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

0. Demystified

We are flooded with investment advice - from newspapers, websites, TV, friends, consultants, financial advisers, work colleagues. The amount of uncertainty surrounding the markets adds a halo of a closed, secret club, which only insiders can decipher. When they do drop hints and give advice, they often act in their own interest, making it even more difficult to separate good advice from bad.

Don't you trust me?

The purpose of this blog is to demystify this world a bit, by choosing a topic once a week, explaining it and describing the impact it might have on your investments. Along the way, one of the most important lessons I learned is that simpler is often better. Einstein was famously said "Make every thing as simple as possible, but not simpler". In this blog I'll attempt to do just that.

A bit about myself: my background is with math and software engineering. Everything I know about investment I learned from my experience, from books and from applying common sense to what I hear from consultants, advisers and friends. I'm a rational investor - or at least trying to be one (more on that in a forthcoming blog.) I believe in a rational universe, even when it's governed by irrational people. For me, this means that there's a way to sort out the chaos of Wall Street and come up with a rational, logical, realistic plan that maximizes gains, minimizes risk, and, perhaps most importantly, takes as little time as possible from you and let you spend your time doing more fun stuff.

Along the way I plan to include math tidbits - I promise to keep them in check. Still, the basis of everything I try to do here is simple arithmetic, and sometimes it's important to go back to basics and see what the numbers tell us.

I hope you enjoy the journey. Let's begin!