I'm a professor at the UChicago School of Social Service Administration, as well as a regular contributor to publications including the Washington Post, the Nation, New Republic, Politico, and the Atlantic. My new book "The Index Card: Why Personal Finance Doesn’t Have to be Complicated" (co-written Helaine Olen) explains 10 simple rules for managing your money—all of which can fit on a single 4x6 index card. Got personal finance questions? Ask me anything.

Additional links:

It’s time to take a look at the index card with all the financial advice you’ll ever need | Washington Post

New book presents personal finance advice in 10 simple rules | UChicago News

The Index Card: Why Personal Finance Doesn’t Have to Be Complicated | Amazon

My Proof:



I have to break off--a doctoral student is waiting for me. I will come back and respond to remaining questions later. Thank you so much for your attention and the great questions. I am actually very passionate about this subject. It's great to see so many of you taking this seriously at a younger age from what I did.

Comments: 929 • Responses: 74  • Date: 

diegojones4199 karma


There has been a lot of talk about eliminating the interest and tax deduction for home ownership. Do you think that will ever happen? If so, would buying a home be worth it?

Harold_Pollack349 karma

I don't believe this will be eliminated, but it may be capped. I would certainly support such a policy. Subsidies for home ownership are quite costly, have a terribly regressive impact, and distort people's choices to own rather than rent, and to assume large mortgages. Buying a home would still be worth it, though people would probably be less ambitious at the margin in borrowing to buy a nicer home.

diegojones443 karma

Thanks for the reply.

Harold_Pollack65 karma

You're welcome!

Harold_Pollack156 karma

Here's a question from me to redditors -- what should my next index card book be about?

GISP118 karma

Why should anyone buy your book, when all they need to know is on a single 4x6 index card?

Harold_Pollack193 karma

Some items on the card are self-explanatory--e.g. never buy or sell individual stocks. Others require some explanation or help in the execution. I can tell you to commit your financial professional to a fiduciary standard. You may need some explanation regarding what the heck I am even talking about. We tell people to buy a home when they are financially ready. How do you know you are ready? And so on.

Arthur Ashe once upset Jimmy Connors to win the US Open. Reporters asked Ashe how he did it. Ashe responded: "I hit the ball low." The reporters complained: "Everyone knows you're supposed to hit the ball low against Connors." Ashe responded: "But I actually did." There was some skill and experience that came in useful there.

youdounderstand92 karma

Thanks for doing an AMA, Harold!

This is a bit embarrassing, but I have close to 10k just sitting in a bank account... I'm a tad overwhelmed by all of the options out there so I keep procrastinating instead of actually doing anything about it. What should I do with my savings? How do I go about doing whatever should be done?

Can't wait to read your book!

Harold_Pollack120 karma

You are $10k ahead of many people. That's a useful foundation and allows you to follow a scientific war-plan without managing your daily cash flow. I would consider how you can start saving for your retirement through your employer or a Roth IRA. And make sure you have no credit card debt.

branwall83 karma

Hello Prof. Pollack! I'm currently a fresh-out-of-college consultant making a decent income for the first time in my life. Expenses are low for me, and I know it's a good time to put away some extra savings. In particular, I'm looking to save for a down payment on a house. What should I do to wisely invest this savings?

Harold_Pollack124 karma

That's great. This is a great time in your life to save a large proportion of your income and to live below your means. I would emphasize your 401(k) first--at least up to the level of employer match. Make sure to pay off all high-interest debt such as credit cards. You want to save 20% down payment on a house, plus a nice emergency fund. I would be pretty conservative with that component of your saving and emergency fund. Your first three months' expenses should be in save short-term securities. Once you have that, you might mimic the asset allocation in a target date 2016 fund as a pretty reasonable approach.

soccerkyle146 karma

I'm applying to the University of Chicago his year. Can you write me a letter of recommendation?

Harold_Pollack291 karma

Three questions: --Please document your expertise in quantum mechanics and Urdu. --Identify at least one project you have conducted that has reduced infant mortality in at least one country. --Identify at least one translation error in Proust's Swann's Way. Feel free to compare common translations.

