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The Index Card: Why Personal Finance Doesn't Have to Be Complicated
TV analysts and money managers would have you believe your finances are enormously complicated and if you don’t follow their guidance, you’ll end up in the poorhouse. They’re wrong.
When University of Chicago professor Harold Pollack interviewed Helaine Olen, an award-winning financial journalist and the author of the bestselling Pound Foolish, he made an off-hand suggestion: everything you need to know about managing your money could fit on an index card. To prove his point, he grabbed a 4" x 6" card, scribbled down a list of rules, and posted a picture of the card online. The post went viral.
Now Pollack teams up with Olen to explain why the ten simple rules of the index card outperform more complicated financial strategies. Inside is an easy-to-follow action plan that works in good times and bad, giving you the tools, knowledge, and confidence to seize control of your financial life.
When University of Chicago professor Harold Pollack interviewed Helaine Olen, an award-winning financial journalist and the author of the bestselling Pound Foolish, he made an off-hand suggestion: everything you need to know about managing your money could fit on an index card. To prove his point, he grabbed a 4" x 6" card, scribbled down a list of rules, and posted a picture of the card online. The post went viral.
Now Pollack teams up with Olen to explain why the ten simple rules of the index card outperform more complicated financial strategies. Inside is an easy-to-follow action plan that works in good times and bad, giving you the tools, knowledge, and confidence to seize control of your financial life.
256 pages, Hardcover
First published January 5, 2016
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Displaying 1 - 30 of 446 reviews
August 1, 2016
I was two chapters away from giving this book a 4 star review and then I read the chapter about tip 9.
I've read lots of books about personal finance and through tip 8 I thought the authors were giving great advice.
However, I 100% disagree with their tip 9. To make my point I've knocked the book from 4 stars to 2.
Tip 9 is "Do what you can to support the Social Security network."
The authors are big defenders of SSI. They specifically dispute the claim the Social Security is a Ponzi scheme, but don't say why. Ignore the cries of experts like former Comptroller of the the Currency David Walker, who has been proclaiming the failures of SSI for years, is not responsible. SSI is a Ponzi scheme - anytime you set up a system where one group pays for another with no plan for the final group to get paid, that's a Ponzi scheme.
SSI doesn't need support, it needs to be reformed.
For academics like Olen and Pollack, the answer to fixing Social Security is often to raise taxes on those who are well off and redistributing their income to others. That doesn't sit well with people like me who don't think government should pick winners and losers. If a poor person robs a rich person, they get arrested and go to prison. But if government takes the same amount of money from rich people to give to poor people, that's okay?
The mismanagement of the Social Security program for at least the last 30 years is one of the great travesties of American history and evidence that government often makes things worse. I've actually studied this more than most and have come up with a plan to help solve the under-funding of Social Security for anyone born in the 21st century. It could give people $1 million or more tax free by age 70. (see https://www.linkedin.com/pulse/young-...)
I still liked the book through tip #9. Good advice up to that point.
But it was like reading a novel you like with a lousy ending, hence my screed and the 2 star rating.
I've read lots of books about personal finance and through tip 8 I thought the authors were giving great advice.
However, I 100% disagree with their tip 9. To make my point I've knocked the book from 4 stars to 2.
Tip 9 is "Do what you can to support the Social Security network."
The authors are big defenders of SSI. They specifically dispute the claim the Social Security is a Ponzi scheme, but don't say why. Ignore the cries of experts like former Comptroller of the the Currency David Walker, who has been proclaiming the failures of SSI for years, is not responsible. SSI is a Ponzi scheme - anytime you set up a system where one group pays for another with no plan for the final group to get paid, that's a Ponzi scheme.
SSI doesn't need support, it needs to be reformed.
For academics like Olen and Pollack, the answer to fixing Social Security is often to raise taxes on those who are well off and redistributing their income to others. That doesn't sit well with people like me who don't think government should pick winners and losers. If a poor person robs a rich person, they get arrested and go to prison. But if government takes the same amount of money from rich people to give to poor people, that's okay?
The mismanagement of the Social Security program for at least the last 30 years is one of the great travesties of American history and evidence that government often makes things worse. I've actually studied this more than most and have come up with a plan to help solve the under-funding of Social Security for anyone born in the 21st century. It could give people $1 million or more tax free by age 70. (see https://www.linkedin.com/pulse/young-...)
I still liked the book through tip #9. Good advice up to that point.
But it was like reading a novel you like with a lousy ending, hence my screed and the 2 star rating.
September 20, 2016
Somewhat paradoxically for a book of 210 pages, the premise of The Index Card is that the necessary rules of personal finances can fit on (wait for it) an index card. As the authors sensibly explain in the beginning, however, basic rules often require a little elaboration to be implemented, and that is what the book tries to do. I’m sold!
