The Index Card: Why Personal Finance Doesn’t Have to Be Complicated

Personal finance really doesn’t need to be difficult. Too many finance books and websites fail to highlight this and make things unnecessarily complicated. In The Index Card: Why Personal Finance Doesn’t Have to Be Complicated, Olen and Pollack do a great job of laying out the basics as simply as possible.

Ironically, the premise of the book is that you only need an index card to cover the important points – not a whole book. It’s a relatively short and easy read though, and does a good job of value-adding to the concepts without dragging things out. If you have the time, I recommended buying the book and reading through in full – if you’re time poor, then just read the summary below!

The 10 key personal finance points:

  1. Save 10-20% of your income
  2. Pay off your credit cards in full every month (and minimise other debt)
  3. Maximise your tax-advantaged savings accounts (e.g. 401(k), superannuation)
  4. Don’t trade individual stocks
  5. Buy inexpensive diversified indexed mutual funds and exchange-traded funds (ETFs)
  6. Hire a fee-based fiduciary (avoid commission-based financial salespeople)
  7. Only buy a home that you can afford
  8. Buy term life insurance, car insurance , home insurance, renter’s insurance and disability insurance
  9. Support the social safety net (Social Security, Medicare, Medicaid etc.)
  10. Keep doing the first 9 points!

Importantly, this book is written primarily for a US audience and thus some points will be less applicable to readers elsewhere. The general principles are the same though!



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