Recently I had to make some decisions about what to do with a significant amount of cash from an inheritance. I ended up putting it into an annuity. Generally, annuities are a bad idea. (“Bad” because the fees and fund expenses can eat up any tax advantages. Not true in my case, but I digress.)

Anyway, in talking with some folks about where to put this money, I was amazed at the number of otherwise very smart people who don’t have a clue about financial planning.

Once upon a time, I was like them. I didn’t have a clue either, and my financial strategy was “ignore it.” I was enlightened by none other than Scott Adams, in his book Dilbert and the Way of the Weasel. There’s a simple nine point plan, and like much of Adams’ work, amusingly simple. The points are:

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.