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Making the Most of Your Money

I keep coming across an interesting problem. People say they want things to be simpler — investing, life insurance, retirement planning, etc.

But when a simpler (and effective) option is proposed, they reject it as too simple.


In most of the money situations I’ve come across, the best solution is almost by definition the simplest. (Note: I didn’t say the easiest.)

So why don’t we go for simple?

1. We don’t believe it will work.

We’re attracted to complexity because anything that requires a lot of something — time, details, money — should work, right?

By default, if it’s simple, say only two steps instead of ten, we think we’re missing out.

2. We think simple should be easy. hand beg money parent grandparent kid give money help bank coin share

It’s like the guy who goes to the doctor and says he doesn’t feel well.

There must be something wrong with him that a pill could fix.

But all the doctor says is, “Get more sleep, eat healthier food and exercise three times a week.”

It’s the simple solution, but it’s not easy.

3. We like tradition.

We get used to how things should look, work, act, etc. (Think of dishwashers; they all basically do the same thing.)

So any time we see something that’s too different from what we’re familiar with, we treat it with suspicion.

And if we’ve come to expect that money options should be complex, we’re going to be wary of anything simple..

The result?

We paint ourselves into a corner.

This is one of the reasons that you have to go back to the A.T.M. to find the most recent revolution in the personal finance industry. 

We need to see more revolutions, not fewer.

Simple and Ally are both examples of simpler banking, but I don’t see Bank of America or Chase disappearing any time soon.

I had this exact discussion with a friend who complained about earning zero interest on her money at the bank she always used.

I showed her a few of the new, simpler banks.

But despite the fact that a two-year CD was paying a lot more than the zero she was earning, she didn’t want something new.

So she keep complaining.calculator coin money save debt

We’ve got to come to grips with the reality that simple and incredibly effective financial solutions are right in front of us.

But they may look different.

To get there, we need to change our mindset, for example, from day trading to systematic investing in low-cost mutual funds.

It’s time to stop assuming that complexity will solve your problem when a simpler option may solve the problem and save you a headache.

About Carl Richards is a Certified Financial Planner and a columnist for the New York Times, Morningstar magazine and Yahoo Finance. He is author of 2 books, The Behavior Gap & The One-Page Financial Plan. Carl lives with his family in Park City, Utah. You can find his work and sign up for his newsletter (which has an international audience) at
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