Concise Financial Plan

The Shortest Financial Plan in The World

Or
____________________________________________________

Everything You Need to Know About Personal Investing

By Scott Adams

Make a will.

Pay off your credit card balance.

Get term life insurance if you have a family to support.

Fund your company 401k to the maximum.

Fund your IRA to the maximum.

Buy a house if you want to live in a house and can afford it.

Put six months’ of expenses in a money market account.

Take whatever money is left over and invest 70 percent in a stock index fund and 30 percent in a bond fund through any discount brokerage company and never touch it until retirement.

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

Scott Adams is the creator of the Dilbert cartoons and heaven forbid I upset him and end up being targeted by Dilbert but, I just have to add my two cents worth.

While the items above were not numbered in his book Dilbert And The Way Of The Weasel it is implied that this is the order in which to approach them. My preference would be to change the order a little so that instead of paying off your credit card balance to the exclusion of everything else, you start building your six months (or twelve months) emergency fund as you pay off credit cards. Maybe at a 50/50 ratio or something like that.

Getting term life insurance will work, but don’t forget the other insurance you need to carry on your car, home, health, etc.

Obviously there is much more to be done for a full financial plan but Scott did his homework and intentionally stripped this down for efficiency. That said, one thing you may notice about financial planning is that almost every planner will have a little different take on what you should do. I would suggest, however, that you never abdicate completely. Stay engaged and make sure any plan fits you personally.

I’m thinking maybe 65/35 or 75/25 on those investments but then that’s just me…