down payment and rest in Mortgage at fixed rate interest for 15 or 30 years.Experts recommend spending no more than a third of your take-home pay on housing.
Insurance—Make Sure You’re Protected
One should do a lot of homework before buying it according to your own personal needs as everybody’s needs are different.
Do What You Can to Support the Social Safety Net
Remember the Index Card
Finance is not rocket science. If it were, it wouldn’t all fit so neatly on one four-by-six-inch index card. With the card, it never has to be hard. Hang it up on your fridge.
Take a screenshot of it so you can keep it on your phone. Carry it around in your pocket.
At the end of the day the personal finance is very personal. So with little effort one can definitely manage one’s financial life.