It does a decent job of it, but with some holes. One issue is that it occasionally throws around vocabulary assuming you already know what it means, such as “small-cap index fund.” (I should have paid more attention in high school, you might say? I wouldn’t be reading a book that sells itself as Finance for Dummies if I’d taken the class, I retort!) And in oversimplifying some complicated topics, it fails to reach the depths necessary to understand them.
Nevertheless, its conversational style is generally very accessible, and more than a few of its explanations are a home run (e.g., the fiduciary standard). Even with the more obtuse topics (stock trading is at the top of the list), the basic principles are sound. They are therefore something I know I can figure out. For a finance illiterate such as myself, it’s a good starting place.
A note on the final rule (“support the social safety net”): this is a blatant political statement that only tangentially relates to the topic. Perhaps a little like shaming Bush at the Oscars, but I accept the digression for the simple reason that I agree with it. Ends rarely justify the means, but in this case the message is important enough to forgive some subversion.
As for the meaning of “small-cap index fund,” it would have been nice if the authors had told me, but I suppose that’s why Larry and Sergey invented Google. Wisdom such as this book offers, on the other hand, is a little harder to come by. Overall, it’s a fine endeavor whose greatest contribution is concentrated in the Ten Commandments of finance that do, indeed, fit on an index card.
It does a decent job of it, but with some holes. One issue is that it occasionally throws around vocabulary assuming you already know what it means, such as “small-cap index fund.” (I should have paid more attention in high school, you might say? I wouldn’t be reading a book that sells itself as Finance for Dummies if I’d taken the class, I retort!) And in oversimplifying some complicated topics, it fails to reach the depths necessary to understand them.
Nevertheless, its conversational style is generally very accessible, and more than a few of its explanations are a home run (e.g., the fiduciary standard). Even with the more obtuse topics (stock trading is at the top of the list), the basic principles are sound. They are therefore something I know I can figure out. For a finance illiterate such as myself, it’s a good starting place.
A note on the final rule (“support the social safety net”): this is a blatant political statement that only tangentially relates to the topic. Perhaps a little like shaming Bush at the Oscars, but I accept the digression for the simple reason that I agree with it. Ends rarely justify the means, but in this case the message is important enough to forgive some subversion.
As for the meaning of “small-cap index fund,” it would have been nice if the authors had told me, but I suppose that’s why Larry and Sergey invented Google. Wisdom such as this book offers, on the other hand, is a little harder to come by. Overall, it’s a fine endeavor whose greatest contribution is concentrated in the Ten Commandments of finance that do, indeed, fit on an index card.
October 5, 2017
Helpful reminder of basic tips: Save on a regular basis; don't spend too much.
Subaccounts for your main bank account:
1. Savings
2. Vacation
3. Emergency fund/rainy day
4. House
5. Taxes
Don't prioritize emergency savings over credit card debt. Pay off your credit card first!
Secret to our grandparents' financial discipline:
- Lack of access to credit
- Layaway plans
- Loved ones (reality test)
- Loan sharks (most people sensibly avoided them)
Rank your debt; pay down the bill with the highest interest rate first.
Figure of the difference between IRAs, Roth IRAs, and SEP-IRAs
Traditional IRA - (they're like the original 401(k) plan ;) You can put up to $5500, and another $1K if over 50 yrs. Immediate tax deduction, money grows tax-free; withdrawals taxes as earner income.
SEP-IRA - If you operate your own business, you can contribute 25% of self-employment income, up to a high limit (in 2015, it was $53K)
Roth IRA - No immediate deduction; money is contributed after-tax; generally never taxed again.
NEVER take money from a retirement account unless you are out of options.
Warren Buffett: Invest in index funds (like a very low-cost S&P 500 index fund).
Beware of fees.
Demand that your financial advisor be a Fiduciary (looking out for you). Not all are.
Check with the Certified Financial Planner (CFP) Board
Fee-only advisor: National Association of Personal Financial Advisors (NAPFA)
If you can buy disability insurance, do it. According to the Council for Disability Awareness, 1 in 4 20-year-olds will be disabled before they reach retirement age.
Insurance: Rental, Homeowner, and Auto
Home - protect your net worth (not pick up cost of every repair bill)
Go for high-deductible options. You won't use this insurance unless very unlucky.
Car - protect against collision (covers blue book value - not actual cost of replacement) and liability. Liability is important: do NOT sign up for minimum coverage. Liability pays the bills if you are in an accident and someone is hurt. Adequate liability insurance is twice the amount (and maybe more) of your net worth. People with really high net worth get umbrella insurance, in case you exhaust your liability.
