1. Everything You Need to Know about Personal Investing

Scott Adams, the creator of Dilbert, once tried to publish his investment book. Apparently, no publishing house accepted it, since it was only half a page long. Still, if you follow his rules you'll be better off and wiser than most Americans. I wanted to start with these because they capture the essence of my investment philosophy - keeping it simple and logical, while avoiding self-serving advisers. If you read nothing else from this blog and follow these rules, I believe you'll be doing better than most investors.

Adams eventually included his list of nine rules that he dubbed "Everything You Need to Know about Personal Investing" in his 2002 book Dilbert and the Way of the Weasel. I reproduce the list below.

One fan of the list: Barton Malkiel, whose excellent 2003 book The Random Walk Guide to Investing includes a lengthy exposition of 10 rules for individual investors. Late in that book, the economist reprints Adams's short list with "a confession." After finishing his book, Prof. Malkiel writes, he discovered that Adams had "presented similar rules even more succinctly."

Everything you need to know about investing:

1. Make a will
2. Pay off your credit cards
3. Get term life insurance if you have a family to support
4. Fund your 401k to the maximum
5. Fund your IRA to the maximum
6. Buy a house if you want to live in a house and can afford it
7. Put six months worth of expenses in a money-market account
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio