Comment by j_lev | Hacker News Reader

Comment by j_lev | Hacker News Reader

Of course, choosing stocks/index funds/mutual funds/hedge funds/asset allocation/tilt/tax-minimization/etc all only come into play after everything else is in order.

I refer most people who ask to Dilbert's 9-Point Plan, which Scott Adams originally published in 2002 but has been reproduced many times all over the Internet eg

https://retirementplans.vanguard.com/VGApp/pe/PubVgiNews?Art...

If you can't click through, here's the list:

Everything you need to know about financial planning

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 401(k) to the maximum.

5. Fund your IRA to the maximum.

6. Buy a house if you want to live in a house and you can afford it.

7. Put six months’ expenses in a money market fund.

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.

"What to invest in" is only answered in #8, which you shouldn't even think about until you've worked through the previous 7 steps. Yes, write that damn will already!

Naive question: why is a will so important?

If you have kids then you get to specify somewhat how you want them to be raised.

Regardless, it is believed that you owe it to the people you leave behind to be clear with your intentions. People dying intestate is a massive drain on society, and it often brings out the worst in people.

Of course, the opposing argument is "yeah but I'll be dead so what do I care?" and to be honest it's hard to argue with this.

If I may give a couple of my own personal reasons:

1) It's not that hard. My first one was written at a "Will Writing Party" where no-one had kids, so we all just either left everything to our partner or to be divided up among our siblings. One guy had neither so his estate was bequeathed to his parents, and if they were no longer alive to everyone in attendance at the party (except one poor person who was to be the witness and therefore excluded from being recipient to the estate). For most of us the will we wrote at that party served us until we married.

2) It forces you to think about "the end." Stephen Covey first highlighted the importance of "beginning with the end in mind," and it's something that everyone just puts out of their mind as long as they are able.

Also in my case, I married someone for their child-raising skills rather than their ability to climb the corporate ladder (not that these are mutually exclusive), and sitting down to rewrite a will forced me to think about the added cost of term life insurance because I was taking her prime marrying years from her, and I don't want to leave her unable to remarry and only suited for unskilled labor with no cushion. My wife is also a basket case with investments so you can have some say in that regard too.

3) It forms evidence if you have to show proof of your commitment to someone. In my case our respective wills formed part of the evidence when applying for my wife's visa.

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