The Personal Finance Index Card: Book Version Differences

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After rediscovering the young adult versions of fitting personal finance advice on an index card, I decided to go back and read the book The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack. (I was able to find it via library eBook.)

I noticed that the book version of the “index card” was slightly different. The original card had 9 items, but two of them were merged away into each other (401k/IRAs) and (Pay Attention to Fees/Buy Index Funds). I bolded the new additions below. (You can see all chapters on the Amazon page.)

  1. Strive to Save 10 to 20 Percent of Your Income
  2. Pay Your Credit Card Balance in Full Every Month
  3. Max Out Your 401(k) and Other Tax-Advantaged Savings Accounts
  4. Never Buy or Sell Individual Stocks
  5. Buy Inexpensive, Well-Diversified Indexed Mutual Funds and ETFs
  6. Make Your Financial Advisor Commit To a Fiduciary Standard
  7. Buy a Home When You Are Financially Ready
  8. Insurance – Make Sure You’re Protected
  9. Do What You Can To Support the Social Safety Net
  10. Remember The Index Card

Here again is the original:

Here are my notes on the newly-addressed topics of home-buying and insurance.

Home-buying. This will always be a hard topic because it mixes in emotion, personal history, peer pressure, and all that fuzzy stuff. If you want to own a home, you need to make sure the purchase won’t blow up your overall financial picture. Nothing really surprising, but still good advice.

  • Get your debt under control first.
  • Save up as close to a 20% down payment as you can.
  • Stick with a 15 or 30 year fixed-rate mortgage.
  • Prioritize what you really want and need in a home. Stay within your budget.
  • Location, location, location.

Insurance. There are low-probability events that can destroy decades of hard work, and that’s why humans invented insurance to spread the risk. Here are their cut-to-the-chase bullet points:

  • Emergency fund – Maintain one!
  • Life insurance – If you’re young(ish), just buy 30-year level term insurance.
  • Property insurance – Raise your deductible as high as you can handle.
  • Health insurance – Always sure you stay in-network.
  • Liability insurance – Coverage for at least twice your net worth.

I’m glad that this book still retained its “quick-and-dirty” nature. No single rule will cover every scenario, but it’s good to have a clear and concise collection of the big points along with just enough explanation that you understand the basic reasoning behind it.

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  1. Support “the Social Safety Net”
    If you’re referring to government run social services… they’re a disaster and certainly the worst use of money imaginable.
    Social safety net should be people helping out their neighbors, friends and coworkers. Not a giant government bureaucracy that has a -50% lifetime return rate.

  2. The Objective One says

    Roger makes a solid point. Government-run social programs are financially questionable at best. It seems the creator of the list perhaps let some virtue signaling leak into an otherwise financially sound group of suggestions.

  3. “Do What You Can To Support the Social Safety Net” is an odd inclusion, and seems somewhat political. For the most part it is mandatory that we pay into Soc Sec, Medicare, etc.. So are they asking us to vote for more social programs, or what is it they are advising? Just seems out of place here.

    • Why do I suspect all three of the above posters, accusing the use of the phrase “social safety net”, think of themselves as good Christians nonetheless?

  4. I think insurance is a big hole for a lot of people. I’ve worked in insurance for years and seen just about every “it can’t happen” event actually happen. I’d also add to your list “redundancy” or losing your job. There is insurance that can cover that as well.

  5. Question about the “Strive to Save 10 to 20 Percent of Your Income”. Is this inclusive of what you are investing in retirement (401k or 403b)? Or is this in addition to those investments? Thanks for your help.

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