Nothing ventured, nothing gained

It looks as though famed cartoonist Scott Adams revealed the secret to finance success in Dilbert and the Way of the Weasel. At least one person smarter than myself thinks it’s worthy of a Nobel Price in Economics. I graduated a few years ago, so I’ve had time to formulate my own thoughts on personal finance, but let’s see how I stack up against Dilbert.

1. Make a will

   Nope, haven’t done that one yet.

2. Pay off your credit cards

   Yep. In full, every month.

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

   I don’t have my own family, but in the past I’ve usually take the default plan my company offers.

4. Fund your 401k to the maximum

   Definitely. I’ve taken the 401(k) route with every company I’ve worked for. At the very least, you should put in whatever your company matches, and the yearly limit if you can afford it ($15,500 in 2007). My current company doesn’t do this right now, but we’re just starting out.

5. Fund your IRA to the maximum

   Most definitely. Since the yearly limit is $3k, it’s easy to max out your Roth or IRA account.

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

   The housing market is tanking, so if you’ve been saving up for a rainy day, certainly now is the time to look into buying a house. Also, according to this MarketWatch (01/08) article, it looks like people are house shopping again.
   M and I bought our house back in October 07.

7. Put six months worth of expenses in a money-market account

   And done.

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.

   Kind of. I have a Vanguard Target Retirement Fund. The fund diversifies investment according to age. Since I’m young, apparently I can take risks like Indiana Jones, so it invest in stocks. As I get older, it plays it safe and invests in things like bonds and peanut butter.

9. 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

   I’m not really in either of those positions so…

Not a bad list. I’m lucky for a guy working in his own start up. Should they have taught subjects like this at ASU? I’m not sure, but it sure would have been more useful than, say, UNI 194 - Introduction to being a Student aka How To Study.

How do my fellow readers do?