WEBVTT - Money Simplicity Breeds Better Results #215 0:00:00.040 --> 0:00:02.600 Welcome to How the Money. I'm Joel and I am Matt, 0:00:02.720 --> 0:00:25.520 and today we're discussing money Simplicity breeds better results. Joel, 0:00:25.560 --> 0:00:27.600 would you be offended if I called you a simple name? 0:00:27.920 --> 0:00:29.440 I don't think so. No, I think I'll be all 0:00:29.480 --> 0:00:32.200 right with that. Well, because we have been talking about 0:00:32.240 --> 0:00:35.199 this episode, we know that simplicity is is a good thing. 0:00:35.640 --> 0:00:37.040 A lot of times when it comes to our money, 0:00:37.320 --> 0:00:40.440 complexity can be the enemy of what we actually need 0:00:40.479 --> 0:00:42.720 to do to make progress when it comes to our money. 0:00:42.960 --> 0:00:44.559 So I'm excited man, that we are going to talk 0:00:44.600 --> 0:00:47.480 about simplicity, how it plays a role in our personal finances, 0:00:47.960 --> 0:00:50.199 and how it is that we can go about simplify 0:00:50.280 --> 0:00:53.159 our money. Yeah, I completely agree. I think simplicity is 0:00:53.200 --> 0:00:55.000 far more important than we give it credit for in 0:00:55.120 --> 0:00:57.520 so many areas of our life. And so we're gonna 0:00:57.520 --> 0:01:00.040 talk about what simplicity brings to the table, how we 0:01:00.040 --> 0:01:01.960 can get rid of complexity as much as possible when 0:01:01.960 --> 0:01:03.920 it comes to how we handle our money, and how 0:01:03.960 --> 0:01:07.040 that actually does benefit us in a long run. And so, Matt, 0:01:07.120 --> 0:01:08.840 but you know what another important thing is when it 0:01:08.840 --> 0:01:12.440 comes to for our money, transparency. You like that see 0:01:12.480 --> 0:01:16.040 through cash well, so not actually see through cash, although 0:01:16.040 --> 0:01:18.040 that would be neat if that was possible. Or I 0:01:18.160 --> 0:01:19.960 used to have a credit card that was transparent. It 0:01:20.040 --> 0:01:22.279 was the first time Amex did the kind of clear 0:01:22.319 --> 0:01:25.919 transparent card, reminding that old school pepsi product Pepsi crystal 0:01:26.040 --> 0:01:30.120 or crystal pepsi whatever. Yeah, that's not natural. I like 0:01:30.200 --> 0:01:33.080 my high frucitose cords beverages to have some opaqueness to them, 0:01:33.120 --> 0:01:35.080 exactly right. I don't want to be able to see 0:01:35.160 --> 0:01:37.360 through that. But what I really wanted to get out 0:01:37.400 --> 0:01:40.800 with transparency is is how you know, the more we 0:01:40.920 --> 0:01:42.840 can understand, the more we know about the cost were 0:01:42.880 --> 0:01:45.759 incurring when we're buying something, the more we can understand 0:01:46.080 --> 0:01:49.640 whether it's worth it or not. And Matt recently on 0:01:49.800 --> 0:01:53.160 the show, we talked about getting increased financial aid. How 0:01:53.600 --> 0:01:56.080 you know students right now, if their household has experienced 0:01:56.160 --> 0:01:58.240 kind of a drop in income, that they can appeal 0:01:58.280 --> 0:02:00.760 for more financial aid from from school. And I just 0:02:00.840 --> 0:02:04.640 recently saw something about this, this website called tuition fit 0:02:04.760 --> 0:02:07.400 dot org and it allows students to upload their own 0:02:07.440 --> 0:02:10.560 financial aid award letters to see whether other people like 0:02:10.639 --> 0:02:13.480 them with the same academic profile and financial status could 0:02:13.480 --> 0:02:15.720 get a better deal from their school or from similar 0:02:15.720 --> 0:02:18.440 schools if they wanted to switch university. Yeah. So it's 0:02:18.480 --> 0:02:20.640 like basically, you upload it, you see what other people 0:02:20.680 --> 0:02:23.440 are paying for college, and you might realize, you know what, 0:02:23.560 --> 0:02:25.840 I'm getting a raw deal, and maybe I should consider 0:02:25.840 --> 0:02:27.760 transferring if I want to graduate with a whole lot 0:02:27.840 --> 0:02:29.840 less student loan debt. Nice man, I love that. I 0:02:29.880 --> 0:02:32.880 love the ability that we have now in pooling our 0:02:32.919 --> 0:02:35.800 information and our resources together. Uh, and in this case 0:02:35.800 --> 0:02:38.160 create a tool that students and in parents to other 0:02:38.200 --> 0:02:41.000 students who are oftentimes footing the bill, to to come 0:02:41.000 --> 0:02:43.680 together and see what is and what isn't a good deal. 0:02:43.840 --> 0:02:45.800 It also makes me think of what other areas in 0:02:45.800 --> 0:02:48.600 our life might a tool like this be be beneficial? 