Ron Lieber, writing for the NY Times, authored an article entitled, “5 Basic Guidelines for Managing Your Finances“. In trying to boil the bubbling world of personal finance into 5 basic guidelines, Lieber provides an interesting article, albeit I believe 3 guidelines would have sufficed.
Lieber’s Guidelines are as follows:
- Investing is Simple – To this point, I give a hearty amen. Investing is simple. It is much more simple than most people would have you to believe. Lieber suggests index funds and mutual funds as investment tools. These tools perform very well for most investors and are very easy to use & understand.
- It Still May be Worth Paying for Help – Lieber makes a valid point here. Most investment professionals should be able to provide an additional 1% (or more) in return. I am just not certain that they would. In most areas of the financial realm, I am a small fish in a big-huge pond. Given my modest financial weight, I am not sure that I would receive the attention & respect that I would demand from a broker. Thus far, I have found this true in various avenues. Plus, I ultimately enjoy doing it myself, though not everyone does. In the end, to this I would cite Rule #3.
- Peers May Know More Than Professionals – As a product of the College of Business, many of my college peers have become career professionals. I assure you, many of them have no idea what they are doing. I mean that as kindly as I can type it. However, many professionals are either misguided or poorly educated. My advice to this end, find professionals you know and trust. Friends, or references from friends, may provide the same level (or better) of advice without the costs.
- Everything Can (And Should) Be Automated – Although I would encourage automating investing (automatic transfers to savings), this is simply a matter of preference. I would always warn against automating to ignorance. Always keep a hand in your finances.
- Have The Talk – This is an interesting 5th point. I enjoy the vision behind it. As Social Security goes down the crapper, todays unprepared mid-aged will need to rely on something. That will most likely be family. I sure don’t expect the government to pull any Social Security rabbits out of their hat. Planning for the future of your immediate family, may very well include the plans (or lack there of) of your parents & in-laws.
One other thing that impressed me about this article, it was written tomorrow. Where is the DeLorean when you need it?!
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