PresMarkle43 karma

What is the most important piece of personal finance advice you can give for a college student?

Harold_Pollack92 karma

On the spending side, mind your credit cards and other high-interest debt. You can live economically on most college campuses by paying a little attention and encouraging your friends to do the same. Make the most of your college years. Pick a coherent major that you are passionate about, and pour yourself into it.

Frentis32 karma

Hello Prof. Pollack

What is your view on, if personal finance should be taught in school? Either during high school, college or earlier? It is something I have come across quite often and it would be interesting to hear what your thought are on it.

Thanks for doing the ama!

Harold_Pollack60 karma

I would teach about personal finance--providing a tactile sense of basic budgeting at different income levels, credit ratings, the importance of avoiding credit card debt, the value of low-fee index funds, the importance of starting early to maximize the advantages of compound returns. Many financial literacy programs implicitly or explicitly encourage people to stock-pick. I would make sure that people get basic information on the dangers of trying to outguess the market.

Frentis10 karma

Great, thank you for the reply!

Harold_Pollack9 karma

You're welcome!

kwri9026 karma

If you had to add one line to your index card about paying off student loans, what would it be?

Harold_Pollack59 karma

No need to be super-aggressive paying off your student loans. The best single source of information is the Department of Education's website https://studentaid.ed.gov/sa/. I think it is terrific, and send people there. We talk in the book about some of the basics of consolidating loans, payment plans, etc.

Harold_Pollack54 karma

One of the most important things to remember on student loans is to "think federal first." And if you consolidate your loans, make sure not to mix federal and private loans. There are many protections on the federal side.

kwri9015 karma

Thanks, Harold! I appreciate it.

Harold_Pollack14 karma

You're welcome!

joyomiller24 karma

A penny saved is a penny earned ... You reap what you sow ... Money doesn’t grow on trees ...

What's your favorite financial advice cliché, and why?

Are there any out there that are untrue today even if they were relevant before (and if so, what are they)?

Harold_Pollack103 karma

My favorite cliches are two: "If it's free, you are the product." Really applies to financial professional advice. "If you sit down at a poker game, and you don't know who the sucker is--you do." Applies to many matters of finance and academic politics.

Animagi2720 karma

Hi Harold,

Does the advice in your book apply to people outside of America?

Harold_Pollack22 karma

Great question. I think the saving and investing advice apply, as does the advice to stick to simple market index funds. The mechanics of taxation and retirement saving will be different. Financial professionals will operate on different standards, but identifying equivalent of fee-only fiduciary advisors remains important. Our housing advice is probably contextual, though I stand by the warning that your home is a use-good not your primary investment.

otterscholar18 karma

Hi Harold! Your a really awesome researcher and you are selling your work short by not mentioning Crimelab/Becoming a Man and the other amazing stuff you've worked on. If you were to start a non profit dedicated to tackling one single issue, what would you try and move the dial on?

Harold_Pollack23 karma

Thank you so much. My colleagues Jens Ludwig and Roseanna Ander are the real stars there, along with our nonprofit partners. But I am very proud of my contributions there. Programs to assist the development of low-income youth would certainly be my focus if our book sells 10,000,000 copies. I also support the New Hope Center, which cares for my brother-in-law and others with intellectual and developmental disabilities.

kroening216 karma

hi Harold, thanks for taking the time to answer questions. if i could only choose one of the following, which should i do?

401(k) - 4% contribution with employer 2% match


Roth IRA - $2500-$3000 contribution (not able to afford max contribution)

Harold_Pollack33 karma

I would probably choose the 401(k) given the employer match. And at your current stage the immediate tax advantage may be most valuable. Both good options.

scoobertz13 karma

Hello Professor Pollack, I am a recent college graduate with minimum debt. Do you have much experience with stock futures? Would you suggest someone who is young and likes risk to look into that?

Harold_Pollack25 karma

No reason to get into any alternative or fancy security instruments like that. Unless finance is your full-time job or you have unusual personal circumstances, stick with the vanilla ice cream index funds. If you want to dabble, set aside some small amount, e.g. 5% of your portfolio, for playing.

scoobertz7 karma

Thank you Professor Pollack!