0:02:48.639 --> 0:02:50.679 You know, I'm thinking of maybe the largest expense that 0:02:50.720 --> 0:02:53.160 a lot of people have, which is their homes. How 0:02:53.200 --> 0:02:55.480 cool would it be if we could upload the quote 0:02:55.520 --> 0:02:57.120 that we received from some of these different lenders and 0:02:57.240 --> 0:02:59.639 maybe compare that to other quotes that others received to 0:02:59.760 --> 0:03:03.720 have a similar just a gross income, maybe maybe similar 0:03:03.720 --> 0:03:06.600 credit score exactly. Yeah, And so like, I think it 0:03:06.600 --> 0:03:08.800 would be really beneficial there. I could see it also 0:03:08.919 --> 0:03:12.000 being awesome. Maybe even in healthcare, like what are you 0:03:12.040 --> 0:03:13.960 paying for health insurance? And what kind of quotes are 0:03:13.960 --> 0:03:17.520 you receiving on certain procedures, because there's are really things 0:03:17.560 --> 0:03:19.359 we talk about because a lot of times, at least 0:03:19.360 --> 0:03:21.760 when it comes to healthcare vis it's like it's not 0:03:21.800 --> 0:03:23.280 that big of a deal. You don't really think about it, 0:03:23.280 --> 0:03:25.639 but it all adds up, you know, and so you 0:03:25.680 --> 0:03:28.160 don't really think about it because it just feels kind 0:03:28.160 --> 0:03:29.720 of petty to be like, hey, how much do you 0:03:29.720 --> 0:03:32.200 guys pay to go for a wellness check out for 0:03:32.200 --> 0:03:34.200 your one year old? You know, like that's not really 0:03:34.240 --> 0:03:36.600 something I've asked you, but actually that's is something we 0:03:36.600 --> 0:03:38.880 should talk about. But certainly when it comes to bigger 0:03:38.920 --> 0:03:41.880 expenses like mortgages, I could really see that being valuable. Yeah, 0:03:41.880 --> 0:03:43.600 and it seems like it's been valuable for the roughly 0:03:43.640 --> 0:03:47.080 six thousand people that have uploaded their profiles on tuition 0:03:47.120 --> 0:03:49.280 fit dot org. Yeah, so for our listeners who are 0:03:49.280 --> 0:03:51.760 currently in college or have a kid in college and 0:03:51.760 --> 0:03:55.040 they're looking to see if the school they're currently enrolled 0:03:55.040 --> 0:03:58.200 at can increase, you know, the allocation of funds their way, 0:03:58.480 --> 0:04:00.480 or they're potentially looking to go to another their school 0:04:00.480 --> 0:04:02.360 in order to save money. I think this website can 0:04:02.360 --> 0:04:04.320 be some help, so we'll we'll be sure to link 0:04:04.360 --> 0:04:06.000 to that one in the show notes. Yeah, man, we 0:04:06.000 --> 0:04:07.960 will definitely do that. Let's go ahead and introduce our 0:04:08.040 --> 0:04:12.520 beer for this episode, which is called Let's see Scorpius Morchella. 0:04:12.800 --> 0:04:15.160 Is that how you say that? You think? I think so. Yeah. 0:04:15.760 --> 0:04:18.880 This is another one by Toppling Goliath, which was donated 0:04:18.920 --> 0:04:21.400 to the show by Kelsey again up there in Iowa. 0:04:21.440 --> 0:04:23.560 So Kelsey thinks again for sending this one our away. 0:04:23.560 --> 0:04:25.680 And we're gonna share our thoughts on this beer at 0:04:25.680 --> 0:04:27.719 the end of the episode. Yeah, we will. But let's 0:04:27.720 --> 0:04:32.120 get onto money, simplicity, breeding better results. Matt and Yeah, 0:04:32.160 --> 0:04:36.000 we're talking about simplicity and finances today because learning how 0:04:36.000 --> 0:04:38.560 to simplify your approach to your money, it really is 0:04:38.560 --> 0:04:41.760 a game changer. Right. Our lives have so much complexity already. 