This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Tuesday, March 17, 2009

Article: 7 New Rules of Financial Security

Posted By Paul

A great article listing new rules for financial security.

You can read the full article at:
The 7 new rules of financial security

I also thought I'd summarize them here:

Rule 1: Risk
It essentially says that you need to be very careful to make sure that invested money is available when you need it. There have been many stories of people with college or retirement funds invested in high-risk stocks that collapsed right when they needed the money.

Rule 2: Cash
This talks about having a nice rainy day fund of cash available quickly when you need it. Matt and I talk about this all the time.

Rule 3: Human capital
This was interesting, the article suggests that you not only look at risk but also the stability of your job when considering investment risk.

Rule 4: Borrowing
It essentially says to borrow cautiously. View debt as a necessary evil.

Rule 5: Housing
Says to not fall into the trap of viewing your house as a no-risk investment.

Rule 6: Diversification
Suggest a really close look at diversification.

Rule 7: Retirement
Retiring early is NOT easy to do.

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