Harold_Pollack7 karma

You're welcome!

ngomong13 karma

Save 20% of your money

Can you elaborate on this? Do you mean in addition to or including money put into 401k, IRA, etc? For non-retirement funds, how much emergency savings do you recommend?

Harold_Pollack20 karma

That includes your 401(k) and related contributions. We recommend three-months living expenses in an emergency savings/strategic reserve. My life became much less stressful when I accumulated that reserve and wasn't constantly worried about cash flow or the possibility of a major car/home repair.

padamil10 karma

Thank you for doing this AMA. When you say max out your 401k, do you mean invest the max you can or the max that is matched? My company matches 100% for the first 3%, then 50% for the next 2. I am currently sending 7% for a total of 11%. Should I continue sending more into the 401k, or open an IRA with future investments?

Harold_Pollack13 karma

I would try hard to contribute to the point that you get every dollar your employer offers. And there's no need to stop there as long as you're below the legal limit. I'd go right up to the legal maximum, but I have a higher salary than you may have at your life stage. 401(k) often offers lower-fee investments than you can get on your own, with good fiduciary protections and tax advantages. Depending on your income, a Roth IRA may also be worth a look. Among other things this can be helpful with your child's college expenses. http://www.vox.com/2016/1/1/10644348/financial-new-years-resolutions

emaybe9 karma

I'm not sure what your experience is with low income folks, but I have a question that's been bugging me...

Backstory: My husband and I both work full time, but don't make much money (husband has a decent-paying "real" job, I'm a cook), and are investing what savings we might have in rebuilding our credit and keeping our ancient cars running so that we can get to work.

Question: I have $3,500 in student loans. Currently I'm on the Pay-As-You-Earn plan, which, based on our income, doesn't require a monthly payment. Would you recommend making payments on it when we can afford to do so regardless?

Thanks in advance, and sorry for the long-windedness. Brevity is not my strong suit.

Harold_Pollack6 karma

Great question. I would get human help on this one since the details are contingent. And double-check the Department of Ed website, of course.

MCbrodie9 karma

Professor Pollack, have you ever considered creating an free online course that would give general information on finance, at a college level, to students who are seeking an alternative learning experience? This skill set is largely ignored outside of a business background and I believe it should be more accessible to people. What do you think?

Harold_Pollack10 karma

I have thought about it, though I may not be the best person to do that. There is a huge set of needs.

repete662198 karma

There's an emergence in state sponsored retirement plans, including your own state of Illinois, for the private sector. Do you think state, or for that matter federal sponsored retirement plans (i.e. MyRA) are the future of retirement savings? Is there a danger having both Social Security and state sponsored plan assets in essentially the same type of investment?

Harold_Pollack4 karma

I think we'll see interesting ideas in this presidential campaign. I do expect to see innovations that will build on the basic concept, as we have done in Illinois.

yani_mason7 karma

Who or what inspired you to write your book?

Do you feel that many experts tend to over-complicate discussions regarding personal finance? If so, why?

Harold_Pollack15 karma

Let me answer in two pieces. I didn't pay too much attention to finances. I was sloppy about many things until I was about 40 and a recently-tenured professor. Then my mother-in-law died tragically, and her intellectually-disabled son needed to move into our home. My wife needed to leave the workforce to care for him, and we realized that we would live a different financial life from what we had expected. http://content.healthaffairs.org/content/25/1/231.full That set of family challenge got me to think much more seriously about financial planning. This NPR interview gives more details. http://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there

Harold_Pollack25 karma

Answer to "Do you feel that many experts tend to over-complicate discussions regarding personal finance? If so, why?":

Yes I do. There are complexities to personal finance. Certainly there are intricate details. But the right basic advice for most people is pretty simple. In many cases the research is complicated, but the practical bottom line is pretty simple. For example there is a huge literature documenting that individual investors are incredibly amazingly bad at picking stocks, and that almost all professionally managed mutual funds under perform a low-cost market index fund.

