Wednesday, July 19, 2017

The Index Card-9 Rules of Personal Finance

Back in 2013 Harold Pollack, a social scientist at the U of Chicago, while interviewing a UK personal finance writer, Helaine Olen, struck upon an idea that all the Personal Finance advise you ever need could be written down on an index card.
After blogging about this idea, and getting requests from readers, he actually set down his 9 rules for Personal Finance on a 4 x 6 inch card.

The article I read about this can be found HERE.

This has proved so popular that he and Olen have collaborated on a book called The Index Card: Why Personal Finance Doesn't Have to Be Complicated which came out earlier this year.  I guess personal finance wasn't as simple as listing 9 points on an index card after all, since they seemed to need to explain/elaborate a full book's worth of information.  ;-)

Here are the original tips Pollack wrote out--
1. Max your 401(k) or equivalent employee contribution.
2. Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20xx funds.
3. Never buy or sell an individual security. The person on the other side of the table knows more than you do about this stuff.
4. Save 20% of your money.
5. Pay your credit card balance in full every month.
6. Maximize tax-advantaged savings vehicles like Roth, SEP and 529 accounts.
7. Pay attention to fees. Avoid actively managed funds.
8. Make financial advisers commit to the fiduciary standard.
9. Promote social insurance programs to help people when things go wrong.

So what do you think of these rules?



  1. I consider the book to be the midrash of the card. Thanks for noticing my work.

  2. Yes, yes and yes. Sadly, a little too complex for the people who really need to hear these rules. And, the word "fiduciary" is a stretch. I can hear their eyes glazing over at that one. I would simplify it more: Put your extra money in the bank, and don't spend it. And, if you don't have extra money, quit buying stuff you don't need.
    They won't listen, though. And, if they're not going to listen, why do they ask? And why am I so pissy today?
    Hey, safe travels. I will miss my coffee with Sluggy while you are gone. You make my day.
    Oh, and did you hear the Rite Aid Walgreen's deal has been severely limited? Our store manager told me. Maybe now he can start stocking more product.

  3. Well, I am sure they are great if you have someone that will match your 401k and you make more than just exist. The one thing we did was save 20% of Hub's income and that was HARD!

  4. I agree with all, even the ones I do not understand so well, and have not mastered. I'd give us a B. When folks say save 20% and max out 401 K etc., does that 20% include the 401K etc. or do you think they mean cash? With pretax, we are well over 35%, but cash long term savings, isn't near 20%, plus we have earmarked some of the cash for shorter term needs/ wants.


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