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.
