Are You A Good "KISS"er?

When It comes to money, simplicity equals clarity. And results. 

When I’m surrounded by a bunch of people who work in the finance industry and/or tech industry, I usually want to shout out “Why does everyone need to make this all so complicated?!”.

When it comes to saving & investing, the ever-evolving lexicon of buzz words and acronyms can make anyone feel a little crazy…or lost…or overwhelmed…or all of the above.

In the thick of it all, I can’t help but think about “the KISS principle”: 

Keep It Simple, Stupid!

Why make it complicated? 

Complexity is the best way we know how to fool both ourselves and others.

The more complex the investment, the faster you should run away. Complex products are designed to be sold, not bought.
— Larry Swedroe, Think, Act, and Invest Like Warren Buffett

Complexity is confusing and when people don’t understand the fundamentals, it’s easier to sell them things they don’t need. It’s also easier to convince ourselves that what we’re doing is rational, well thought out and logical.

Complexity also makes what we do sound more important than it really is when we really boil it down to the essential. That’s what many of us want to believe, at least in our respective fields. Who can blame us? It feels good to feel smart.

Wouldn’t it be refreshing to shed complexity?

Complexity has its place, but not when we’re trying to get to what’s essential. Noise clouds our ability to identify what’s fundamental to why we do what we do and why we make the decisions we make.

[T]he financial press isn’t so keen on stories of people who’ve made sound investment decisions over four decades, paid down their debt, created a diversified portfolio, and reached their retirement goals on time or even a little ahead of schedule. Those stories don’t sell magazines or have a very high click-through rate.
— Carl Richards, p. 168, The One-Page Financial Plan

I’d love to see us go the “simple route” with most of what we do. We could spend more time having real conversations about what matters most about what we do, as opposed to the mechanics of how we go about doing it. We could talk about the why and not the how of things. 

“Why” conversations are the most powerful conversations we can have. Every single one of these conversations I have with friends, family and clients are both rewarding and memorable. 

Why do we avoid “WHY” conversations?

Fear. When you shed the complexity, you feel naked. Exposed. It’s raw. It’s uncomfortable.

But it’s also the most productive state we can be in because we start thinking and making decisions about what’s essential to living the way we want to live in all aspects of our lives, and how we use money to do it.

How to KISS Your Money

That’s why I love reading anything by Carl Richards, including his new book: The One-Page Financial Plan. While the book provides more information on the fundamentals that drive financial planning, keeping it simple comes down to working through five steps:

  1. YOUR VALUES: Figure out what you really care about and why.
  2. YOUR BEHAVIOUR: Review how you save/spend/invest now and be real about it. 
  3. REALITY CHECK: Does your saving/spending/investing align with what you say you care about? Understand your mistakes so that you can avoid repeating them.
  4. CHANGE: Identify the changes you need to make to have your behaviours match your values:
    • Spend more/less/differently
    • Save more/less/differently
    • Invest more/less/differently
    • Work more/less/differently
    • Play more/less/differently
    • Learn more/less/differently
  5. NIKE: "Just do it." Make the changes. If you need help, seek out a trusted advisor or coach who understands the importance #1 and #2 and how he or she can help.
Few financial decisions are set in stone. At some point, we’ll all need to recalibrate, taking into account new circumstances that change our decisions. Too often we get caught up in thinking that this recalibration is a sign we made a mistake. Hardly. We just have a life.
— Carl Richards, p. 66 of The One-Page Financial Plan

Bonus Step - 6. REPEAT!: Repeat steps 1 through 5 as needed. Going through these steps at least once a year is absolute gold. It keeps us focused and ensures periodic course corrections on a regular basis and life, or what you want out of it, evolves.

No action plan sticks unless we’re crystal clear about why we do or should do something. That’s why there needs to be purpose behind every action. Anything else is just unnecessary noise.

What about you? Are you a good KISSer?

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