One fundamental problem is that the best financial advice is really boring. So financial media has often thrived on a business model that includes overly complicated and harmful recommendations. http://www.theatlantic.com/business/archive/2016/01/best-investing-advice-boring/423054/

joyomiller7 karma

I find the whole "finding a financial advisor" thing kind of overwhelming. I've been contributing quite a bit to my retirement since I graduated from college, but I haven't done much else. If you were to create an index card of what to look for in a financial adviser, what would make that list?

Harold_Pollack17 karma

A challenging subject. Financial professionals can give valuable advice. And it's often wise to have an extra pair of eyes on your financial plans. Unfortunately their business model often involves selling you investment products that cost too much. You want the advice but not the high-fee mutual funds or whatever.

The most important thing is to find a fee-only advisor who commits to a fiduciary standard in ALL of your dealings with them. Frey Hoffman and I produced a cute little video at fiduciarystandard.info which gives more information.

When fees are transparent, you will have to pay. $250 for an hour's time is pretty typical.

h0twired7 karma

Who are you voting for?

Harold_Pollack36 karma

I am a liberal policy wonk. I'll leave it at that for now. My arch-conservative family members lament my views, but they agree with everything on my card except the social insurance part. You can see many of my political and policy writings here, as well as those of Helaine Olen here. https://www.facebook.com/theindexcardguidetopersonalfinance/

emaciated_pecan6 karma

What credit card do you recommend for young professionals that has a low interest rate and good benefits?

Harold_Pollack21 karma

The interest rate should be irrelevant because you should pay off in full. I have an airline card since I fly southwest so much. Here's consumer reports. http://www.consumerreports.org/cro/credit-cards/buying-guide.htm

MarmosetJKM6 karma

I'm 25 and maxing my employer's Roth 401(k) contribution. Is a low cost index fund with 100% exposure to the S&P500 (like the Vanguard 500 index admiral) a reasonable risk to take at my age?

Harold_Pollack3 karma

Not bad, but a bit high. I would probably take 110 or 115 minus your age as a rough rule of thumb. Good job saving!

thedude3886 karma

Hello Professor Pollack,

I'm new to the investing game, but would you say index ETFs are a fair substitute for your advice of getting broad mutual funds? The only real difference I know between them is mutual funds seem to have higher fees (and some intraday trading impact which won't really affect me).

Harold_Pollack9 karma

These are pretty similar. I use low-fee stock index funds myself and don't particularly find any need for ETFs. The ability to swiftly move in and out of the market is a bug not a feature.

DieFledermouse4 karma

What do you think of automated investment websites like Betterment and WealthFront?

Harold_Pollack4 karma

I have not carefully researched that. In general I believe that automated sites and robo-advisors can be quite useful for many people, particularly low-net-worth folk with basic issues.

unlurkftw3 karma

Why do you suggest supporting social insurance programs is solid financial advice? Surely government run solutions are not the only way to address this problem and history has shown that these programs get raided for funds, leaving mountains of debt in their place. Thats not good financial advice for the nation, in my humble opinion.

Harold_Pollack59 karma

Although I am a diligent saver and investor, I would be bankrupt were it not for Medicare, Medicaid, and Social Security supporting my brother-in-law's extensive needs. I want to honor that aspect of my story, and not pretend that everyone could be as fortunate as a tenured university professor if we all simply followed good investment advice. We have to protect each other against serious life risks that could crush any one of us, were we forced to face these risks on our own. That's what social insurance means to me. I even made a political ad about that. https://twitter.com/chrislhayes/status/251716721210175488

GovernorOfReddit3 karma

With being a contributor to several well-known, quality publications, which publication do you feel offers you the best opportunity to get your message out? Which publication is the most fun to write for? Which publication do you think every American should subscribe to?

Thank you.

Harold_Pollack6 karma

That is like asking: "Which is your favorite child?" I will mention right now, my buddies at healthinsurance.org and American Prospect because their editors have been good to me, and they get a little less exposure than Atlantic, Washington Post, or Vox. I have great editors.

theseshoesrock3 karma

Good morning, Dr. Pollack. Thank you for providing such accessible advice. I have two questions:

If you've reached the income limit for Roth IRA contributions, but there isn't much in said Roth IRA, is the "back door" method of contributing worth the trouble, or should it be rolled over to some other method of retirement savings?

