Preparing for a Rational Financial Planning Sequence

What fol­lows is a rough out­line for a pos­si­ble ra­tio­nal fi­nan­cial plan­ning se­quence that was in­spired by some other re­cent dis­cus­sion here. I’m not sure how use­ful this would be to how many peo­ple. I know there are some LessWrongers who would en­joy and learn from this; but I don’t know if there are 5, 50, or 500. If you’d like to read it, let me know. If 500 peo­ple tell me they can’t wait for this, I’ll prob­a­bly write it. If 5 peo­ple say maybe they’ll glance at it, then prob­a­bly not.

Part I: Pre­limi­nar­ies:

Fi­nan­cial Ra­tion­al­ity
Mul­ti­ply­ing un­cer­tain­ties
The in­side and out­side views
In­ter­po­la­tion is re­li­able; ex­trap­o­la­tion isn’t

Part II: This is im­por­tant:

  • Why to save for retirement

  • Dy­ing alone in a hole: the story of Jane.

  • Why com­pound in­ter­est is cool

  • 65-year old you will not want to live like a grad student

  • 65-year old you will not want to work like 35-year old you

  • Ex­is­ten­tial risk does not defeat per­sonal risk

  • Ex­is­ten­tial suc­cess does not defeat per­sonal risk

Part III: An­a­lyz­ing Your Life

(This sec­tion needs a lot more flesh­ing out, and thought)

Per­sonal satis­fac­tion and hap­piness: do what you love, and ad­just your fi­nan­cial ex­pec­ta­tions ac­cord­ingly
How much do you need to re­tire?
When do you want to re­tire?
How much do you need to live on to­day?
Big ex­penses you need to plan for
In­creas­ing In­come
Col­lege the best fi­nan­cial de­ci­sion you’ll ever make or the worst?
Choos­ing a ca­reer: what is your com­par­a­tive ad­van­tage?
Switch­ing ca­reers
Ca­reer De­ci­sions
equity vs salary; steady sin­gles or home run hit­ter
em­ployee or owner
Ca­reer Tac­tics
Salary ne­go­ti­a­tion
when to change jobs
Cut­ting Ex­penses
Save more to­mor­row

Part IV: The Prac­ti­cal How-to Ad­vice:

Emer­gency Cash
Credit cards: the good, the bad, and the crim­i­nal
Where to save (tax ad­van­taged ac­counts)
The im­por­tance of fees
401K match­ing: the high­est re­turn you’ll ever see
So­cial Se­cu­ri­ty
What to in­vest in (in­dex funds)
stock vs bond funds
do­mes­tic vs. in­ter­na­tional
tar­get re­tire­ment funds
Comic books are not a re­tire­ment plan (but a comic book store might be)

Avoid­ing huck­sters and doom­say­ers
In­vest­ment Ad­vi­sors
What if the shit hits the fan?
Can smart, ra­tio­nal in­vestors beat the mar­ket?
Good debt; bad debt
Cars and other ex­pen­sive pur­chas­es
Cut­ting out the mid­dle­man: mak­ing money on Craig’s list, ama­zon, eBay and AirB&B
Buy­ing a house­
Rent­ing vs. own­ing a house; rental par­i­ty
S­tu­dent loan­s
Health In­surance
Life In­surance
Auto In­surance
Your Spouse: the most im­por­tant fi­nan­cial de­ci­sion you’ll ever make
Di­a­monds are for­ever, but most women would rather have a house.
One or two in­comes?
Live longer, be hap­pier, get married


If there are any top­ics you’d like to see cov­ered that aren’t here (wills? lawyers? the fi­nan­cial press?), let me know. Similarly, if you think there’s a sec­tion that doesn’t be­long and should be dropped, let me know that too.

One caveat: while some sec­tions are fairly generic, oth­ers will be very U.S. cen­tric. The most spe­cific ad­vice will not be ap­pli­ca­ble to non-U.S. cit­i­zens and res­i­dents. That does limit the au­di­ence, but there’s not too much I can do about that. Per­haps if it’s suc­cess­ful I can seek out co-au­thors to do UK, Cana­dian, or other coun­try edi­tions.

A ques­tion for peo­ple who are in­ter­ested in fi­nan­cial plan­ning ma­te­rial: If this were available as a com­plete book (elec­tronic and pa­per) to­day, how likely do you think it is that you would buy this book in­stead of one of the other available books on the sub­ject? What would you pay for such a book? If this were available as both a book and a se­quence on LessWrong, how might that change your de­ci­sion?

For now, this dis­cus­sion thread is just a min­i­mum vi­able product (MVP) to find out if a se­quence is worth the time it would take me to com­plete. If the MVP pans out, I’ll write and post one or two of these chap­ters to fur­ther gauge in­ter­est. If the MVP doesn’t look promis­ing, I’ll drop it and move on to my next book idea.