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Harold Pollack

When University of Chicago social scientist Harold Pollack was interviewing financial author and critic Helaine Olen at the Reality-based Community blog, he stated what he thinks is the financial industry's biggest dilemma: "The best advice fits on a 3x5 index card and is available for free at the library."

One commenter on the blog, "Alex M," complained, "What *is* this simple free best personal finance advice that fits on a 3x5 card? It's kind of a tease to say it's so easy and then not go ahead and spell it out in 20 seconds."

Pollack took up the challenge and wrote a quick summary on a 4-by-6-inch index card. Some of his advice included the following:

"MAX your 401(k) or equivalent employee contribution.

Buy inexpensive, well-diversified mutual funds …

Never buy or sell an individual security.

Save 20 percent of your money.

Pay your credit card balance in full every month."

He also talked about tax-advantaged savings vehicles, fees, financial advisors and encouraging social insurance programs.

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"Pollack's right," said Ezra Klein at the Washington Post's Wonkblog. "Follow these principles and you'll be in much, much, much better shape than most Americans — or most anyone. … (T)he lesson here is that once you have an income that you can live off of and save a little bit besides, managing your finances shouldn't be all that hard. The people making it complicated are often trying to make money off of you."

Troy Senik at Ricochet said Pollack's last item, to "Promote social insurance programs to help people when things go wrong," is not really financial advice. "It clearly wanders off from the world of personal finance into public policy," Senik said.

"Mark," a commenter on the Ricochet article, adds another item: "Carry enough insurance to provide for your reasonable needs and cover reasonably probable risks."

But that would probably require another index card.

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