Scott Adams, the guy who writes Dilbert is undeniably a smart and funny guy. If you don't read his blog then you should add it to your daily reading list now. Apparently he was up for consideration for the Nobel Prize for Economics recently. He didn't win it but his 9 rules for financial security seem incredibly sensible to me:
- Make a will
- Pay off your credit cards
- Get term life insurance if you have a family to support
- Fund your 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 worth of expenses in a money-market account
- 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
- 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
Not all of the rules translate directly to the UK (401K and IRA are both pension related) but it's pretty close so this list is going to become a bit of a target for me over the next couple of years.
As the article about this says, this is pretty obvious stuff, but the real skill comes in expressing the rules in such a simple manner. I think most of us in our technical fields are probably guilty of not communicating clearly, Scott is as good a person as any to model your style on I think.