Rental - Get it. It allows you to choose between replacement cost and actual cash value. Choose the replacement cost. Also, get liability: if your dog bites someone, you can get sued.
Health Insurance
If you lack access to insurance through your employer, you can get an exchange plan.
Four varieties: Bronze, silver, gold, platinum.
Subsidies depend on your calendar-year income.
No plan guarantees you are fully protected.
Health-related debt is one of the leading causes of bankruptcy. The majority of people who had to declare bankruptcy had health insurance when they were ill.
-Comparison shop every year
- Do your homework to ensure your plan includes the doctors and hospitals important to you.
Double-check with your doctor and hospital that they participate in the plan :)
Longevity annuities are great if it is a fixed annuity. Make sure you get a low-cost annuity (eg, Vanguard or TIAA-CREF).
Keep an emergency fund.
***
The government is your last-resort insurance. Social Security it a government program. So is Medicare. Student loans come from the government, and unemployment insurance. Mortgage deductions on your income taxes are a result of federal government largess.
Almost all of us have, at some point in our lives, relied on the government for services so we can get by or make our situations better.
The truth is that our financial lives as we know them would be much harder and more precarious without the benefit of government social programs.
Without Social Security, almost half of elderly Americans would probably live in poverty. It's the largest pension and protection most of us will ever see.
Speak up. When someone decries Social Security as a Ponzi scheme, remind him or her that many elderly would lead much poorer lives w/o it. When you hear someone say that government should keep its mitts off Medicare, speak up and say it is a government program.
Acting together, we can protect one another against financial and health risks that would crush any one of us, were we forced to face them unassisted.
We must take care of ourselves and our immediate families through planning, saving and investing. When we do that, we are in a better place. However, we must take care of the rest of our citizens, too. That's the best way to ensure that all the new changes we've adopted have the best chance for success.
The only defense against the onslaught of information and the warp speed at which we're expected to process it is still good old-fashioned simplicity and common sense.
Subaccounts for your main bank account:
1. Savings
2. Vacation
3. Emergency fund/rainy day
4. House
5. Taxes
Don't prioritize emergency savings over credit card debt. Pay off your credit card first!
Secret to our grandparents' financial discipline:
- Lack of access to credit
- Layaway plans
- Loved ones (reality test)
- Loan sharks (most people sensibly avoided them)
Rank your debt; pay down the bill with the highest interest rate first.
Figure of the difference between IRAs, Roth IRAs, and SEP-IRAs
Traditional IRA - (they're like the original 401(k) plan ;) You can put up to $5500, and another $1K if over 50 yrs. Immediate tax deduction, money grows tax-free; withdrawals taxes as earner income.
SEP-IRA - If you operate your own business, you can contribute 25% of self-employment income, up to a high limit (in 2015, it was $53K)
Roth IRA - No immediate deduction; money is contributed after-tax; generally never taxed again.
NEVER take money from a retirement account unless you are out of options.
Warren Buffett: Invest in index funds (like a very low-cost S&P 500 index fund).
Beware of fees.
Demand that your financial advisor be a Fiduciary (looking out for you). Not all are.
Check with the Certified Financial Planner (CFP) Board
Fee-only advisor: National Association of Personal Financial Advisors (NAPFA)
If you can buy disability insurance, do it. According to the Council for Disability Awareness, 1 in 4 20-year-olds will be disabled before they reach retirement age.
Insurance: Rental, Homeowner, and Auto
Home - protect your net worth (not pick up cost of every repair bill)
Go for high-deductible options. You won't use this insurance unless very unlucky.
Car - protect against collision (covers blue book value - not actual cost of replacement) and liability. Liability is important: do NOT sign up for minimum coverage. Liability pays the bills if you are in an accident and someone is hurt. Adequate liability insurance is twice the amount (and maybe more) of your net worth. People with really high net worth get umbrella insurance, in case you exhaust your liability.
Rental - Get it. It allows you to choose between replacement cost and actual cash value. Choose the replacement cost. Also, get liability: if your dog bites someone, you can get sued.
Health Insurance
If you lack access to insurance through your employer, you can get an exchange plan.
Four varieties: Bronze, silver, gold, platinum.
Subsidies depend on your calendar-year income.
No plan guarantees you are fully protected.
Health-related debt is one of the leading causes of bankruptcy. The majority of people who had to declare bankruptcy had health insurance when they were ill.
-Comparison shop every year
- Do your homework to ensure your plan includes the doctors and hospitals important to you.
Double-check with your doctor and hospital that they participate in the plan :)
Longevity annuities are great if it is a fixed annuity. Make sure you get a low-cost annuity (eg, Vanguard or TIAA-CREF).
Keep an emergency fund.
