A few years back, a professor at the University of Chicago named Harold Pollack did a video chat with finance columnist Helaine Olen. The topic of their chat was why its hard to find good financial advice.
Pollack said that the best financial advice can fit on a 3×5 index card, and is available at your local library. Most of the time people don’t get good advice because the wealth management industry has a financial interest in keeping you in the dark.
For those of us that believe in simplicity, let’s take a look at these 9 pieces of financial advice Pollack wrote down.
9 Pieces of Financial Advice
- Your 401(k) should be maxed out. If you’re unable to put in that much money; then at least put in enough to get the free money the company is giving you. Company matching helps your 401(k) grow a lot faster.
- Purchase inexpensive Target Date and Mutual Funds. When well diversified, losses in one or two industries want destroy all of your gains.
- Keep away from individual stocks and securities. If you put all your eggs in one basket, you take a big risk of losing everything if something goes wrong with the company. Besides, the person on the other side knows way more than you do.
- It’s a safe bet to save 20% of your pay, if you can’t at least save 10%.
- Never keep a credit card balance. At the end of each month, pay the entire balance in full.
- Use a Roth, SEP and 5232 accounts to maximize your tax advantaged savings. At retirement this can make a big difference in your way of life.
- Fees can be high or low when it comes to investment, so pay attention to them. Avoid managed funds and give index funds a try.
- There are standards set for certified Financial Advisors ensure that they uphold those standards on your behalf.
- Many things can happen in your life making you unable to work, so support social insurance. One day your turn will come to benefit from it.
These 9 pieces of financial advice can be very helpful in your personal financial life if you use the. You have the opportunity to make good or bad choices when it comes to money. Get the best information possible and make the best choices for the future you want to see.
If you enjoyed this article. Here are a few more books which should point you in the right direction.
Jane Bryant Quinn’s Making the Most of Your Money. Quinn is an under-rated but excellent personal finance advocate. This book will help you make smart money choices.
The Motley Fool Guide to Investing for Beginners, by Tom and David Gardner, is the perfect read for beginning investors. You can also get even more tips from their newsletter.
Your Money or Your Life by Vicki Robin. Like the 9 pieces of advice above she gives you 9 steps to transform your financial life.