The world of finance is dizzyingly complicated, as you’ve no doubt had cause to reflect while reading in detail through one of those chunky terms and conditions documents your bank sporadically sends in the post. (You do read them in detail, right?) So you might be inclined to doubt the premise of The Index Card, a new book by the American finance journalist Helaine Olen and the academic Harold Pollack, which is that all you need to know about money management could fit on one side of a three-inch by five-inch index card. Their specific advice is US-centric, but the underlying principles apply wherever you are: try to save 10-20% of your money; pay off your credit card monthly; make full use of tax-protected saving allowances. Oh, and never buy or sell individual shares, because you’re not Gordon Gekko and you won’t beat the market. There are a handful more, but only a handful – and, come to think of it, if the index card argument’s right, isn’t it slightly cheeky to write a whole book on the matter?
But there’s a powerful truth here, which is that people dispensing financial advice are even less neutral than we realise. We’re good at spotting the obvious conflicts of interest: of course mortgage providers always think it’s a great time to buy a house; of course the sharp-suited guys from SpeedyMoola.co.uk think their payday loans are good value. But it’s more difficult to see that everyone offering advice has a deeper vested interest: they need you to believe things are complex enough to make their assistance worthwhile. It’s hard to make a living as a financial adviser by handing clients an index card and telling them never to return; and those stock-tipping columns in newspapers would be dull if all they ever said was “ignore stock tips”. Yes, the world of finance is complex, but it doesn’t follow that you need a complex strategy to navigate it.
There’s no reason to assume this situation only occurs with money, either. The human body is another staggeringly complex system, but based on current science, Michael Pollan’s seven-word guidance – “Eat food, not too much, mostly plants” – is probably wiser than all other diets. Happiness, too, may be as simple as prioritising experiences over possessions, relationships over achievements, and time over money. Yet we’re drawn to complex strategies because they enhance the illusion of control: we feel we’re grappling with important stuff, exerting agency. Plus, we like the idea of detailed, personalised solutions when, actually, just doing the same as everyone else might be best.
Most sneaky of all is the way complex advice fuels the belief that you can, if you’re clever enough, become as rich, healthy or happy as you like. But maybe you can’t. As Olen has long argued, much money-related stress comes down to a broken, insufficiently regulated system that stacks the deck against all but the super-rich. The bad news is that self-help tips alone will never fix that. The good news is that, given this pitiful state of affairs, doing as well as you realistically can is probably much simpler than you think.