***
The government is your last-resort insurance. Social Security it a government program. So is Medicare. Student loans come from the government, and unemployment insurance. Mortgage deductions on your income taxes are a result of federal government largess.
Almost all of us have, at some point in our lives, relied on the government for services so we can get by or make our situations better.
The truth is that our financial lives as we know them would be much harder and more precarious without the benefit of government social programs.
Without Social Security, almost half of elderly Americans would probably live in poverty. It's the largest pension and protection most of us will ever see.
Speak up. When someone decries Social Security as a Ponzi scheme, remind him or her that many elderly would lead much poorer lives w/o it. When you hear someone say that government should keep its mitts off Medicare, speak up and say it is a government program.
Acting together, we can protect one another against financial and health risks that would crush any one of us, were we forced to face them unassisted.
We must take care of ourselves and our immediate families through planning, saving and investing. When we do that, we are in a better place. However, we must take care of the rest of our citizens, too. That's the best way to ensure that all the new changes we've adopted have the best chance for success.
The only defense against the onslaught of information and the warp speed at which we're expected to process it is still good old-fashioned simplicity and common sense.
January 14, 2016
Simple and sane advice on personal finances.
June 26, 2019
The less you know about sound money management, the more valuable this book will prove to be. Literally. Very few people, regardless of income level, understand every aspect that contributes to maximizing (or jeopardizing) one's financial health. Perhaps more important, avoiding the numerous pitfalls which dot the road to a secure retirement takes time, attention, care, and commitment.
While there is a lot of good, general advice that is applicable to everyone, some is specific to the American codes governing savings and investment options in the US. There has also been rapid change in certain industries (housing/mortgage, insurance, and Social Security) so a few updates are needed. However all of the basic education absolutely applies.
I had both the physical hardback and the audiobook, working through both during a recent road trip. They are not the same experience at all, with the audiobook being quite inferior despite being read by both authors.
Content: 4.5
Book: 4
Audiobook: 2
While there is a lot of good, general advice that is applicable to everyone, some is specific to the American codes governing savings and investment options in the US. There has also been rapid change in certain industries (housing/mortgage, insurance, and Social Security) so a few updates are needed. However all of the basic education absolutely applies.
I had both the physical hardback and the audiobook, working through both during a recent road trip. They are not the same experience at all, with the audiobook being quite inferior despite being read by both authors.
Content: 4.5
Book: 4
Audiobook: 2
February 10, 2018
Simple advice that's easy to follow. Most of the tips are about personal responsibility and self-education. I was shocked by the statistics of people who do not follow common sense steps like taking their time to shop around for the lowest mortgage, or not paying off their principle on their credit cards. The trick is to save money, to find the best deals, to protect your best assets and to pay off the highest interest first.
The most sound advice was paying off your credit card as quickly as possible and take advantage of your employer matching retirement programs because it's basically free money. It was powerful when it captured the figures for compound interest. How a 25 year old could save 200,000 dollars by putting away only a little money each paycheck and how employers can help you save without conscious effort by putting part of your paycheck in a savings account.
The one chapter that seemed to phone it in a little bit was the financial advisor chapter. Basically, it said to find a fiduciary who puts your needs above their own. Makes sense and the book was right about finding someone who gives objective advice instead of only looking for their own commission, but it was also something not a lot of people can relate to. I am in no position to find an advisor and pay whatever they ask for objective advice. I can barely afford an etrade account. So yes it was right but it was probably the least helpful part of the book.
The most sound advice was paying off your credit card as quickly as possible and take advantage of your employer matching retirement programs because it's basically free money. It was powerful when it captured the figures for compound interest. How a 25 year old could save 200,000 dollars by putting away only a little money each paycheck and how employers can help you save without conscious effort by putting part of your paycheck in a savings account.
The one chapter that seemed to phone it in a little bit was the financial advisor chapter. Basically, it said to find a fiduciary who puts your needs above their own. Makes sense and the book was right about finding someone who gives objective advice instead of only looking for their own commission, but it was also something not a lot of people can relate to. I am in no position to find an advisor and pay whatever they ask for objective advice. I can barely afford an etrade account. So yes it was right but it was probably the least helpful part of the book.
June 9, 2019
Good intro to personal finance that I recommend to any beginners. The whole premise is that all you need to know about personal finance fits on an index card, which I can agree with. There are a couple of things I don't quite agree with though. One, is that it isn't good to roll your 401(k) over to an IRA when you leave your job. I can understand their concerns, but I think it's better to move it to a low-fee company and choose your funds. Secondly, they didn't like target date funds. I once again understand their concerns, but I think the Vanguard option is a very good one for people that simply do not want to put in any more effort. It's cheaper than a robo-advisor and is a well-diversified, hands off approach.
