Investing With Dilbert,
or
Everything You Need to Know about Personal Investing
I've long had a belief that there is no completely honest and straightforward book on investing because such a book would be so short that it would be unmarketable. (Additionally, most people that buy such books don't want a simple answer because it takes all the fun/challenge/mystique out of investing.) I was recently delighted to discover that I am not alone in my feeling.
Scott Adams, the creator of the Dilbert comics, also writes books, which are are of course also humorous. However, in one of his books I found the following section, which is quite serious, and which I couldn't agree with more:
I once tried to write a book about personal investing. It was supposed to be geared toward younger people who were investing for the first time. After extensive research on all topics related to personal investing, I realized I had a problem. I could describe everything that a young first-time investor needs to know on one page. No one wants to buy a one-page book even if that page is well written. As a consumer you'd feel you were paying mostly for the binding. ...
Everything You Need to Know about Personal Investing
- 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' 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. (Editor's note: Use Vanguard, not any company.)
- 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 a percentage of your portfolio.
From: Dilbert and the Way of the Weasel, by Scott Adams