About the Author

author photo

WWS is all about your success. The goal of the site is to educate people from around the world on the art of success, so that they can be better equipped to reach their full potential and achieve their dreams.

See All Posts by

Everything You Need to Know About Financial Success in Less than 100 Words



What does a cartoonist know about financial success?  Turns out that Scott Adams, the creator of Dilbert knows a lot more than you would think.   Adams has always been interested in finance.  In fact, he has an MBA from the University of California at Berkeley and after college he worked for a bank for eight years.  Adams has come up with a simple list that covers all the personal finance basics in just 126 words.  Just for fun, in this article I am going to try to beat Adams and come up with a similar but even simpler list, with less than 100 words.

Adams thought about writing a book about money, with a funny style similar to Dilbert.  Then he realized that the formula for financial success is really simple, and can be captured in just one page.  In Adams’ own words: “I realized there was a very big need for people to know how to do this stuff.  I bought all the investment books I could.  The more I read the more I realized you couldn’t make a book out of it if you were honest.   Because the only way to do it would be on one page.”

Think about this statement for a minute:  “you could not make a book out of it if you were honest.”  Have you been to the book store lately?  How many books on money and personal finance have you seen?  What is Adams really saying here?  I’ll let you decide for yourself.

Adam’s list has won much praise from the financial professionals.  The list is simple and yet it covers all the basic financial principles that you need to know in order to be successful financially.   One of Adams’ fans is John Brennan, Chairman and Chief Executive Officer of Vanguard:  “When I look at ‘no credit card debt,’ hallelujah!  A will and life insurance – absolutely.  It is right on the money for me.  He gets it”, says Brennan.

If you want to read Adams’ list of everything you need to know about money you can find it in his book Dilbert and the Way of the Weasel.   Here is my similar but yet shorter version of the list.

Everything You Need to Know About Financial Success

  • Eliminate all debt except for your mortgage
  • Create an Estate Plan
  • Maximize your tax deferred retirement plan
  • If you have kids, save for college through a 529 plan
  • Buy a home you can afford
  • If you have a family, get term life insurance
  • Put six months of expenses in a money market account
  • Pay yourself first at least 10% of your income
  • Invest your savings in no-load diversified funds:
    • 60% in stock funds
    • 20% in bond funds
    • 10% in REIT funds
    • 10% in money market funds

There you have it.  Everything you need to know about money in less than 100 words.  If you want to simplify this even further, invest in balanced index funds that have a combination of domestic and international stocks and bond.  You should be able to achieve the asset allocation above with 3-4 funds.  Do not invest in more than 10 funds, as this would make your financial life too complicated.

If you want to spend more time reading about how to be financially successful, you can check out these posts that complement the information provided here:

Making a Financial Turnaround at Stevepavlina.com – this post approaches financial success from a personal development standpoint, focusing on how to turn around a bad financial situation.

 

Getting Rich is Simpler than You Think at Free Money Finance – this post emphasizes the power of regular investing and compounding.

 

Remembering the Big Picture at My Money Blog – this post says that the author learned that striving for financial freedom is very simple.  Some of the same ideas from the list above are listed there.

 

1.1 Million Reasons to Participate in a 401(k) at Blueprint for Financial Prosperity – this post tells you how you can build $1.1 million in your 401(k) in 30 years.

Being financially savvy and achieving financial success is a lot simpler than some people make it seem.  Follow the simple rules above and you too will be on your way to financial success. 





There Are 3 Responses So Far. »

  1. Thanks for your contribution to The Healthy & Fit family posted yesterday here:
    http://www.babylune.com/the-eighth-healthy-fit-family-carnival/

    I’m happy to send so much traffic your way! I hope you might make the effort even more successful by linking back and thinking about hosting. One of the great things about running a successful blog is the opportunity to give back to the community.

  2. Kate,

    Thanks for hosting. A link back has been added. I am considering hosting one or more carnivals.

  3. This is a great article. Thank you for sharing this. More power to your site! :)

Post a Response