Wise words

My favourite financial blog, Alphaville (link), reiterates some simple and sound financial advice:

“In his 2002 treatise, Dilbert and the Way of the Weasel, [Scott Adams] laid out one of the most sensible and succinct approaches to financial planning:

  • Make a will.
  • Pay off your credit cards.
  • Get term life insurance if you have a family to support.
  • (*)Fund your Pillar 3 account to the maximum
  • Buy a house if you want to live in a house and you can afford it.
  • Put six months’ expenses in a money market fund.
  • 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.”

(*) Note that the original advice here was “Fund your 401(k) to the maximum” and “Fund your IRA to the maximum”, but these are valid for the US; Pillar 3 is, more or less, the Swiss equivalent.

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