If you've built up a company pension that will pay you $2,000/mo upon retirement (assuming continued growth rates), and you leave the company, is it better to let the pension sit, or accept a buy-out and invest the money elsewhere?

Again, thank you for spreading your message!

Harold_Pollack5 karma

I would say that you should game these out with a fee-only fiduciary advisor and/or your accountant to see the full implications of these different choices. I fear I would give poor advice off the cuff given these intricacies. I generally am not a huge fan of buy-outs.

Justinhsb3 karma

Hello Harold. I'm trying to get a handle on how to think about saving for the future (house, another car, etc...) and at the same time, pay down student loans. My problem is that it seems overwhelming. I've got a 401 K and a small savings account, but i'm not sure how to put all these ideas together into a plan. Any advice on small steps to success?

Harold_Pollack13 karma

You don't have to solve these problems all at once. Be methodical. Live below your means. Make most of your savings automatic. One nice idea is to automatically deduct your paycheck into accounts you give a formal or informal name: The new house account, son's college account, and so on. Whatever gives you mojo. Emphasize your 401(k) for the long-run due to the employer match and the tax advantages. Life won't change overnight, but in a few years you will really things start to accumulate.

Lebo772 karma

Why should I trust a freshwater economist?

Harold_Pollack6 karma

Google my political and policy views ☺ .... Most of the advice I give would be well-accepted across the spectrum.

loanthrowaway98762 karma

Hi Prof. Pollack, My husband is a lawyer and has over $250,000 in federal student loan debt at 7% interest. It's a big shadow that hangs over us. Would you recommend paying it off as soon as possible, or prioritizing saving for a house and investing in the long-term?

Harold_Pollack3 karma

I would investigate opportunities at the Department of Education website regarding consolidation and payment plans. Don't prioritize paying this down over contributing to your 401(k), etc. Again I would find a human being to give more specific advice.

chtex752 karma

Does it make a difference how many savings/retirement products I use? I have a joint investment account, a roth ira, a 401k, and a pension (the pension is the only one that is matched and my contribution is fixed). Should I be concentrating on just one?

Harold_Pollack3 karma

No need for a large mix. Focus on low-fee index funds with a reasonable mix of stock and bond funds in each of these vehicles. It's great that you have a pension. That provides a wonderful (increasingly rare) foundation.

Harold_Pollack7 karma

I would add that you should pay attention to your overall portfolio and not allow the profusion of products to confuse things. I take it that you have a defined benefit pension. That should allow you to be more weighted in stocks than would otherwise be recommended. 95% of my savings are in a few investment products.

kevinrizzo102 karma


I know you aren't a big fan of 529 plans, but given that they are probably not going away anytime soon, do you see any changes that could help make them better? Either by limiting the benefits to high-income families or encouraging their use by lower income parents?

Harold_Pollack10 karma

A policy question! I would definitely limit the tax advantages to the affluent (either by capping the tax advantages to big accounts or by employing income limits). It is insane that top-10% families and higher get such a big tax break. I would also address the high fees in many 529 programs.

Matching programs to low-income parents are a great idea. Also limiting the administrative complexities for people, e.g. by simplifying the process of opening such accounts.

kevinrizzo103 karma

Thanks! I think the financial policy world is fascinating, I've been trying to read up on it. I liked your article on Obama's quickly retracted attempt to get rid of 529's. Good in theory, but bad policy in practice.

Harold_Pollack3 karma

You're very welcome! Thanks for noticing my article.

Taylor_OD1 karma

"Save 20% of your money"

Do you mean save 20% and then distribute that into different categories like retirement fund, savings account, other?

Harold_Pollack2 karma


SlagginOff1 karma

What are your thoughts on VULs?

Harold_Pollack5 karma

I like plain vanilla ice cream term life insurance.

Ipoopbabiez1 karma

Any advice you would give to someone considering applying to the university of chicago in a few years?