April 30, 2016
This was a very readable book. I have been told many times by different people to try Dave Ramsay's Total money makeover because it's really good and works, but I was always skeptical because I knew that everything was pretty heavily religious and I am not. I finally decided to try it and I was not wrong. I couldn't even get out of the introduction. It was so preachy and then boring on top of that. This was exactly the opposite. It had NO religious aspect, it was short and to the point and the anecdotes were just enough to make it personable and relate-able. I also appreciated the fact that the book isn't full of admonishments. Take for example the first rule: save 10-20 percent of your gross income. To some, that might sound like a lot and not doable. But instead of just telling you to either figure it out or telling you you'll never succeed if you don't they very much tell you that it's ok to start anywhere, even as small as 1 percent as long as you try.
Read
January 7, 2021This one is a short & quick read that provides some good information. I'm currently on a finance journey and there are a number of things in here that I liked/learned about investing. Glad I read this one!!!!
July 9, 2018
I've now read a few of these financial advice books, but Helane and Harold's is among the best. I think many people feel overwhelmed when thinking about personal finance, and it's not always an easy thing emotionally or even logistically to deal with.
What I appreciate the most about this book is that the authors spend time acknowledging what few other personal finance books will: that our policies have limited what the poor and middle class really have power over when it comes to our personal finances. Wages have stagnated over time. Inequality is at its highest. If you're poor or middle class, you actually have very little you can do to keep your head above water. Most personal finance books treat debt or the lack of resources for those not at the top of the income distribution ladder as a personal failing; hinting that if you were just a little more disciplined, you might not be facing poverty in your old age or mountains of debt. The authors point out that that is, quite frankly, bunk.
But as much as the policies are rigged against the ordinary, Helaine and Harold lay out clearly what you can do. You can max out your 401K contribution. This is something I wish I'd known earlier in life, but am trying to do my best on now. You can have a Roth IRA. You can make a well-grounded decision about renting versus buying (buying a house may not actually be the best decision!). You can pay your credit card balance in full every month. You can pay attention to fees. You can take advantage of 529s.
These are all things Pollak wrote on his infamous index card but the book really walks you through it in a clear way.
Between this book and the personal finance book Elizabeth Warren wrote with her daughter, these are basically all the tools you need to take care of your own finances. What to do about the policies that create the stress of personal finance are another matter entirely.
What I appreciate the most about this book is that the authors spend time acknowledging what few other personal finance books will: that our policies have limited what the poor and middle class really have power over when it comes to our personal finances. Wages have stagnated over time. Inequality is at its highest. If you're poor or middle class, you actually have very little you can do to keep your head above water. Most personal finance books treat debt or the lack of resources for those not at the top of the income distribution ladder as a personal failing; hinting that if you were just a little more disciplined, you might not be facing poverty in your old age or mountains of debt. The authors point out that that is, quite frankly, bunk.
But as much as the policies are rigged against the ordinary, Helaine and Harold lay out clearly what you can do. You can max out your 401K contribution. This is something I wish I'd known earlier in life, but am trying to do my best on now. You can have a Roth IRA. You can make a well-grounded decision about renting versus buying (buying a house may not actually be the best decision!). You can pay your credit card balance in full every month. You can pay attention to fees. You can take advantage of 529s.
These are all things Pollak wrote on his infamous index card but the book really walks you through it in a clear way.
Between this book and the personal finance book Elizabeth Warren wrote with her daughter, these are basically all the tools you need to take care of your own finances. What to do about the policies that create the stress of personal finance are another matter entirely.
May 31, 2018
Straight forward, simple advice that will reap the average individual a solid financial future.
Although numerous personal finance books are published each year, there are precious few classics that reliably explain personal financial strategy in a way that is easy to follow for even the least educated investor. This leads many people to follow the advice of popular gurus like Dave Ramsey, Suze Orman, and David Bach.
While some of the advice these experts provide is great, it usually fails dismally when it comes to extremely basic concepts, like how to invest, and with whom (sadly, most financial advice given to middle class people steers them towards expensive, actively managed mutual funds and to personal financial advisors/salespeople who aren't working in their client's best interest).
Thankfully, "The Index Card" avoids these flaws while providing solid, mostly timeless advice. This is the financial book I would recommend to my mom and to anyone else who is even SLIGHTLY unsure about their financial plan. Although I may have a quibble here or there, it's over matters so esoteric that they do not affect all but the most sophisticated investors.
If you want to pay off debt, save for retirement, buy a home, or research finding a personal finance professional who can help you with all of that, read this book first! It will likely save you a lot of money and heartache (the bare bones advice on seeking out a financial professional who operates under a fiduciary standard is valuable on its own). I would absolutely recommend this book as a superior alternative to Dave Ramsey's "Total Money Makeover" and an excellent companion to Dave Chilton's "The Wealthy Barber." The only disappointing part about this book is that it doesn't come with a time machine!