0:04:41.960 --> 0:04:44.279 Most listeners out there probably have two, maybe three different 0:04:44.279 --> 0:04:46.960 email accounts on your phone. That alone can feel a 0:04:46.960 --> 0:04:50.680 bit overwhelming as notifications just continue to pop in emails 0:04:50.680 --> 0:04:52.880 from work, personal emails, all sorts of things. Even just 0:04:52.920 --> 0:04:55.400 talking about it right now has been a little sweating 0:04:55.440 --> 0:04:58.159 under the brow. I have five different email accounts. That's 0:04:58.279 --> 0:05:00.080 that's way too many for the five different lives that 0:05:00.240 --> 0:05:04.520 lead the different families you have. Stuff like that just 0:05:04.560 --> 0:05:08.159 getting Yeah, and the more complex our our lives get, 0:05:08.600 --> 0:05:12.240 the more of those seemingly beneficial things tend to drain us. Right. 0:05:12.320 --> 0:05:16.640 Email initially gives us this ability to connect and to 0:05:16.720 --> 0:05:19.280 write people when we need to, But when we have 0:05:19.440 --> 0:05:22.120 multiple accounts that we're having to check on on a 0:05:22.240 --> 0:05:24.520 daily or hourly basis, it begins to feel like it's 0:05:24.520 --> 0:05:27.080 too much. That's certainly true of technology, but the same 0:05:27.080 --> 0:05:29.440 can be true of our finances. The more complicated the 0:05:29.440 --> 0:05:31.640 approach that we take to our money, well, the more 0:05:31.720 --> 0:05:33.200 likely the wheels are going to come off as we 0:05:33.240 --> 0:05:36.080 bagged the system altogether down the road. Yeah, man, I 0:05:36.120 --> 0:05:37.880 like what you said about it being draining, you know, Like, 0:05:37.920 --> 0:05:40.920 how is it that technology is actually making us more 0:05:40.920 --> 0:05:44.120 exhausted when it's purpose should be to make things easier 0:05:44.160 --> 0:05:46.279 for us? Also, how is it that with so many 0:05:46.320 --> 0:05:50.000 different great financial tools and products at our disposal, so 0:05:50.040 --> 0:05:52.560 many people are having a difficult time getting ahead with 0:05:52.560 --> 0:05:55.839 her money? Um, I think it's because they're overwhelmed, you know, 0:05:55.880 --> 0:05:59.279 we have too many complex options available to us, and 0:05:59.320 --> 0:06:02.160 it's actually keeping us from doing the right things. So 0:06:02.279 --> 0:06:05.960 we'll highlight the importance of simplicity and discuss how to 0:06:06.080 --> 0:06:10.080 make your personal financial life a winning mix straightforward yet 0:06:10.200 --> 0:06:13.760 thoughtful actions. Yeah, that's the goal, right, Simplicity breeding something 0:06:13.800 --> 0:06:16.599 that that isn't too dumb down, that we're not effective, 0:06:17.040 --> 0:06:18.680 but that it makes it easier for us to actually 0:06:18.720 --> 0:06:21.480 do the things that need to get done. And yeah, this, 0:06:21.640 --> 0:06:23.760 I would say, Matt is kind of the financial version 0:06:24.120 --> 0:06:26.239 of a recent episode that we had with Joshua Becker 0:06:26.279 --> 0:06:29.320 where he came talk about minimalism, right, yea yeah, And 0:06:29.360 --> 0:06:31.400 in that combo we talked about the kind of clarity 0:06:31.680 --> 0:06:34.520 that owning fewer things can bring. Well, the same thing 0:06:34.560 --> 0:06:36.480 is true when we're talking about our money. We'll have 0:06:36.480 --> 0:06:38.720 heightened clarity, the ability to achieve things that we might 0:06:38.720 --> 0:06:42.440 have not thought possible if we prioritize simplifying things. And 0:06:42.440 --> 0:06:43.920 I'm seeing this more and more of my own life 0:06:43.960 --> 0:06:46.320 as I get older. Our financial lives tend to get 0:06:46.320 --> 0:06:48.720 more complicated, which can bmudy the waters and distract us 0:06:48.720 --> 0:06:50.839 from the tasks that we truly need to focus on. 0:06:50.880 --> 0:06:53.200 Whether their money related or not. And this actually makes 0:06:53.240 --> 0:06:55.960 me think about you know, a professor I don't remember 0:06:56.000 --> 0:06:57.680 his name off the top of my head, but he 0:06:57.880 --> 0:07:00.320 developed like this, this index card. He wrote, aything