PERSONAL FINANCE MICRO LESSON
“finance is 9 steps. in order. that's it.”
The Lesson
Burton Malkiel (author of "A Random Walk Down Wall Street") wanted these 9 points in his book. The breakthrough: they're IN ORDER. (1) Make a will. If you have family or money, decide where it goes. (2) Pay off credit cards. It's like a guaranteed 18% return. (3) Term life insurance. Not whole life (sucker's play). (4) Max retirement accounts. 401k matches are free money; IRAs are designed to beat alternatives. (5) Buy a house. But it's consumption, not investment (not diversified). (6) Build 6-month emergency fund. For when coronavirus hits. (7) 70% in stock index funds. Buy the S&P 500 (SPY), never individual stocks. (8) 30% in bonds. Safer, lower returns, adjust ratio by age. (9) Use discount brokerage. Not advisors (they're legal ripoffs).
Real-World Example
A 28-year-old founder says "I'm raising a seed round to disrupt the taxi industry!" The mentor asks: "Do you have a will? Credit cards paid off? Term life? Retirement maxed?" They don't. "Then you're not ready to risk capital on a startup. You're on step 1. Founders who skip steps end up broke when their company fails. And most do fail."
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