Although numerous personal finance books are published each year, there are precious few classics that reliably explain personal financial strategy in a way that is easy to follow for even the least educated investor. This leads many people to follow the advice of popular gurus like Dave Ramsey, Suze Orman, and David Bach.
While some of the advice these experts provide is great, it usually fails dismally when it comes to extremely basic concepts, like how to invest, and with whom (sadly, most financial advice given to middle class people steers them towards expensive, actively managed mutual funds and to personal financial advisors/salespeople who aren't working in their client's best interest).
Thankfully, "The Index Card" avoids these flaws while providing solid, mostly timeless advice. This is the financial book I would recommend to my mom and to anyone else who is even SLIGHTLY unsure about their financial plan. Although I may have a quibble here or there, it's over matters so esoteric that they do not affect all but the most sophisticated investors.
If you want to pay off debt, save for retirement, buy a home, or research finding a personal finance professional who can help you with all of that, read this book first! It will likely save you a lot of money and heartache (the bare bones advice on seeking out a financial professional who operates under a fiduciary standard is valuable on its own). I would absolutely recommend this book as a superior alternative to Dave Ramsey's "Total Money Makeover" and an excellent companion to Dave Chilton's "The Wealthy Barber." The only disappointing part about this book is that it doesn't come with a time machine!
March 3, 2016
Wow. This little book packs a punch!
I admit I breezed through the first few chapters. Yes, emergency fund. Of course pay your credit in full. Yep yep, maximize employer contribution... and then I hit the Rule #5: Buy Inexpensive, Well-Diversified Indexed Mutual Funds" and I thought, hang on. What are my investments? I dug the dusty paperwork off and my heart sank. All actively managed mutual funds. Crap. I need to call my financial guy.
Then I hit #6: Make Your Financial Advisor Commit to the Fiduciary Standard and I thought I was going to start crying on the train. I went to the free dinner. My financial advisor has sent me birthday and holiday cards. But he's not my friend, and he sure isn't working in my best interests. (He's not a bad person, he's just trying to do his job!)
I took so many notes from this book! The original index card (which has been slightly modified) can be found on the NPR story that led me to this book. It does have very easy to understand and digestable information. The authors are quick to point out their own personal stories. It's one of the best written and most relatable books on finances I've read, and I highly recommend it.
http://www.npr.org/sections/alltechco...
I admit I breezed through the first few chapters. Yes, emergency fund. Of course pay your credit in full. Yep yep, maximize employer contribution... and then I hit the Rule #5: Buy Inexpensive, Well-Diversified Indexed Mutual Funds" and I thought, hang on. What are my investments? I dug the dusty paperwork off and my heart sank. All actively managed mutual funds. Crap. I need to call my financial guy.
Then I hit #6: Make Your Financial Advisor Commit to the Fiduciary Standard and I thought I was going to start crying on the train. I went to the free dinner. My financial advisor has sent me birthday and holiday cards. But he's not my friend, and he sure isn't working in my best interests. (He's not a bad person, he's just trying to do his job!)
I took so many notes from this book! The original index card (which has been slightly modified) can be found on the NPR story that led me to this book. It does have very easy to understand and digestable information. The authors are quick to point out their own personal stories. It's one of the best written and most relatable books on finances I've read, and I highly recommend it.
http://www.npr.org/sections/alltechco...
February 24, 2018
Solid, basic financial advice.
Some good tips (think of personal finance like weights - start small, incremental improvements).
Maybe a bit too American for an Australian audience.
____
Update 24/02/18
Upgraded this from 3 to 4 stars.
Incredibly basic, but I did get quite a bit of personal benefit from implementing these:
RULE #1: Strive to Save 10 to 20 Percent of Your Income
Save 10-20% or more.
Steps:
1) Monitor your spending (in detail for 3 months)
2) Confront your spending
3) Refine your expenses over time
4) Create a plan
5) Be sure to leave room for fun
Set money aside for an emergency
Set up an automatic savings plan.
Start by lifting 1-pound weights.
Side-note: I love all the negative reviews because so many Americans think any form of social security is a Ponzi scheme. Can you say fuckwit on Goodreads?
Some good tips (think of personal finance like weights - start small, incremental improvements).
Maybe a bit too American for an Australian audience.
____
Update 24/02/18
Upgraded this from 3 to 4 stars.
Incredibly basic, but I did get quite a bit of personal benefit from implementing these:
RULE #1: Strive to Save 10 to 20 Percent of Your Income
Save 10-20% or more.
