Simplicity is Money in Underatted

Our behaviors drive our success more than the most optimized form of investing

Simplicity is Money in Underatted
Photo by Nik / Unsplash

Did you know that 48% of people carry a credit card balance?  Meaning that they pay interest on a card every month.  Did you know that according to a US Household Survey done in 2022, only 37% of Americans can cover a $400 emergency? Alert: this is more of a rant.

So often, when I peruse the different social groups I’m in on personal finance, I notice people debate what’s better, traditional or Roth, Paying off debt or fully funding retirement.  The list goes on and on.  So much so that I wouldn't know what to do if I were a new person coming into the space.  We want to debate advanced personal finance techniques when most people carry a credit card balance and spend more than they make.  If you can’t do those two things, who cares about "velocity of money"?  

Whenever someone asks these advanced technique questions, I give a long-winded, super nuanced answer but what matters most is the plan that you stick with.  It doesn’t matter if you pay off debt or save for retirement.  Both are great!  Well, Nate, according to the Math…. I don’t care!  According to the math, if you save zero, that’s zero, and that’s what most folks are doing because they are paralyzed that they are going to make the “wrong” choice so they do nothing.

If you aren’t saving, save.  Please put it in a savings account or contribute to your workplace retirement.  Get a little education.  I encourage JL Collins' Simple Path to Wealth for Investing and Jesse Mechams's You Need a Budget or Total Money Makeover by Dave Ramsey for budgeting.  Each has simple steps and plans that aren’t easy but simple to follow.  After you get more “educated,” maybe you will start looking at different things, but if you don't no biggy you will already be infinitely better than most "smart" investors. 

In Conclusion

If you haven’t started, simplify it if you are chasing the latest investing fad.  Stop and streamline it if you are debating the most optimized way to invest but haven’t invested in anything.  Stop and simplify it.  Complexity kills growth.  So simplify.


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Updated 3/3/24