you 0:07:00.320 --> 0:07:03.159 need to know about finances in just this one little place, 0:07:03.279 --> 0:07:06.000 and it kind of became this viral sensation. People are like, oh, really, 0:07:06.000 --> 0:07:07.840 all you actually need to know can fit on this 0:07:07.920 --> 0:07:10.760 index card. Yeah, and and in so many ways it's true, 0:07:11.320 --> 0:07:13.760 when we're taking a simple approach, the things that we 0:07:13.840 --> 0:07:16.480 actually really do need to know can fit on an 0:07:16.480 --> 0:07:18.160 index card. It's kind of funny though. He ended up 0:07:18.200 --> 0:07:22.080 writing a book about it later and like the opposite 0:07:22.120 --> 0:07:25.200 of the whole premise of the card exactly. I thought 0:07:25.240 --> 0:07:27.280 that that was really funny that he turned it into that. 0:07:27.560 --> 0:07:30.560 But it's true. You know, there isn't this this incredibly 0:07:30.600 --> 0:07:33.520 wide breadth of information that we need to have knowledge on, 0:07:33.640 --> 0:07:35.600 you know, Like one of the benefits of simplifying is 0:07:35.600 --> 0:07:38.520 that we're able to narrow our focus on the areas that, 0:07:38.680 --> 0:07:40.920 you know, where we can have a deeper impact. Um. 0:07:41.080 --> 0:07:43.160 You know, there are many different ways to invest your money, 0:07:43.160 --> 0:07:46.240 but it takes a long time to feel that you've 0:07:46.280 --> 0:07:48.560 mastered how to invest well. You know, I could certainly 0:07:48.640 --> 0:07:52.120 learn about commercial real estate investing, but because of like simplicity, 0:07:52.120 --> 0:07:55.760 I'm gonna stick with single family homes residential investing inside 0:07:55.800 --> 0:07:58.680 a limited geographic area. And instead of learning how to 0:07:58.720 --> 0:08:02.080 trade options, maybe shorting stocks, becoming an expert commodity trader 0:08:02.440 --> 0:08:04.840 that I think you can handle that one. I probably could. 0:08:04.960 --> 0:08:07.160 Maybe I don't know. I like to overcomplgate stuff. I 0:08:07.200 --> 0:08:09.000 could think that these are ways that I'm gonna outperform 0:08:09.080 --> 0:08:11.040 the market in the coming years. But instead I'm gonna 0:08:11.080 --> 0:08:13.280 stick to the index funds that I know are going 0:08:13.360 --> 0:08:15.920 to do well. They're gonna mirror the entire stock market. 0:08:16.200 --> 0:08:18.239 And you know, you can't really go with a simpler 0:08:18.240 --> 0:08:20.920 approach than that. Yeah, simple as can be, that's for sure. 0:08:21.160 --> 0:08:24.520 I think to simplicity, Matt, it can breed confidence. Right 0:08:24.760 --> 0:08:28.000 through simplifying, you're gonna have a thorough understanding of the 0:08:28.040 --> 0:08:30.240 things that you do per take in. It feels so 0:08:30.280 --> 0:08:33.200 good to actually understand where you're putting your money and 0:08:33.320 --> 0:08:35.880 why you're doing the things that you're doing. And in fact, 0:08:36.080 --> 0:08:39.079 people can get into real big trouble when they don't 0:08:39.160 --> 0:08:42.160 fully comprehend the financial products that they're participating in. That's 0:08:42.160 --> 0:08:44.439 where scames and rip offs come into play. Well, we'll 0:08:44.440 --> 0:08:46.559 talk about that in just a minute. And also too, 0:08:46.600 --> 0:08:49.720 it's where we get taken advantage of by salespeople who 0:08:49.920 --> 0:08:53.520 want to sell us products that are more expensive than 0:08:53.720 --> 0:08:57.240 they're much simpler versions that we can easily understand and 0:08:57.240 --> 0:09:00.400 purchase ourselves. And one major example of that something like 0:09:00.440 --> 0:09:02.560 life insurance. Yeah, that's right, man, that's why we like 0:09:02.920 --> 0:09:05.720 term life insurance is pretty simple. And you know, no 0:09:05.760 --> 0:09:08.400 one's looking to sell you a term life insurance plan 0:09:08.480 --> 0:09:10.240 because there's not a whole lot of money involved in it. 0:09:10.280 --> 0:09:12.960 You're not gonna get ripped off. It does exactly what 0:09:13.040 --> 0:09:16.280 you wanted to do, which is provide benefits, provide a 