Financial Planning

I've been coming across quite a few articles celebrating a financial plan crafted by Dilbert cartoonist Scott Adams. Called the "Unified Theory of Everything Financial", here is Adams's nine-point plan:

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

This does seem to be pretty comprehensive to me. I would add disability insurance to the list, and perhaps health insurance belongs there as well. Six months of expenses in cash seems a bit high to me. But I suppose with folks like E-Loan paying a phenomenal 5.5% APY, we can go higher on the cash.

Saying this deserves the Nobel Prize in economics is certainly creative exaggeration. But it's useful advice, for sure.