“Simple is nearly always better. But if it’s going to be complicated, then make sure the problem is worth the complexity. A great deal of time is wasted creating complex solutions to relatively unimportant problems.”
I wouldn’t describe investing as an unimportant problem, but it is in a certain sense a solved problem. Investors today can quickly and easily get access to a wide swath ot the global capital markets at nearly zero cost. You can argue, any many do, that this is in some sense sub-optimal but they are usually doing so because they are talking the book.
We all like to think we are unique. But as Brett & Kate McKay at AOM write:
We’d rather try complicated methodologies we’ll never stick with, than humbly admit that, because we’re just as human as the next guy, the boring, ordinary, tried-and-true solutions apply to us, too.
Fighting against complexity isn’t easy. We are often rewarded for making things more complex than they need to be. However when it comes to your money the less complexity, the better. Automating your finances as much as possible helps. This may be boring but it provides you the opportunity to do things with your life you couldn’t otherwise.