0:09:16.280 --> 0:09:18.800 payouts in case you die. Right, that's what you need 0:09:18.840 --> 0:09:20.520 life insurance to do. Yeah, And there are all these 0:09:20.559 --> 0:09:23.800 complicated types of life insurance that muddy the waters we 0:09:23.920 --> 0:09:26.680 need that include investing inside of your life insurance policy, 0:09:26.760 --> 0:09:28.200 and those are the things you want to stay away from. 0:09:28.240 --> 0:09:31.240 There too complex that even really fully understand for most 0:09:31.240 --> 0:09:32.800 of us at least, that's right. And so we're talking 0:09:32.800 --> 0:09:35.439 about the benefits of simplicity. Another way that we can 0:09:35.520 --> 0:09:38.680 talk about those benefits are by talking about the drawbacks 0:09:38.800 --> 0:09:41.360 of complexity. We'll get into some of those right after 0:09:41.400 --> 0:09:51.720 the break. All right, Matt, we're back from break. We're 0:09:51.720 --> 0:09:55.000 talking about simplicity in the importance of keeping your personal 0:09:55.040 --> 0:09:57.240 finances simple, and to kind of drive that point home, 0:09:57.280 --> 0:09:59.640 let's talk about some of the problems that come when 0:09:59.800 --> 0:10:02.959 we do increase the level of complexity when it comes 0:10:03.000 --> 0:10:05.120 to our personal finances. There are a lot of drawbacks 0:10:05.120 --> 0:10:07.079 when things get out of hand and things become too 0:10:07.120 --> 0:10:09.640 complex in our personal lives when it comes to our money, 0:10:09.920 --> 0:10:12.400 and one of those big problems is in action. Right, 0:10:12.440 --> 0:10:14.760 we we tend to avoid doing things that are overly 0:10:14.760 --> 0:10:17.719 complicated or that we perceive to be too difficult. One 0:10:17.720 --> 0:10:19.760 of the reasons I think that people hate thinking about 0:10:19.800 --> 0:10:23.440 their personal finances or sometimes even getting started budgeting or 0:10:23.440 --> 0:10:25.400 anything like that when it comes to their money is 0:10:25.400 --> 0:10:28.439 that they imagine or they believe that it's too complex. 0:10:29.000 --> 0:10:30.920 There's just too much to think about, and so then 0:10:31.000 --> 0:10:32.480 we just tend to throw up our hands and stop 0:10:32.520 --> 0:10:34.520 thinking about our money at all. And if we do that, 0:10:34.640 --> 0:10:37.000 it's highly unlikely they were actually going to be in 0:10:37.000 --> 0:10:39.680 a strong position financially. If we've just thrown our hands 0:10:39.720 --> 0:10:41.880 up and said no way. But if we're able to 0:10:41.960 --> 0:10:44.200 keep things simple, then the likelihood that will be able 0:10:44.240 --> 0:10:48.000 to take action to increase our debt, slashing our our 0:10:48.040 --> 0:10:51.360 savings accounts and and wealth building efforts, well, the likelihood 0:10:51.400 --> 0:10:53.440 goes way up that are actually going to do something 0:10:53.480 --> 0:10:56.880 and get started and start to positively impact our financial future. 0:10:57.000 --> 0:10:59.240 And this is such an important point, right, the fact 0:10:59.280 --> 0:11:02.160 that when things get complicated, we resist them, and I 0:11:02.200 --> 0:11:04.800 think that the vast majority of folks kind of fall 0:11:04.840 --> 0:11:07.760 into this, into this boat. However, there's a flip side 0:11:07.760 --> 0:11:10.560 to it, right there is the potential that complexity can 0:11:10.640 --> 0:11:13.839 cause you to take too much action. With complexity, you're 0:11:13.880 --> 0:11:16.000 in the risk of your finances maybe taking up too 0:11:16.080 --> 0:11:18.480 much of your time, maybe you get obsessed with it. 0:11:18.880 --> 0:11:20.480 If you're the type of person who likes to give 0:11:20.480 --> 0:11:23.400 something you know, or someone who maybe focuses on the 0:11:23.440 --> 0:11:26.920 details too much, then an overly complicated financial life has 0:11:26.960 --> 0:11:29.600 the potential to dominate your life. This is, you know, 0:11:29.679 --> 0:11:32.320 the opposite of inaction, and this is where it takes 0:11:32.360 --> 0:11:34.560 over your life. Things can get really out of whack 0:11:34.559 --> 0:11:37.240 if you're devoting way too much of your time towards money. 