Personal Finance advice from “Dilbert”

By | November 17, 2008

Vanguard − The “Dilbert” guide to personal finance

This list from Scott Adams, the creator of Dilbert, is about 2 years old, but I just saw it for the first time, and I think it’s an excellent distillation of the basics of personal finance. It really focuses in on exactly what I’ve been reading about in the couple of years that I’ve been getting more serious about personal finance.

Everything you need to know about financial planning*

  1. Make a will.
  2. Pay off your credit cards.
  3. Get term life insurance if you have a family to support.
  4. Fund your 401(k) to the maximum.
  5. Fund your IRA to the maximum.
  6. Buy a house if you want to live in a house and you can afford it.
  7. Put six months’ expenses in a money market fund.
  8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker, and never touch it until retirement.

If any of this confuses you or you have something special going on (retirement, college planning, tax issues) hire a fee-based financial planner, not one who charges a percentage of your portfolio.

* Dilbert and the Way of the Weasel, Collins, New York, 2002, p. 172.

On the Vanguard page, a bunch of experts weigh in with their opinions on the advice, all of which is positive.

I’ve got #1 and #2 in progress right now. #3 would be next in line. Numbers 4-7 are in various states of completion/planning, though funding the IRA and 401(k) to the maximum is currently a bit of a stretch goal. Number 8? Yeah, well I suppose I’d have to have money left over for that to happen.

These are all long-term goals, but any progress toward them is good. I’m happy that I’m making some headway.

Speaking of goals, and Dilbert:

7 thoughts on “Personal Finance advice from “Dilbert”

  1. YW Aronson

    It’s really a great plan. I hope I would be able to reach these goals. Financial planning is a very important for every person especially in these hard times. Vanguard is one of the world’s largest investment management companies and would really help you with financial planning.

    YW Aronsons latest blog post..Moneysmartz Profile Updates 11/17/2008

  2. Dan

    lol I love dilbert! Thats some good financial advice though, albeit I just don’t have enough money to be considering anything like that atm, lol! I managed to pay off my overdraft though…luckily haven’t had to get credit cards just yet!

    Dans latest blog post..How To Overcome Distractions

  3. Jeff Post author

    I agree, YW. If we as citizens would just apply even some of these tips, the economy probably wouldn’t be quite as bad as it is now, too. (Not saying that would cure the problem, but it certainly wouldn’t hurt.)

  4. Jeff Post author

    That’s great that you don’t have credit cards! Those are by far the easiest way to get into debt. It was for me, and I thought I was being careful.

    You can still make a will, btw. There are some free options for doing that (though I’m too lazy to look up the links at the moment… sorry).

  5. Jeff Post author

    Well, it looks like you and Wally have exceeded your goals. I see you’ve continued your winning streak in the commentluv contest. Do you sleep, or just comment? :)

  6. Financial Planning Portland

    I like the 6th point. Buy a house only if you can afford it.Because i have seen many people who sacrifice their daily activities and their happiness for want of a house…..

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