T. Chester has created a great site devoted to financial advice for his son. This is an excellent introduction to personal finance for anyone, and well worth the twenty minutes it takes to read.
Some of Chester’s key points:
- The most powerful force in the Universe is compound interest!
- Savings is most important
- There is no such thing as a legitimate “get rich quick” scheme.
- Make sure you have adequate health insurance.
- Make sure you have adequate disability insurance.
- Don’t buy life insurance (unless somebody else depends on your salary).
- Don’t pay credit card interest.
- Build a cash cushion of 3-6 months expenses (or salary, as preferred).
- Save to buy a house when you plan to stay somewhere more than two years.
- Take advantage of tax shelters.
His investing section discusses:
- The efficiency of the market.
- Investing time horizon.
- Tax-deferred investments.
- Historical return and risk of various investments.
- Other tidbits.
This is a great introduction to or review of personal finance precepts.
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