0:11:37.440 --> 0:11:39.040 You know, even if you do try to, you know, 0:11:39.120 --> 0:11:42.040 make it sound responsible or sophisticated by calling it, you know, 0:11:42.120 --> 0:11:45.640 your personal finances, it's still just your money. And so 0:11:45.720 --> 0:11:47.600 we try to approach our money in a way that 0:11:47.720 --> 0:11:50.680 is balanced. You know, we know the importance of handling 0:11:50.679 --> 0:11:53.520 our money well now, but we also don't want that 0:11:53.559 --> 0:11:56.640 to become what characterizes our life. If that becomes all 0:11:56.679 --> 0:11:58.640 of who we are, then that's maybe an example of 0:11:58.679 --> 0:12:01.240 having won the battle that law the war. Yeah, basically, 0:12:01.240 --> 0:12:03.440 then money has taken all the way over and that 0:12:03.520 --> 0:12:06.760 complexity has basically ruined our lives as we let money 0:12:06.760 --> 0:12:09.440 become the number one priority. And I wanted to share 0:12:09.480 --> 0:12:11.439 that one specifically to man because that's kind of a 0:12:11.480 --> 0:12:13.559 personal struggle of mine. You know, like we kind of 0:12:13.640 --> 0:12:15.880 joke about how I over complicate things and make things 0:12:16.000 --> 0:12:19.480 overly sophisticated, and I analyze stuff way too much, get 0:12:19.640 --> 0:12:22.480 way too bogged down into the details. And on one hand, 0:12:22.520 --> 0:12:24.800 like it is good to have those details, but on 0:12:24.840 --> 0:12:26.920 the other hand, if you let it get carried away, 0:12:27.400 --> 0:12:29.720 then it's going to be something you find yourself having 0:12:29.760 --> 0:12:32.560 to kind of push back against, uh in the future. 0:12:32.600 --> 0:12:34.840 So just a little warning there, yeah, Yeah, And I 0:12:34.840 --> 0:12:38.880 think so. Another thing about complexity to Matt is that complexity, 0:12:38.880 --> 0:12:41.760 at least on the surface, can seem impressive. A lot 0:12:41.800 --> 0:12:45.160 of financial products, apps, or philosophies can seem flashy, but 0:12:45.240 --> 0:12:48.679 then underneath the surface they don't actually offer much reward. 0:12:48.960 --> 0:12:52.000 There might be very little that was really gained because 0:12:52.040 --> 0:12:56.160 this out of complexity is often accompanied by higher fees. So, 0:12:56.240 --> 0:12:58.199 for example, there are all sorts of high priced investment 0:12:58.200 --> 0:13:00.080 funds that you could stick your money in. You can 0:13:00.120 --> 0:13:03.280 talk to some smart people that make them sound like 0:13:03.440 --> 0:13:06.400 they're totally worth their money, that they're going to outperform 0:13:06.559 --> 0:13:08.640 the market as a whole, or that you're just dumb 0:13:08.640 --> 0:13:10.600 if you're not going that route right and and and 0:13:11.000 --> 0:13:13.600 seeing that complexity just on its face can make it 0:13:13.640 --> 0:13:16.319 seem like, well, if I take the simple route, maybe 0:13:16.320 --> 0:13:19.200 I'm the stupid one. Maybe I don't actually understand, and 0:13:19.240 --> 0:13:22.480 that lack of understanding causes us to actually feel drawn 0:13:22.600 --> 0:13:25.040 to the more complex offering. But having all of your 0:13:25.080 --> 0:13:27.360 assets in one to three low cost funds that you 0:13:27.360 --> 0:13:30.960 can actually understand, it's so much better. Right. It's not flashy, 0:13:31.160 --> 0:13:33.840 but it works. And there's this quote from Paul Samuelson. 