- Thomas M.
- Wednesday, January 04, 2023
The Financial Literacy book review series #FinLit recommends thought-provoking books about money, investing, and personal finance. This post is about The Index Card by Helaine Olen and Harold Pollack.
There is a two-word phrase you have to get used to whenever you ask a financial advisor for advice: "It depends." Everyone's situation is different! Even two clients living identical lives may not be as responsible or able to handle risk as the other.
However, personal finance itself is not too complex to understand. What if the rules of thumb could be simplified and fit on an index card? That is exactly what this book does, right down to providing a copy of the index card and using the rest of the pages to go into the details. The book got its start after an interview between authors Olen and Pollack. Pollack claimed the best financial advice was simple, while the financial industry depended on seeming too complicated to understand. He wrote the advice he had in mind on an index card, shared a photo of it, and it went viral.
The index card is also the book's table of contents, so have a look for yourself:
- Strive to save 10 to 20 percent of your income.
- Pay your credit card balance in full every month (and how to deal with other forms of debt).
- Max out your tax-advantaged savings accounts.
- Never buy or sell individual stocks.
- Buy inexpensive, well-diversified indexed mutual funds and exchange-traded funds.
- Make your financial advisor commit to the fiduciary standard.
- Buy a home when you are financially ready.
- Insurance -- make sure you're protected.
- Do what you can to support the social safety net.
- Remember the index card.
None of that advice is specifically endorsed here, but understanding each of those rules will give you a strong foundation in personal finance.
Thomas M. is a Certified Financial Education Instructor℠ (CFEI®) and has previously blogged about Financial Lessons That Can Backfire, Talking To Kids About Money, and Online Financial Literacy Library Resources.