Harold_Pollack4 karma

Pursue a coherent course of study with challenging opportunities to follow your passion in a substantial way. And don't get your heart set on UChicago or any other specific school. Many excellent schools out there--of course we are one.

sonotimpressed1 karma

If I keep my credit card balance at 0 won't I never be gaining credit? Should you keep it around 25-35% to gain the most credit?

Harold_Pollack3 karma

Use your card transitionally and pay it off in full at the end of the month.

sleepybandit1 karma

I'd like to play devil's advocate a little bit. The US certainly has personal finance problems like large CC debt and poor saving for retirement. But I also admire the US taking risks (personally and financially) which overall has benefited the economy. I'll agree about maxing 401k & paying down Credit cards. But what do you think would be the impact of the US economy if everyone followed advice like "save 20% of your money"?

Harold_Pollack3 karma

Economy would be fine. We have instruments of fiscal and monetary policy to address the unlikely contingency that we become so thrifty that this damages the macroeconomy.

SupermansOlderBro1 karma

So, someone I know is very tempted to use a system called "infinite banking" and I need some solid evidence that I can use to try to talk them out of it. I believe it's basically a whole life policy that you can withdraw money from "interest free", but it sounds like a bunch of bullshit to me. I haven't read the fine print but this is the one he wants to use. http://createtailwind.com/

Any advice I can give them as to why it's a bad idea?

Harold_Pollack2 karma

Complex life insurance policies are rarely worth it. There is a ton of fine print. Stick to term life.

mog_knight1 karma


I have about 5k in savings and am saving. However, my credit score is around 680. I want to buy a new (or new to me) car by summer's end when new model years come out. Should I wait until my score hits 720 or higher? Secondly, what is a good down payment percentage? To be honest, I've always paid cash for a fixer upper that lasts me so I've never financed a car.

Harold_Pollack8 karma

You might check out your local bank or credit union and not conduct that transaction on the dealership floor. Finances make it harder to strike a good bargain. New-to-you is definitely the way to go. Consumer Reports has lots of good tips on sensible buying. http://www.consumerreports.org/cro/cars/new-cars/buying-advice/index.htm I honestly don't know how to predict moments in your credit score, and how long it takes.

Dire-Satire1 karma

Hi. I'm a 20 year old full time college student who works a part time job. People keep on telling me how a credit card is crucial for me to build credit for my future.. I would also want one with benefits. How important do you think credit cards are? Thanks.

Harold_Pollack6 karma

It's not a bad idea to have plastic. But the most important thing is not to run up credit card debt. And basically ignore your reward program. These lead many of us to spend money more carelessly.

holidayshoplifter1 karma

I have a little under $100,000 in student loan debt(Private Loan, Stafford, and Federal Loans). Two of my Private Loans are at 10% interest rate! Even when paying $1,000 a month for all of these loans, I'm barely making a dent each year. Can you please give a struggling young adult making 50K a year some financial advice on how to tackle this monthly expense? What are some options to make life easier for people in this situation?

Harold_Pollack1 karma

I am sorry that you have this tough situation. It is all too familiar. You definitely may want to consolidate, but this requires some care and human help. Your federal loans may be eligible for income-related repayment or other options. Go to the Department of Education website https://studentaid.ed.gov/sa/. That's a good source of unbiased information. Do not mix your federal and private loans when you consolidate, if you choose to do so.

JRP12901 karma

Hi Prof Pollack,

What do you think is a mistake/wrong idea about (personal) finance that is widely thought to be true in mainstream culture?

Harold_Pollack1 karma

One of the most pernicious ideas is that the prudent investor is someone who can identify a good company that makes a good product. The prudent investor is someone who methodically invests in a well-diversified portfolio for the long haul and has appropriate humility regarding the difficulty of out-guessing the market.

A second related idea is that this stuff is really complicated. Once you realize that simple index funds work really well, you can focus on your day job and on the important people in your life.

SkyLaRell1 karma

I'm about to move to take a tenure track professor job, but I only have $5000 in savings. Must I throw money away on rent as I save up $30K for a house down payment, or do I pay the extra money to buy a house right away?