0:13:33.920 --> 0:13:35.880 He says investing should be more like watching paint dry 0:13:35.960 --> 0:13:38.160 or watching grass grow. If you want excitement, taking a 0:13:38.240 --> 0:13:40.360 Hunter Bucks and go to Las Vegas. And I totally 0:13:40.440 --> 0:13:43.080 agree with that. Right, Simplicity might be boring, but at 0:13:43.160 --> 0:13:45.320 least you can wrap your mind around it, and that's 0:13:45.320 --> 0:13:47.080 something that works. Like to be able to be a 0:13:47.080 --> 0:13:49.600 good investor, we have to be able to look past 0:13:49.640 --> 0:13:52.760 the things that on the surface look impressive, they sound smart, 0:13:52.880 --> 0:13:54.559 but if we can't fully understand them, if they're too 0:13:54.600 --> 0:13:57.080 complex for us to get our minds around, then it's 0:13:57.120 --> 0:13:59.320 something that we really shouldn't be partaking in. Yeah, it's 0:13:59.360 --> 0:14:03.080 easy to overpay, get charged these unnecessary fees when it's 0:14:03.200 --> 0:14:06.439 something that's complex and you don't understand it. Complexity, man, 0:14:06.520 --> 0:14:09.000 it also makes us more susceptible to scams or even 0:14:09.080 --> 0:14:11.080 just bad products that are out there when we don't 0:14:11.160 --> 0:14:13.960 understand what's going on. Right. Uh, there's an article every 0:14:13.960 --> 0:14:16.680 week in some newspaper around the country about maybe a 0:14:16.679 --> 0:14:19.920 Ponzi scheme, you know, being vested up. Investors were promised 0:14:19.960 --> 0:14:24.040 astronomical returns for trusting a certain individual with their net worth, 0:14:24.200 --> 0:14:26.880 and yet almost always that money was spent to enrich 0:14:27.080 --> 0:14:29.880 that person until everything comes tumbling down like a house 0:14:29.880 --> 0:14:32.960 of cards. If instead we decided only to invest in 0:14:33.040 --> 0:14:36.120 ways that we can fully understand, like simpler ways, then 0:14:36.160 --> 0:14:38.200 we make it much less likely that we'll get taken 0:14:38.200 --> 0:14:41.200 in by these get rich promises. Yeah, it's not necessarily 0:14:41.200 --> 0:14:44.120 stupidity that causes people to invest with someone who's running 0:14:44.120 --> 0:14:47.080 a Ponzi scheme. Oftentimes it's just a desire to to 0:14:47.160 --> 0:14:49.200 do something good with their money, but it's something that 0:14:49.200 --> 0:14:51.760 that seemingly complex that they can't understand, and it seems 0:14:51.760 --> 0:14:55.400 appealing for precisely that reason, right, But ultimately, actually posi 0:14:55.440 --> 0:14:58.240 schemes are are super simple. It's it's usually someone just 0:14:58.400 --> 0:15:01.160 completely bilking you of of your money and running off 0:15:01.160 --> 0:15:03.440 with it, which is obviously terrible. And actually one of 0:15:03.440 --> 0:15:05.640 my favorite authors, Matt ben Carlson, wrote a book called 0:15:05.640 --> 0:15:08.000 Don't Fall for It about It's this brief history of 0:15:08.040 --> 0:15:10.840 financial scams. I'm reading it right now. It's really crazy 0:15:10.920 --> 0:15:12.840 to see the different things that people fall for. We're 0:15:12.840 --> 0:15:14.720 gonna have him on the show soon, which I'm excited about. 0:15:14.960 --> 0:15:16.840 That's gonna be a great interview coming up in the 0:15:16.960 --> 0:15:20.080 upcoming months. Yeah, and but it's not always scams, right, 0:15:20.120 --> 0:15:22.600 Sometimes it is just bad products and and it just 0:15:22.640 --> 0:15:25.920 makes me think of like home warranties or extended warranties, 0:15:26.040 --> 0:15:27.960 and these are the sorts of things that we're super 0:15:27.960 --> 0:15:30.640 susceptible to buying. It might cost us fifty bucks on 0:15:30.680 --> 0:15:33.000 a new TV that we purchased, or bucks on a 0:15:33.040 --> 0:15:35.840 home that we bought. Those things add up, but oftentimes 0:15:35.840 --> 0:15:38.400 those products aren't really worth the money we've paid for them, 0:15:38.560 --> 0:15:40.720 not even close, right, And if you look at the 0:15:40.720 --> 0:15:42.280 mice type on a lot of those things, there are 0:15:42.320 --> 0:15:45.080 many issues with that potential product that aren't covered. There 0:15:45.080 --> 0:15:47.200 are deductibles that you have to pay in order to 0:15:47.240 --> 0:15:50.520 get your item fixed. On their surface, they're touting something 0:15:50.640 --> 0:15:54.600 really easy, but underlying is something really complex that costs 0:15:54.640 --> 0:15:56.440 a lot of money and doesn't really offer you much 0:15:56.480 --> 0:15:59.040 in return. And Jel, we wanted to share one other 0:16:00.200 --> 0:16:03.880 drawback of complexity, and and that is of rigidity. Another 0:16:04.000 --> 0:16:07.280 