One size fit all financial advice

A couple years ago, the index card craze swept through financial news. Everyone loves simplicity.

The thought that all financial advice for everyone could fit on a single 3″x5″ index card? Can't get simpler than that.

Harold Pollack's one size fits all financial advice (WaPo article)

Here's what the card says:

  • MAX your 401(k) or equivalent employee contribution.
  • Buy inexpensive well-diversified mutual funds such as Vanguard Target 20XX funds.
  • Never buy or sell an individual security. The person on the other side of the table knows more than you do about this stuff.
  • Save 20% of your money.
  • Pay your credit card balance in full every month.
  • Maximize tax-advantaged savings vehicles like Roth, SEP, and 529 accounts.
  • Pay attention to fees. Avoid actively managed funds.
  • Make financial advisor commit to a fiduciary standard.
  • Promote social insurance programs to help people when things go wrong.

It's not bad.

Here's the thing – one size fit all financial advice doesn't exist. Sadly.

But you probably knew this already…

BUT – the card gets you 90% of the way there.

And getting start on your “90% of the way” today, is better than waiting for the 100% to present itself before you make the journey.

Remember, perfect is the enemy of good.

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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8 years ago

A perfectionist is the polite way of saying procrastinator.

I speak from experience.

8 years ago

Yeap, that’s pretty good on an index card. Everyone has to figure out their own personalize strategy. If you’re good at being frugal, then save more. If you’re good at making money, then concentrate on that.

8 years ago

How did you get a picture of my index card? πŸ™‚ But in all seriousness, I think if someone takes that advice, they will not be in bad shape. I just advise that their is on board if they are going to stock so much in savings and investments, because for most people that would involve a lot of sacrifice.

8 years ago

This is a good one and great list of pieces of financial advice to ponder. True, there’s no one size fits all financial advice. Everyone has his/her own needs, wants, and goals in life. The next person to you may see your strategies something of no value to him/her because his necessities are far different than yours. Having said all these, I would agree that though there may not be a ‘one size fits all financial advice’, we can tremendously learn from what other people are doing and pick up bits and pieces of lessons from them to our own… Read more »

8 years ago

Example of why it does not work for everyone:
I’m not maxing out my 401k, because I don’t intend to stay in the US and am not a US citizen: I’ll have to cash it out way before I’m 59, and will pay a 10% penalty on it. So I’m just putting enough in here to get my company match.

8 years ago

A couple of non – direct financial planning tips –
– hedge any other liabilities – the pay off of which may help your dependents in the eventuality of your death with a term life insurance.

– also develop a discipline to keep physically fit – to enjoy your developed financial fitness for a very long time.

8 years ago

Index card advice is great, especially since it can give you a refresher on things you may forget as time passes by. I fund myself having to re-learn a lot of what I already learned years ago on the subject of personal finance if I don’t write some spark notes. Have you taken a look at this article? – It really fascinated me because I had no idea that you can actually come out ahead with a tax-advantaged account vs. normal investing accounts even with the 10% penalty as long as you only withdraw the income (and not the… Read more »

7 years ago

While this note card might not encompass everything you need, it is definitely a helpful reference. As someone who is still putting together a financial plan, it’s reassuring to see that you do not have to have it at 100% from the get go. Thanks for sharing!

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