Steps:
1) Monitor your spending (in detail for 3 months)
2) Confront your spending
3) Refine your expenses over time
4) Create a plan
5) Be sure to leave room for fun
Set money aside for an emergency
Set up an automatic savings plan.
Start by lifting 1-pound weights.
Side-note: I love all the negative reviews because so many Americans think any form of social security is a Ponzi scheme. Can you say fuckwit on Goodreads?
September 28, 2018
I don’t often read non-fiction/self-help type books, but this one came highly recommended. After all, who couldn’t use a little bit of advice about money?
This book was well-done! Simplistic but not pandering. It explained words that you might not know the exact meaning of (like fiduciary), but it didn’t dumb things down. I enjoyed it! You know, for a book about finances.
It was included in an article as a good book for women who want to take control of their finances. But the book is for anyone.
This book was well-done! Simplistic but not pandering. It explained words that you might not know the exact meaning of (like fiduciary), but it didn’t dumb things down. I enjoyed it! You know, for a book about finances.
It was included in an article as a good book for women who want to take control of their finances. But the book is for anyone.
May 30, 2016
Simple, practical easy advice. A quick read; well written and engaging. Would be a great college graduation gift. I was particularly impressed with the last chapter focused on being supportive of the social net hat our government provides, and the stark truth that 96% of us use it. Important words in this "me-centric" age.
January 25, 2019
So normally if I heard a book was based on a viral Internet post I would screech and begin lashing out but this was pretty good. It is easy to lecture about thrift and prudence but the personal finance industry is designed in a lab to steal from you. So the book holds your hand and walks you through what prudence would really mean. It's important to emphasize that your bank (etc) will not tell you. Even if you just picked the most conservative-seeming options available at every turn and avoided most debt you could be piling on tens of thousands of fees and such over your lifetime.
The authors present strong opinions on what you should be looking at but don't do all the work for you. For example, the discussion of mortgages versus renting bounces between the different factors at play and doesn't just say "buy now!" or "rent forever!" - there are real trade-offs and risks. The obvious issue is that this sort of advice is most useful to someone who could even think of owning a home someday. And if you're stuck paying off credit cards for a while then worrying about your portfolio diversification might sound wild. What I've found though is that the same principles really do apply no matter how bad you're at now, even if you may have to do more work to find the equivalent for your situation. And your situation might change and it's helpful to be prepared for that. Anyway I read this in one sitting since it's a breeze, good times.
The authors present strong opinions on what you should be looking at but don't do all the work for you. For example, the discussion of mortgages versus renting bounces between the different factors at play and doesn't just say "buy now!" or "rent forever!" - there are real trade-offs and risks. The obvious issue is that this sort of advice is most useful to someone who could even think of owning a home someday. And if you're stuck paying off credit cards for a while then worrying about your portfolio diversification might sound wild. What I've found though is that the same principles really do apply no matter how bad you're at now, even if you may have to do more work to find the equivalent for your situation. And your situation might change and it's helpful to be prepared for that. Anyway I read this in one sitting since it's a breeze, good times.
September 8, 2021
Very simplified and compact book about personal finance. I have heard or read many of these ideas before, but it is great to have them all together with simple explanations for why and how to do it. The financial world has so many buzz words, very nice to see someone distill it and explain things in everyday language.
I have been following most of these steps for most of my life, and I can attest that these steps can and will help you stay on track and meet your goals.
The book gives clear examples and helpful tips on how to achieve each of these steps, and explains the step and why you should do it.
To be clear this is not a get rich quick, this is slow and steady, but the recommendations are common sense and do work. All of the recommendations can fit on an index card, hence the name.
You can Google the Index Card so here they are
I have been following most of these steps for most of my life, and I can attest that these steps can and will help you stay on track and meet your goals.
The book gives clear examples and helpful tips on how to achieve each of these steps, and explains the step and why you should do it.
To be clear this is not a get rich quick, this is slow and steady, but the recommendations are common sense and do work. All of the recommendations can fit on an index card, hence the name.
You can Google the Index Card so here they are
Rule #1 Strive to save 10 to 20 percent of your gross income
Rule #2 Pay your credit card balance in full every month
Rule #3 Max your 401(k) and other Tax-Advantaged savings accounts
Rule #4 Never buy or sell individual stocks
Rule #5 Buy inexpensive, well-diversified Indexed Mutual Funds and Exchange-Traded funds
Rule #6 Make your financial advisor commit to the Fiduciary Standard
Rule #7 Buy a home when you are financially ready
Rule #8 Insurance - Make sure you are protected
Rule #9 Do what you can to support the Social Safety Net
Rule #10 Remember the Index Card
May 2, 2018
Lately I've been interested in personal finance and, like many people, in trying to figure out how "to make my money work for me." I never learned anything about investing in school, and in light of the market downturn, Bitcoin craze, and personal events in my own life, I've been trying to make sense of money. How should I invest, given my age, income, and future prospects? What does diversification mean, and why is it important? Why should I be wary of financial advisors but also seek their guidance? Finding clear answers is like searching for signals within a loud and dissonant landscape.
