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Nov 09

Book Review: The Index Card

The Index Card: Why Personal Finance Doesn’t Have to Be ComplicatedThe Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen

I heard about The Index Card, the idea, the card, the book, from Planet Money and decided that it was the thing I needed to read/listen to in order to find out if I’m as much of a hopeless financial screw up as I feared I was.

If you haven’t heard about “The Index Card” the idea is that all the financial advice you need can fit on the back of an index card and that it’s all free from the library. I don’t remember all the rules, but they are nothing extravagant, things you might figure out on your own. For example, don’t carry a credit card balance from month to month. try to save 10%-20% of your income. Invest in low-fee index funds rather than managed funds. Buy a house when you’re financially ready to do so.

The best thing I got out of this book was reassurance that I am not, in fact, a fuckup financially. I do most of the things they say to do, more or less, and I didn’t do the things they say not to, except “blindly move your funds out of a 401K after you leave a company.” Though I guess it wasn’t blindly, it was because Wells Fargo is evil and they don’t deserve my (or anyone else’s) business. That was one of the areas I felt could have used more clarification. I didn’t quite get why that was a big deal. Other areas were a little too complicated. “Invest in low-cost, low-fee index funds” I get, but when they start talking about small cap and large cap and global versus international … whoa, whoa, whoa, slow down there, buddy? What’sit now? I thought the whole point of this is that it was supposed to be easy!

Maybe it’s because I got the audiobook, but I thought that it could have been longer, with more takeaway bullet points. Annuities bad. Term life good. Whole life bad. Index fund good. Financial advisor bad. It’s not a bad book, and maybe worth buying for a person who is on financially shaky ground and wants to learn how to do things right, but it’s not a hugely significant improvement over the original index card, which you have to admit, is pretty darn cool.

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