K.I.S.S.

I had a great time recording a few podcast episodes with Cole yesterday. As the producer, he rarely appears behind the mic, but it's a rare treat when he does. We recorded an episode reacting to ChatGPT's criticisms of our show. It was a great time!

One of the criticisms stood out: "Simplified Solutions: Complex financial problems are sometimes presented with overly simplified solutions, which might not address the nuances of individual financial situations."

I loved this one.....because it's true. I do, in fact, attempt to make things simple. While some people have truly complex situations, most complicated situations are merely the consequence of people making them complex. People don't intend to make their finances complex, but that's what happens when we don't get a formal education on the topic; we're figuring it out on our own and adding pieces as time passes. If left unchecked, our finances will always become more complex.

For that reason, my first coaching meeting with a client includes mapping their financial life. What lives where, and why. Often, people's financial lives are a complicated web that requires a decoder pin to interpret. Once we get it mapped out, I attempt to re-map it.....but simpler.

Here's an example of a family I recently met with. This is what their financial accounts looked like:

• His checking account (from his single days)

• Her checking account (from her single days)

• His savings account (again, from single days)

• Her savings account (again, from single days)

• Joint checking account

• Joint savings account

• His current 401(k)

• Her current 401(k)

• Her former pension

• Her old 403(b)

• Her old 401(k)

• His old 401(k)

• His other old 401(k)

• His other other old 401(k)

• His other other other old 401(k)

• His other other other other old 401(k)

• Her old brokerage account that a family member set up for her

• His Roth IRA that he started when he was in college

• His Robinhood account, where he trades stocks

• Her whole life insurance policy that was set up when she was a baby.

That's not even all of them, but I'm tired of typing and you're probably tired of reading. See what I mean? It's complex, and unnecessarily so. There's a lot going on. In order to get right with their money and not have it suck the life out of them, they needed to simplify. Here's where we landed:

• Joint checking account (all income and expenses run through it)

• Joint savings account (emergency fund)

• His current 401(k)

• Her current 401(k)

• Her new Traditional IRA (where we rolled her former pension, 401(k), and 403(b) into)

• His new Traditional and Roth IRAs (where we rolled all his old 401(k)s and Roth IRA into)

• Their new taxable brokerage account (where we rolled her old taxable account, his Robinhood, and the proceeds from her canceled whole life policy)

Without anything inherently changing in their financial lives, they felt freer. It was simple. The money was invested well. They had fewer logins. They knew where everything was. They understood its purpose. It was simple.

Simple is good. When in doubt, simplify. Then, simplify some more.