The best personal finance advice is easy to understand and put into practice.
Everything you need to know about personal finance can fit on a 4-by-6-inch index card.
So suggests University of Chicago social scientist Harold Pollack. We like the simplicity of this — having published “10 Commandments of Wealth and Happiness.” His is a pretty amazing distillation of money advice. Here are a few lines from the card:
Max your 401(k) or equivalent employee contribution.
Save 20 percent of your money.
Pay your credit card balance in full every month.
Pay attention to fees. Avoid actively managed funds.
“Pollack’s right. Follow these principles and you’ll be in much, much, much better shape than most Americans,” Ezra Klein wrote on The Washington Post’s Wonkblog. “The people making it complicated are often trying to make money off of you.”
It’s probably a good thing the stock market didn’t exist in the time of King Midas. Instead of hearing about him counting his money, we’d have to listen to his investment strategy.
“Just about every complex financial product and cutting-edge money tactic manufactured by the financial services industry has turned out to be bad for your financial health,” Chris Farrell wrote on StarTribune.com. (That’s arguably true for the economy’s health, too. Complex derivative trading is understood to be one of the major causes of the financial crisis.)
What financial tips would you put on an index card? Share yours on Facebook.