We like things to be simple. How to Live to Be 100. Four Ways to Improve Your Sex Life. No one clicks on links to “150 Things You Need To Do To Feel Better.”
When Professor Harold Pollack was doing an online video chat with a personal finance writer about how people often get steered into bad investments by financial advisers, he said (probably without giving it great forethought) that the best personal finance advice “can fit on a 3-by-5 index card.”
He went on to say that paying someone for advice means that “almost by definition, you’re probably getting the wrong advice, because the correct advice is so straightforward.”
I heard him interviewed and he said that after that video went online he got lots of emails wanting that index card. His comment put him in a metaphoric corner. But he responded by writing the principles he believed in on a card, took a photo with his phone and posted it online.
It went viral, got big press, got tweeted by regular folks and economists, and became a simple self-help meme.
People realized the advice wasn’t new or earth-shaking. Sort of like following that Blue Zone lifestyle to live longer: not complicated, but not easy to do.
I heard Pollack and Helaine Olen (that original interviewer) recently talking on NPR because – ironically – they have turned the card into a book: The Index Card: Why Personal Finance Doesn’t Have to Be Complicated
Why do we need a book if it all fits on a card? Well, both of making a living is part of it. Publishers seeing a market is part of it. But in a less cynical response, simple is a start but you need details.
Pollack said (without putting his book on the same shelf) “…why do we need an entire Bible really? We have the Ten Commandments and the Sermon on the Mount.”
Simplicity can be satisfying, to a certain degree, and also frustrating. “See the ball. Hit the ball,” was something a baseball coach once told me. Good advice, and useless advice, all at once.
How would you interpret his advice to “make financial adviser commit to a fiduciary standard?” Do you know what a fiduciary standard is? Do you even have a financial adviser? Didn’t he say you really didn’t need one?
I like simplicity. I strive to make my life simpler, cleaner, less cluttered. That can be a complicated thing to do.