Comment by stevoski

2 days ago

A fine time to acknowledge Scott Adams’ remarkably simple and clear financial advice: https://www.mattcutts.com/blog/scott-adams-financial-advice/

I think it is pretty good.

You can, of course, debate it - and HN being HN people probably will.

24 comments

stevoski

emil-lp 2 days ago

Here it is, unabridged

    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 is left over and invest it 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.

hearsathought 2 days ago
Solid advice overall. But I have to disagree with the 401k advice.
> Fund your company 401K to the maximum.
Fund it up to amount your company matches. The maximum you can contribute to 401k is 40% of your salary I believe. I wouldn't contribute 40% of my salary to the 401k. Just the amount your company matches ( 5% or whatever it is for your company ). That 5% match ( or whatever it is ) is free money. It would be foolish to leave it on the table.
- tyrust 1 day ago
  
  There is not percentage limit, it's a flat number that increases annually https://www.irs.gov/newsroom/401k-limit-increases-to-24500-f...
  I max my 401k because not taking advantage of tax-advantaged income is leaving money on the table.
- kristianp 1 day ago
  
  Unless you work for Enron, where the retirement fund went down with the company.
  
  2 replies →
- lateforwork 2 days ago
  
  So if your company doesn't match your contribution then contribute nothing to 401k?
  
  9 replies →
- Izikiel43 2 days ago
  
  No, if you can, max the 401k, as long as you've set up emergency fund and other stuff. After maxing the 401k, then go to taxable brokerage.
  The personal finance reddit goes like, fund it up to the match is basic, but if you can, max it.
  You reduce your taxable income and the money doesn't pay capital gains when you pull it out.
  
  3 replies →
rchaud 2 days ago

70% in a stock fund is extremely risky if you are close to retirement. You will not have fresh income to dollar-cost-average your way back into the black in the event of another market crash.
jojobas 1 day ago

This is solid advice assuming the shit doesn't hit the fan. In Adams' lifetime many countries' pension funds went bust and inflation ate any soft assets.