downside to complexity might be that you're more likely to 0:16:07.320 --> 0:16:10.120 be inflexible, maybe when it comes to how you budget 0:16:10.360 --> 0:16:12.800 you created this machine. You know, like this process that 0:16:12.840 --> 0:16:15.960 you adhere to no matter what you're a robot. And 0:16:16.040 --> 0:16:18.400 while in some cases this can be a good thing, 0:16:18.480 --> 0:16:21.080 you know, like sticking to the plan, right, Like, if 0:16:21.160 --> 0:16:23.400 something comes up, you stick to the plan, You bide 0:16:23.440 --> 0:16:25.600 by the rules that you set forth. But like, this 0:16:25.680 --> 0:16:27.760 also doesn't really leave you for a lot of room 0:16:27.800 --> 0:16:30.160 to be a little more spontaneous and to actually enjoy 0:16:30.440 --> 0:16:32.320 the fruits of your labor. And I'm thinking about the 0:16:32.360 --> 0:16:34.680 stimulus checks earlier this year, like how many people just 0:16:34.760 --> 0:16:36.960 kind of took that check, plugged it into their machine, 0:16:37.000 --> 0:16:39.240 into their budgeting machine, and just kind of absorbed it 0:16:39.720 --> 0:16:42.200 without ever really seeing the results of that. Right, on 0:16:42.200 --> 0:16:43.960 one hand, I think that that's a good thing, right, 0:16:43.960 --> 0:16:46.280 like maybe at least ten or that at the very 0:16:46.360 --> 0:16:48.640 least was invested. But on the other hand, you know, 0:16:48.640 --> 0:16:50.480 could you have maybe spent some of that money in 0:16:50.520 --> 0:16:53.360 a way that kind of moved the needle for you emotionally, 0:16:53.440 --> 0:16:55.120 you know, like that could have gone a long way, 0:16:55.480 --> 0:16:57.560 maybe even as a sort of a morale boost. And 0:16:57.600 --> 0:16:59.680 this is another one of these drawbacks that I kind 0:16:59.680 --> 0:17:02.320 of straw with myself. Man. You know, it's easy for 0:17:02.320 --> 0:17:05.040 for some to become obsessed with their personal finance and 0:17:05.080 --> 0:17:07.680 you know, and their budgeting systems, the different spreadsheets that 0:17:07.680 --> 0:17:10.800 they've created over the years that direct where their money goes. 0:17:11.440 --> 0:17:13.359 Um But at the same time, they can also suck 0:17:13.400 --> 0:17:15.639 the fun out of lots of other areas in our life, 0:17:15.800 --> 0:17:17.680 you know. And it can also prevents you from being 0:17:17.680 --> 0:17:21.120 more generous as well. There's lots of different personal drawbacks 0:17:21.160 --> 0:17:23.199 that you know on the service you would say, oh, no, 0:17:23.240 --> 0:17:26.040 that's important to me, But are you actually going to 0:17:26.080 --> 0:17:28.000 do those things or are you slave to these systems 0:17:28.000 --> 0:17:29.879 that you've created. I wanted to mention this one because 0:17:30.080 --> 0:17:32.960 while oftentimes we do, you know, to how the benefits 0:17:33.000 --> 0:17:35.800 of budgeting and creating these different systems, there can be 0:17:35.800 --> 0:17:37.720 a dark side to it as well. Yeah, I think 0:17:38.000 --> 0:17:40.880 we were made to run budgets, not to let budgets 0:17:40.960 --> 0:17:43.280 run our lives, right, And I think that's kind of 0:17:43.280 --> 0:17:45.720 what happens sometimes when we let it become too complex 0:17:45.760 --> 0:17:49.000 and overbearing. Is we let the budget run us even 0:17:49.040 --> 0:17:51.040 when we want to make shifts in our own lives. 0:17:51.080 --> 0:17:53.840 Let's say we want to change jobs, we want to 0:17:54.080 --> 0:17:55.960 work in a completely different sector, we want to start 0:17:56.000 --> 0:17:58.800 our own business, and yet we have this rigid formula 0:17:59.040 --> 0:18:01.080 that we have to max out a roth ira every year. 0:18:01.240 --> 0:18:02.679 And you know what if I keep doing that I'm 0:18:02.720 --> 0:18:04.479 not gonna be able to launch my own business. I'm 0:18:04.520 --> 0:18:06.440 not gonna have the capital, the startup capital in order 0:18:06.480 --> 0:18:08.239 to do that. And that would be a case right 0:18:08.280 --> 0:18:11.119 where complexity gets in the way of the bigger, more 0:18:11.119 --> 0:18:13.320