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Scott Adams' Financial Advice

December 27, 2020

Today, I was listening to Scott Adams daily video blog. As the creator of Dilbert, Scott Adams is well-known through that cartoon for highlighting the stupidity often found in the corporate world. In this video (episode 1233) he mentioned that he had outlined a list of financial advice and suggested we search for it. He said that he wanted to write a book about financial advice but gave up since it really boiled down to just these ten things and the rest of the “financial advice” industry is more-or-less a fraud.

Here is his list of recommendations:

  • Make a will
  • Pay off your credit card balance
  • Get term life insurance if you have a family to support
  • Fund your company 401(k) 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’ expenses in a money market account
  • Take whatever is left over and invest it 70% in a stock index fund and 30% 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

I would make one suggested change. Buy a house once you find yourself in a fixed location. Regardless of whether you are renting or buying, you are paying for a place to live. If you are renting, though, you are essentially buying somebody else’s home or business.

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