Reddit reviews The Index Card: Why Personal Finance Doesn't Have to Be Complicated

Hey, we graduated at the same time! As long as you keep paying extra towards your high-interest loans first, you will pay them off quickly. One thing that will allow you to pay off your loans even faster is to change your repayment plan to 25 years instead of the standard 10.

This sounds counterproductive, but what this will do is dramatically reduce your minimum monthly payment. I did this and my monthly payment went from $500 to $260. However, I still pay the full $500 (plus some). Now, I am able to force $240 of the original $500
minimum payment to my loans with the highest interest rates.

This only works on federal loans because the interest rate will not change. Call your loan servicer and ask about a 25 year FIXED repayment plan. They will try to get you on an income-driven repayment plan, but don't do this as your payments will change as your income does. You want the 25-year fixed payment. I had a friend that tried this, but for some reason, his loan servicer would not let him do it. I think that your income and debt balance have some influence on whether or not you can get on the 25-year plan.


Another thing that you can do to retain more of your income is to rework your car insurance. You are on the right track by not paying it monthly. This saves you some premium as you pay for it all at once. To get the cheapest rates, you should buy a policy that lasts a full year (not 6 months because your rates can increase 2 times per year as opposed to 1). You should also get a $1,000 deductible. Most people have $500 deductibles. If you get a $1,000 deductible, you get put in a lower risk pool and will have a lower premium to pay. Just be sure that your emergency fund could take a $1,000 hit instead of a $500 one if you get in a wreck. Make sure that you also have good coverage like 100/300. Don't ever get the state minimums as this is not enough coverage and you will get sued to cover everything your insurance fails to pay if you are in an accident.

Another thing that you should do is read these 3 books. It sounds like your debt is under control and you are already familiar with Dave Ramsey (you are ignoring his snowball method for the much much much much much better avalanche method). So your debt is under control and will be paid off in a few years. What happens then? You should read these three books now, so you can set up your future today:

"The index card" by Harold Pollack.

This book tells you everything you need to know about personal finance. It is very simple and you will be ahead of the curve if you read this.

https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_2?ie=UTF8&qid=1536937178&sr=8-2&keywords=the+index+card

The second book you should read is "Unshakeable" by Tony Robbins. This book covers some of the same stuff in "the index card", but it goes into more depth about how to invest in index funds for taxable accounts, 401k, Roths, and other IRAs. This book can show you how to minimize your fees and help keep your risks manageable. It is a great book for learning how to invest for the long haul (it's not a get rich quick scheme).

Honestly, depending on what your interest rates are on your student loans, you should probably start investing some of your money rather than just paying off loans. Sure it will take you longer to pay off loans, but why pay off a loan today that has a 2-3% interest rate when you could buy into an index fund that will pay you 10% on average? I would aggressively pay down the high-interest stuff (anything above 4%) as fast as possible. Once that is paid off, I would shift some of the money to invest. I would still pay more than the minimum on the remaining loans. Doing this will allow you to take advantage of compounding interest and your net worth will be higher when your loans are paid off. This is where you should stop listening to Dave Ramsey. Ramsey's goal is to get you out of debt as quick as possible. His goal is not to increase your net worth as much as possible. Once you get all your student loans above 4% paid off, your student debt is manageable and will be close to the traditional inflation rate. As long as you keep paying the current minimums, it will be gone by 2025 (sooner if you pay a little extra). But your net worth could be significantly higher if you take a few hundred dollars a month and invest it.

https://www.amazon.com/Unshakeable-Your-Financial-Freedom-Playbook/dp/1501164589/ref=sr_1_2?s=books&ie=UTF8&qid=1536937326&sr=1-2&keywords=unshakeable+tony+robbins

The third book you should read is "Your money or your life" by Vicki robbin. This book is crazy and has a cult-like following on places like the financial independence subreddit. This book shows you how to become financially independent. It has a foundation based on the mindset that "if you always want more, you will never have enough." This book shows you how to make a plan to retire as soon as humanly possible based upon your age, income, and fixed expenses. I have read it and adopted many of the concepts. I don't necessarily plan on retiring early, but I will be secure and able to retire if shit hits the fan, the option will be up to me and not my employer.

https://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766/ref=sr_1_1?s=books&ie=UTF8&qid=1536937840&sr=1-1&keywords=your+money+or+your+life+2018+edition

I hope this helps. Good luck!

I started with this book and it's helped a lot--> https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_1?keywords=personal+finance+index+card&qid=1565197060&s=gateway&sr=8-1

It simplifies everything for you. Made me realize I don't need an FA, but if you do need one there are resources in the book to help make sure you choose someone who will actually help you and act in your financial interests. Not all financial advisers do that, nor are they required to.

Also I saw one of your other comments about the house issue -- if you're not making much right now not sure how you would expect to pay off a house that quickly unless I'm misunderstanding your question. Also for side income, a house isn't really a sure thing except in certain circumstances. A huge portion of your investments would become tied up in one asset that could flood, get damaged in a hurricane, etc. Nothing wrong with buying a house for yourselves to live in if that's what you want and can afford it, but sounds like you're getting way ahead of yourself with the decision to buy a house as an investment.

I really like the podcast Death Sex and Money. They have a lot of resources online about beginning to deal with a lot of these issues. For example they just had a two part episode about student loan debt and the different ways people are dealing with them. Here's a link to their back catalog.

I listen to a load of economic and financial podcasts because I find it interesting. There's one book that's been recommended across multiple different ones. Here's an NPR link about the basis for it. It pretty much is that all the best financial advice can fit onto an index card as is pretty simple. Here's the amazon link to the book but you could also probably find it for sale cheap at a used book store or get it from your library.

The wiki is a great place to start, especially the PRIME DIRECTIVE.



This book is a nice short read that explains things very well.

Great, so then you're looking at the following:

Emergency Fund: let's round up to $2000
Retirement: $5500
New Car: $10000 (I'm guessing here)

Which leaves you with $6,500 to consider investing. That's what I'd focus on with your financial advisor. Keep in mind, you generally want to look at investing as a long term play (5 years+) so if you ever feel like you'd need to pull that money out, I'd keep it more liquid and maybe beef up your EF some more. If you're comfortable with not tapping into that money, you can look at crazier things like some of the cryptocurrency stuff floating around (higher risk) or real estate (lower risk). Generally a few good investing resources are Wall Street Survivor (they have a bunch of free online courses), Investopedia (awesome resource for learning about finance) and this book (The Index Card - https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528/ref=sr_1_1?ie=UTF8&qid=1498149260&sr=8-1&keywords=the+index+card).

Alternatively, one could just read https://www.amazon.com/Index-Card-Personal-Finance-Complicated/dp/0143130528 , and avoid Dave's notoriously bad investment advice (and hopefully his Reddit cult as well!).