Article Reviews, Personal Finance

Personal Finance Maxims

Read this New York Times article about Harold Pollack, a University of Chicago professor that wrote some maxims of personal finance onto an index card, and subsequently published a book Index Card: Why Personal Finance Doesn’t Have to Be Complicated. The original index card is found here.

The article compiled a number of other index cards written by columnists/authors in personal finance, shown below. I have also included one from Christine Benz (Morningstar).

Here are the common themes:

  • Save first
    • Automate savings, pay yourself 20% of your income first
    • Save and spend towards a goal
  • Maximize tax-advantaged and retirement accounts
    • 401(k), IRA, Roth, SEP, 529
  • Invest
    • Invest in low-cost, well-diversified index funds
  • Protect against the unexpected
    • Get term insurance, disability insurance
    • Make a will

Harold Pollack, University of Chicago professor in the School of Social Service Administration


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


  • Strive to save ten to twenty percent of your income
  • Pay your credit card bill in full every month and deal with other forms of debt
  • Max out your 401(k) and other tax-advantaged savings opportunities.
  • Never buy or sell individual stocks
  • Buy inexpensive, well-diversified indexed mutual funds and exchange-traded funds.
  • Make your financial advisor commit to a fiduciary standard.
  • Buy a home when you are financially ready.
  • Insurance – make sure you are protected
  • Do what you can to protect the social safety net to help people when things go wrong.

Carl Richards, New York Times contributor and Author of “The One-Page Financial Plan”

  • Why
    1. Time with family, mainly outside.
    2. Time to serve in the community.
  • What
    1. Fully fund retirement accounts
    2. Fund kids 529 accounts every year
    3. The rest of the $ goes to save for a house

Tara Siegel Bernand, New York Times personal finance reporter

  • Automate savings – downpayment, retirement, 529, even small goals like vacation. Then spend what you want
  • Index funds. Always index funds. Ignore the market, mostly. Rebalance
  • Retirement savings may not be linear. But aim for at least 10-15 percent of salary. Raise it 1 percentage point annually.
  • Do a ton of prep work before asking for a raise. If you’re a woman, do more.
  • Change the culture. Take all of your parental leave. Dads, too.
  • Work only with financial planners who have nothing to sell but their time. Must be a fiduciary.
  • Get term insurance, a will, have a money talk with your parents.
  • Before you vote, think about whether you’ll need Social Security.
  • Spend on experiences
  • Simplify

Jane Bryant Quinn, Author of “How to Make Your Money Last”

  • When you retire you’re finally free – but free to do what? Let go of who you were and focus on who you’ll become.
  • Right-size your life! Work out how much you can afford to spend when your paycheck stops.
  • You’re still a long-term investor with 25 or 30 years ahead. Keep buying stock-owning index mutual funds.

Christine Benz, Morningstar’s Director of Personal Finance and Author of “30-Minute Money Solutions”

  • Goal: To build a low-maintenance, low-cost, high-growth portfolio to fund retirement and shorter-term goals
  • Invest in low-cost mutual funds, both index and active, via 401(k)s, IRAs, and taxable accounts.
  • Favor equity funds but gradually enlarge bond position as retirement approaches.
  • Hold cash and municipal bonds for S/T expenses.
  • Check up once a year; rebalance if asset allocations +/- 10 percentage points of target of allocation.

Ron Lieber, “Your Money” Columnist

  • Money = Feelings (HT 9 Behavior Gap). Measure both. Know yourself.
  • Doing things > Having things. Experiences > Stuff
  • Our spending = Our values. Explain both to children
  • Do something you love. Money may not follow, but you’ll be happier.
  • Food trucks good. Mediocre pricey NYC restaurants bad. Omakase!
  • Honor your family’s history of having been helped: Give time + $$
  • Index only. Save a ton. Re-allocate periodically (HT 9 Michael Pollan)
  • Disability insurance: Undersold, Underbought.
  • Yes you can borrow for retirement. More people will use (+ need) reverse mortgages, + they will help many with few options.
  • Spend your old-age money. Your adult kids will be fine!

John Clements, Author of “Money Guide 2016”

  • Five Keys to Financial Wellness
    1. Keep housing, cars and other fixed living costs to less than 50% of income. That’ll mean less financial stress, more cash for fun – and the ability to save gobs of money.
    2. Never take on any debt you can’t pay off by retirement.
    3. In your 30s, worry what would happen if you died or couldn’t work. In your 60s, worry what would happen if you lived longer than you ever imagined.
    4. You can’t control the markets, but you can control risk, taxes and investment costs. Hint: Buy index funds.
    5. Want greater happiness? Design a financial life where you spend your days engaged in fulfilling work — and your evenings with friends and family.

Paul Sullivan, “Wealth Matters” Columnist, Author of “The Thin Green Line”

  • Saving too much gives you options. Saving too little means someone else makes decisions for you.
  • Think in terms of plans, not budgets. A healthy financial life is about saving and spending toward a goal, not depriving yourself.
  • Focus on what you can control — saving, spending, being healthy. But be prepared when something fails.
  • Every financial life — good or bad is about three things: decisions, behaviors and the choices they create.
  • In the end, be realistic!

Scott Adams, Dilbert cartoonist

  • Make a will (if you care)
  • Pay off credit cards. Now! Now! Now!
  • Get term life insurance if you have family.
  • Fund IRAs and SEPs to the max
  • Houses are expenses, not investments!!!
  • Put six months worth of expenses in bank
  • If any money left: 70% = Stocks ETF or Index fund (low fees type), 30% = Bond fund
  • For the “big plan” hire a financial planner who charges a flat fee (only!)



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