A couple weeks ago, I, along with others, was invited by Adam Chudy to share my best financial advice. Sounds easy enough. But here’s the catch: It’s supposed to fit on a 3×5 index card. Adam has gathered many index cards since then. You can check them out here and here.
The idea behind this comes from an UC Chicago social scientist Harold Pollack. While talking with a financial expert regarding what Pollack’s views as “the financial industry’s basic dilemma: The best investment advice fits on an index card” (but we find a way to make it much more complicated than it needs to be).
Although Pollack was intending the comment to be taken in jest, he was asked for that index card. So he went home and wrote all the advice he thought was needed. And sure enough, all the advice you need does fit on a single index card! You can read the original article in the Washington Post and see his infamous card by clicking this sentence.
Whether or not you unequivocally agree with his specific advice, the sentiment still stands: Properly managing money does not need to be complicated. In fact, it shouldn’t be complicated.*
*Please note: As I was doing this exercise I came to the realization that putting financial advice on a single index card is quite complicated. Not necessarily because of the information, but because when you need an innocent, unused index card IT BECOMES FREAKING IMPOSSIBLE TO FIND ONE!
FinanciallyFitz’s Index Card
How to Become Financially Fit
The Back of the Index Card – A Few Things To Keep In Mind…
- The good news: Personal finance is mostly common sense. You can do it!
- The bad news: Personal finance is mostly common sense. You can (always come up with a good excuse why you shouldn’t) do it!
- The most important thing to understand? Opportunity Costs. $1 going to Option A means $1 CAN’T go to Options B-Z.
- Saving and earning are not equals. Every dollar saved is a dollar-for-dollar increase to your cash flow margin. But every dollar earned only increases your cash flow margin by approximately 70 cents. Moral of the story: Do Both!
- There’s a big difference between growing money and building wealth. One focuses on your bank balance. The other focuses on your behavior (which happens to be positively correlated with your bank balance).
There you have it, folks. All I think you need to know about personal finance on a single index card. Tell me what you think! And if you found this helpful please share!