Adams' "Unified Theory of Everything Financial"

[JayBee]

Scott Adams' formula was originally published in "Dilbert and the Way of the Weasels" at virtually the same time Princeton psychologist Daniel Kahneman was awarded the 2002 Nobel Prize. You will recall that Kahneman destroyed Wall Street's historic theory of the "rational investor." Dilbert made a complementary discovery, defining a weasel as "anyone trying to get away with something," thus explaining two centuries of psychological behavior on Wall Street where weasels have been misleading Americans with the false theory that investors are rational.

Unified Theory of Everything Financial

Quietly hidden in Adams' groundbreaking work is a financial formula so simple it rivals Einstein's E=mc2. In its original form Adams' formula was apparently so heretical and so explosive that no major house would touch it when he proposed publishing it as a one-page book. After initial rejections, he announced sadly that "if God materialized on earth and wrote the secret of the universe on one page, he wouldn't be able to find a publisher" either.

Fortunately for America's 95 million investors, Adams' secret nine-point formula was finally revealed in "Dilbert and the Way of the Weasels." Notice its simple brilliance in the exact reproduction of his formula:

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

Adams boldly states that this is "everything you need to know about personal investing." In just 129 words, nine simple points, one page you have the unabridged "Unified Theory of Everything Financial." That's it. Everything!

Thanks to Adams' formula, the average irrational investor can ignore Wall Street: "Everything else you may want to do with your money is a bad idea compared to what's on my one-page summary. You want an annuity? It's worse. You want a whole life insurance policy? It's worse. You want to invest in individual stocks? It's worse. You want a managed mutual fund instead of an index fund? It's worse.

(cut and pasted from article on MarketWatch.com by Paul B. Farrell)

Interesting theory, but I think all financial plans should have a part about investing funds in trips to LOS! Don't you agree?

[K2]

Originally Posted by JayBee

Interesting theory, but I think all financial plans should have a part about investing funds in trips to LOS! Don't you agree?

Adams - a Scot who knew what he was talking about! .... bit of a one off in this respect 5555

Spend less than you earn and invest the difference - that should make sure have enough available to indulge every now and then.

Nice post Jaybee.

[JayBee]

Originally Posted by K2

Spend less than you earn and invest the difference - that should make sure have enough available to indulge every now and then.

Einstein: E=mc(squared)
K2: Spend less than you earn and invest the difference.

By Jove, I think I've got it this time!!

Why didn't I think of that sooner?

[Maverick351]

I Think my TGF is a financial planner...like to do things with my money.

[Bushdoctor]

When your out-go exceeds your income, your up keep could be your downfall.