Personal Finance Index Card Advice

Back in 2013 on a show, a professor named Harold Pollack made the suggestion that everything the average person actually needed to know about personal finance could fit on an index card. He “proved” his theory by handwriting a list of personal financial advice on an index card, which then made the internet rounds. Now, he’s back with a co-author, and a $25, 256-page book called The Index Card.

Wow. Could this be the most cynical book ever written?


Index Card Finance

Free Financial Advice and Reality

It always seems that when finance experts are talking about OTHER finance experts, that THOSE guys are over-priced crooks who you don’t need. THEY are just out to take your hard earned money. THEY don’t want you to know that finance is actually super easy and that you don’t need THEM. Funny, how that always changes dramatically when the opportunity for money or notary for their own self comes up.

Back when I was a professional financial advisor, Susie Orman would stand up in front of as many people as she possibly could and say that all financial planners and advisors were crooks and you knew it because we took money from companies that offer financial products to help with marketing. That was PROOF that we could never be impartial, and that we could never be trusted to help you. Of course, when Susie Orman wanted to go on a national tour to help give financial advice to the masses guess who she had sponsor it to help with the cost? The same exact types of companies. But, of course, SHE could take money from those companies without compromising HER integrity. It was only OTHER people who couldn’t do that.

And, so here we come to Harold Pollack, the guy who declared that THEY want you to think finance is complicated and THEY make it that way just to take your money, when all you really need to know about money fits on an index card.

So, then why a 256-page book?

Well, for a few reasons we can guess.

First, the author is a professor, and publish or perish is a real thing. Publishing popular books is especially favored.

Second, the reality is that even if the index card were complete, that would still leave a LOT of questions for your average person, starting with HOW do I do those things.

Third, it just isn’t true. Finances can get very complex, and just because you rattle off a bunch of ideas doesn’t mean people can just do them. In fact, this particular list can only be accomplished after you already have your finances pretty well set up. A lot of financial advice is how to you get your finances in a position to be ABLE to follow this list.

What Is On The Index Card

I myself have put a tiny amount of effort into creating an easy do-it-yourself financial plan on more than one occasion. The truth is, that a simple retirement plan or other investing or savings plan would work for 90 percent of all Americans. The tricky thing is that you have to get there first.

The index card has basically 9 points.

  1. Save 20% of your money – He means income here, but you get the point.
  2. Pay your credit card balance each month 
  3. Maximize contributions to your 401k
  4. Maximize other tax-advantaged contributions like Roth, SEP-IRA and 529 plan accounts
  5. Buy inexpensive well-diversified mutual funds – He gives the standard example of a Vanguard Target fund.
  6. Never buy or sell individual securities
  7. Pay attention to fees and avoid actively managed funds
  8. Make your financial advisor commit to a fiduciary standard
  9. Commit to social insurance programs – This is basically telling you that sometimes things go wrong and things like unemployment insurance, medicaid, and welfare are good things that you shouldn’t be opposing.

There you go. That’s all you need to know.


This sounds great, but if you give two seconds of thought into HOW to do this, you are going to have questions, maybe even 256-page worth of them.

What jumps out at me most is #8. If this is all you need to know, why do you need a financial advisor at all?

There are plenty of question marks after that.

  • If your 401k doesn’t have those Vanguard funds, then which ones?
  • If you can’t maximize both 401k and Roth / SEP / IRA, then which should you do first, or in what combination?
  • How much should go into that 529 plan? Does the number change with the number of kids?
  • What about buying a house? Should you pay cash for a car, or use a loan, or a lease?
  • Should you be doing anything about taxes?
  • What about a house?

And so on, and so on, and so on.

Real Financial Advice Real Simple

There is an interesting irony when it comes to finance in that there are two, opposite, things that people want to believe. They want to simultaneously believe that there is a secret, inside, way to make money and get rich, while also believing that professional money people don’t know anything about making money and getting rich.

The reality, of course, is that neither thing is true.

The real trick is that even a simple list like this one can take a lot of help or research. Your 401k plan is already set up for you at work, but do you know how to setup a 529 plan? Do you know how to start a Roth IRA? Do you know how to make contributions? Do you know where you should be saving your emergency fund? It is these kinds of things that actually trip people up.

Believe it or not, if you pay high fees, and an advisor fee, an use active mutual funds, you will still come out way further ahead and richer than someone who pays rock bottom fees, does it himself, and uses those Vanguard Funds if you invest right away and keep investing while the other person starts and stops and figures it out.

Some of the best prepared people I ever saw as a financial planner were the people who did it “wrong.” They opened an IRA with an insurance company with high fees, but they did it when they were 22 and they put money in it every single year since then. That person has tons more money than the person that read so much they didn’t open their first IRA until they were 30 and then started and stopped and then changed it from mutual funds, to index funds, to ETFs, and then to Target Funds because something they read told them to do it.

The idea of a simple list is nice, but never assume it is all you need.


Leave a Comment

Your email address will not be published. Required fields are marked *