The Index Card

The Index Card: Why Personal Finance Doesn’t Have to be Complicated by Helaine Olen and Harold Pollack

Personal Finance

The Index Card.jpg

Overall Rating: 3.5

Quick summary: Dr. Harold Pollack from the University of Chicago suggested to financial journalist Helaine Olen that all of the financial advice a person needs can fit on a 4”x6” notecard. The idea went viral and Pollack and Olen followed up with their talk with this book explaining in further depth the basic rules that should govern personal finance.

This is an excellent primer for those who are recent high school/college graduates and those who are new to personal finance. The rules are very basic and only a few of them were surprises to me. The basics of save 10-20% of your income and invest for your retirement. Wait to buy a house till you can afford it and buy insurance (car, home, health, etc.).

The rules that surprised me were their advice not to buy individual stocks as it’s a form of gambling. I knew it was a form of gambling, but I didn’t realize that even experts had such a hard time buying and selling at the right intervals. I was also surprised by their advice about financial advisors. They suggested only using a fee-based fiduciary. The word fiduciary is important because a person with that title has basically pledged to only look after your financial best interest. I had not realized that many of the titles in the financial world meant almost nothing, financial manager, financial planner, and other such titles. I knew that most of them worked on commission, but didn’t realize that fee-based professionals existed.

Overall, there’s no concrete plan the way there is in other financial planning books. They don’t suggest doing one step before another and they avoid getting too specific for the most part. But I did learn some interesting things, like 96% of people have used some sort of government assistant, but only 40% believe that they do. It’s for this reason that they suggest supporting the social network, since everyone needs it at some point or another. Like all other financial books, this suggests a certain political outlook, but it wasn’t pervasive throughout the book, rather it was concentrated in this last step. And to me, it makes sense since it’s hard to imagine going through college without government assistance in some form or another, like a grant or a government loan.

Is it worth buying? (Kindle $9.99)

Yes, if you are new to the world of personal finance. If you’ve never read a personal finance book, this is a great place to start because it has all of the fundamentals without being overwhelming. But like a lot of other books, I borrowed it from the library rather than buying it.

Something else you might enjoy:

I’ve already recommended all of the personal finance books I’ve read and thought were worthwhile. What’s your recommendation?

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