Until I came across this book, whose premise is that everything you need to known be written on an index card because — surprise! — it's not really that complicated. To be clear: This book is not a get-rich-quick scheme. Its purpose is to guide readers in using their money responsibly.
I plowed through this book in two days because it's so readable, clear, and insightful. This should be required reading in high school and college, regardless of interests or major. Highly recommend for anyone looking to make sense of personal finance, especially folks in their early/mid-twenties.
Until I came across this book, whose premise is that everything you need to known be written on an index card because — surprise! — it's not really that complicated. To be clear: This book is not a get-rich-quick scheme. Its purpose is to guide readers in using their money responsibly.
I plowed through this book in two days because it's so readable, clear, and insightful. This should be required reading in high school and college, regardless of interests or major. Highly recommend for anyone looking to make sense of personal finance, especially folks in their early/mid-twenties.
December 13, 2018
Things I loved about this book:
Good financial advice from someone who is fundamentally suspicious of the financial services industry and conspicuous consumption, in general. SO MANY finance books are written for people who want to get rich, or beat the market. This is a great book for regular people who want to incorporate responsible financial habits into their lives so they can retire and take care of their families. That’s it.
I also love that the book kicks off by talking about how people who struggle financially month to month are not bad people. Juggling finances can be hard, and finding it difficult does not make you a mad person. What a concept!!
Things I did not love:
Some people genuinely do benefit from seeing financial services professionals. This book is a little harsh against this point.
All in all, good advice. However, if you read the original index card and basically understand all the concepts and follow them, you may not stand to benefit much more since you’re probably already doing well.
Good financial advice from someone who is fundamentally suspicious of the financial services industry and conspicuous consumption, in general. SO MANY finance books are written for people who want to get rich, or beat the market. This is a great book for regular people who want to incorporate responsible financial habits into their lives so they can retire and take care of their families. That’s it.
I also love that the book kicks off by talking about how people who struggle financially month to month are not bad people. Juggling finances can be hard, and finding it difficult does not make you a mad person. What a concept!!
Things I did not love:
Some people genuinely do benefit from seeing financial services professionals. This book is a little harsh against this point.
All in all, good advice. However, if you read the original index card and basically understand all the concepts and follow them, you may not stand to benefit much more since you’re probably already doing well.
November 3, 2017
I'm learning about personal finance and thought this was a really great starting book. It's based off this index card (that went viral, I apparently missed it lol) that everything you really need to know about personal finance can fit on an index card. They go through the card in more depth in the book. I personally really love the chapters about insurance and fiduciaries. I learned quite a bit from this book and it is really well paced and is not confusing to understand. ~Ashley
December 31, 2020
I liked this book. The bones of great financial advice...like from 2 good friends. I will reread the section on insurance (rule 8?) cause that is the section I can not get in control. The financial advice was very direct. Boundaries on risky behavior and advantage taking from brokers. Highly recommend to any young person, or those who are intimidated by finances. I feel like an educated boss bitch now.
September 11, 2017
This is a great introduction to personal finance as well as a great review. My husband and I had some great discussions as we read this book together and made a few changes because of it. Most of these things are pretty basic, and everyone should understand them, but for some reason a lot of society just doesn't know them. It's a pretty easy, quick read so you should give it a try.
February 13, 2018
Personal financial planning is the difference between a sound future and a deferred retirement. But the good news is that a few simple rules can de-stress your relationship to money and get your financial life in order. By planning early and often, you can get out of debt and ensure yourself a comfortable retirement.
October 19, 2019
Very basic, encouraging personal finance book that avoided the moralism you find all over the place in personal finance. I really appreciated the way the authors repeatedly acknowledged that we're all sort of stuck in a rigged game, but still gave their best advice for achieving a positive outcome. All while reminding the reader that your life should be more than your financial life.
April 10, 2023
ReedIII Quick Review: Delightful simple usable universal personal finance advice that fits on an index card. The explanations of core ideas were good however the included exposition seemed unnecessary and counter to the basic principles of simplicity. The index card take-away is mostly brilliant.
August 10, 2018
This was the first financial book I've ever read and it was very helpful, clear information and specific strategies. I have a lot more to learn but this was an excellent way to get started. It's well written, short and sweet and to the point. I have already recommended it to several friends.
October 25, 2017
Simple, straightforward, clean. Recommended.
March 6, 2018
Really great advice, written in a way that's easy to digest.
January 14, 2020
Short great book on your basic fiscal responsibility
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