What happens next Where's my refund? Best CD rates this month Shop and save 🤑
MONEY
Retirement

A financial plan on an index card

Morgan Housel, The Motley Fool
A card and a pen can help put you on the right track.

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:

  • Work in a job that genuinely excites you when you wake up in the morning.
  • Make sure your material aspirations grow slower than your income. It's the only way to accumulate wealth.
  • Pay no attention to the Jonses. They're crying inside.
  • Avoid debt even if you can afford it. It takes away options, which is your most valuable asset.
  • Save enough of your income so you can retire at the age your dad started complaining about his back hurting. You won't want to work after that.
  • Invest in diverse portfolio of stocks, with the intention of staying invested for decades.
  • Dollar cost average for your entire life and you won't care what the market's doing.
  • Have enough cash to ensure you're never forced to sell stocks at inopportune times.
  • When in doubt, choose the investment with the lowest fee.
  • Check your brokerage account as infrequently as it takes to prevent rash decisions.
  • Accept that the future will play out differently than you think it will.

Everything else is details.

For more:

Find this article informative? 
The Motley Fool's mission is to help the world invest, better. We have done this over the past 20 years by thinking long term and outside the box. To learn more about what The Motley Fool thinks about current investment trends, and receive a special free report about what might be the next big industry to come out of Silicon Valley, just click here now.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

 

America in 2017: Warren Buffett's Ignored Warning

Warren Buffett is perhaps the greatest investor of all time, so when the billionaire issues a warning, it pays to listen.

But unfortunately, nearly 4 in 5 Americans are ignoring Buffett's words of widsom. Click here to learn more.

Featured Weekly Ad