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One size fit all financial advice

by Jim Wang

Updated

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A couple years ago, the index card craze swept through financial news. Everyone loves simplicity.

The thought that all financial advice for everyone could fit on a single 3″x5″ index card? Can't get simpler than that.

Harold Pollack's one size fits all financial advice (WaPo article)

Here's what the card says:

  • MAX your 401(k) or equivalent employee contribution.
  • Buy inexpensive well-diversified mutual funds such as Vanguard 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.

It's not bad.

Here's the thing – one size fit all financial advice doesn't exist. Sadly.

But you probably knew this already…

BUT – the card gets you 90% of the way there.

And getting start on your “90% of the way” today, is better than waiting for the 100% to present itself before you make the journey.

Remember, perfect is the enemy of good.

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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About the comments on this site:

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

  2. Joe says

    Yeap, that’s pretty good on an index card. Everyone has to figure out their own personalize strategy. If you’re good at being frugal, then save more. If you’re good at making money, then concentrate on that.

    • Jim says

      That said, frugal can only get you so far… it’s by definition a finite amount (what you spend). I think that it’s best in the short term to think of ways to save but earning income is more of a long term strategy.

  3. Deacon says

    How did you get a picture of my index card? 🙂 But in all seriousness, I think if someone takes that advice, they will not be in bad shape. I just advise that their is on board if they are going to stock so much in savings and investments, because for most people that would involve a lot of sacrifice.

    • Jim says

      It’s good basic advice that works in the vast majority of situations… hard to go wrong saving 20% of your money!

  4. Allan says

    This is a good one and great list of pieces of financial advice to ponder. True, there’s no one size fits all financial advice. Everyone has his/her own needs, wants, and goals in life. The next person to you may see your strategies something of no value to him/her because his necessities are far different than yours.

    Having said all these, I would agree that though there may not be a ‘one size fits all financial advice’, we can tremendously learn from what other people are doing and pick up bits and pieces of lessons from them to our own benefit.

    • Jim says

      One of the biggest benefits you can get from reading blogs, which are often written by regular folks, is a perspective into different ways of managing money. What works for Joe might not work for Jane, but Jane can take bits and pieces from what Joe does to help advance her own finances. Great point Allan!

  5. Stockbeard says

    Example of why it does not work for everyone:
    I’m not maxing out my 401k, because I don’t intend to stay in the US and am not a US citizen: I’ll have to cash it out way before I’m 59, and will pay a 10% penalty on it. So I’m just putting enough in here to get my company match.

  6. ShadowWalker says

    A couple of non – direct financial planning tips –
    – hedge any other liabilities – the pay off of which may help your dependents in the eventuality of your death with a term life insurance.

    – also develop a discipline to keep physically fit – to enjoy your developed financial fitness for a very long time.

  7. Minh says

    Index card advice is great, especially since it can give you a refresher on things you may forget as time passes by. I fund myself having to re-learn a lot of what I already learned years ago on the subject of personal finance if I don’t write some spark notes.

    Have you taken a look at this article? – http://www.smartmoneybetterlife.com/eat-your-cake-now-or-when-you-are-59-5-addressing-the-conundrum/

    It really fascinated me because I had no idea that you can actually come out ahead with a tax-advantaged account vs. normal investing accounts even with the 10% penalty as long as you only withdraw the income (and not the principal) from your investments.

    Just another reason to max out your tax-advantaged accounts, though of course, even this isn’t for everyone, and some will find it better for their situation to avoid them completely.

  8. Rachel says

    While this note card might not encompass everything you need, it is definitely a helpful reference. As someone who is still putting together a financial plan, it’s reassuring to see that you do not have to have it at 100% from the get go. Thanks for sharing!

    • Jim says

      You never need it to be perfect, it just needs to be better than what you had before. If you had nothing, this is certainly better. 🙂

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