Harold_Pollack8 karma

I would initially rent. You have more flexibility that way. You can learn about the area. You have more time to save your money. I wish that I had rented my first year living in Chicagoland. I might have made different housing choices. $5000 is not much of a financial reserve to move into a new house in any event. So lots of reasons to be a bit patient.

SkyLaRell1 karma


Harold_Pollack2 karma

You're welcome!

sub301 karma

Hi Professor Pollack,

My girlfriend is currently a student at U Chicago SSA, small world. Here's my question - she's undertaking a considerable amount of debt for what seems to be a small payoff (Social workers aren't exactly raking in the cash). I'm applying to U Chicago Law (get me off the Waitlist, please) where I would expect to undertake even more debt (though hopefully I can net some scholarship). Do you think there's a point where an education, even at a school like U of C, is not worth it? Do you profs laugh at kids like us?

Harold_Pollack9 karma

These are fair questions, which we take very seriously. We think about our student debt loads every day and expend a very large percentage of our budget on financial aid. Our students quite properly should hold us accountable for the value proposition we offer, and you should be clear-headed about your personal decision-making. My own wife is paying full-freight to become a medical social worker. We definitely feel the expense.

The work is important and worthy. And should be compensated more generously.

papervalleys1 karma

Hi Harold, Thanks so much for doing this. I have about 45k in student loans with a private lender. When I applied, I was naive and selected a variable interest rate, which is currently at 3.24%. I know these are bound to go up at some point so I'm looking to consolidate the two private loans I have and am being offered an almost 8% interest rate. Do I take that rate now, wait, or shop around?

Harold_Pollack3 karma

The right answer depends on specific details. Go to the Department of Education's website https://studentaid.ed.gov/sa/ for more specific information. You have a little time to make an informed choice. You probably need a little human help to make a good decision here. This seems manageable but worth the time to manage well.

Said_hmmm1 karma

I've never quite been able to figure out how to calculate the fees on my investment portfolio. i have a mix of ETFs through vanguard. could you give some guidance on what fields i should be paying attention to?

Harold_Pollack3 karma

Each fund should have a pretty clear notation for management expenses. Call or email Vanguard directly if you are having trouble finding it on the web resources.

Jrfitzny1 karma

Thanks for doing the AMA, professor.

Do you consider the 401k/ROTH contributions to be part of the 20% savings or are you suggesting an additional 20% in the bank?

Harold_Pollack3 karma

These definitely count towards the 20%.

Pajamazon_dot_com1 karma

You mention a lot about saving, and maximizing 401(k), etc. I'm self employed; do you have advice for those of us independent folks who don't have a 401 to match?

Thank you, also book and links are great!

Harold_Pollack4 karma

Thanks much. You can use something called a SEP-IRA. http://money.cnn.com/retirement/guide/selfemployment_sep_ira.moneymag These are great. I have one, which I use to save the maximum allowable percentage of my consulting income. Every time I get paid to write an article or something, I plop 20% into that. Make it automatic.

zytz1 karma

My employer matches up to 6% that we contribute to the available 401k or IRA plans. Currently I'm contributing 4% to each and my employer is contributing 3% to each... should I invest more heavily in one or the other?

Harold_Pollack3 karma

What kind of IRA is that? One key issue to consider are the management fees. Make sure your 401(k) and your IRA are both going into low-fee index funds. The answer is contextual. You might speak with someone in your employer's benefit office about the different considerations.

juggilinjnuggala0 karma

Good Morning, As a married man making not a whole lot of money, the wife and I have about 4 grand in savings, 2k in regular, 2k in a CD, what would be better zero/no risk options for this money?

Harold_Pollack7 karma

Your approach is pretty reasonable. At your current stage make sure to pay down high-interest debt. That is the highest risk-free and tax-free return you can get on your money. And examine your budget to see if there are some hidden opportunities to save.

juggilinjnuggala3 karma

actually have some debt, but it's all medical, The wife or I have never had a credit card or loans.

Harold_Pollack7 karma

It's great that you avoided high-interest debt. Good luck paying down that medical debt.