This article here, referred to me by Travis Morien, director of Compass Financial Planners PTY LTD (and whose website is an outstanding resource for financial information) is well worth a read.
The article highlites, of all things, Dilbert's 9 step plan as 'a unified theory of everything financial'. It is pretty good. In fact, I think it is outstanding. The author of the article calls for a nobel prize to be awarded based on the simplicity of the theory. The unified theory is contained in the following 9 point theory - 129 words! In Australian points 4 and 5 can become 'make additional contributions to superannuation, so they will help fund your lifestyle after age 60'.
- 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
It really is simple!
