Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains. – Steve Jobs

Sometimes it’s easy to overthink and obsess about the smallest of details. Considering that I’m constantly looking for small things to gain an advantage in life, I probably sweat the small things more than I’d like to admit. The reality is that we could all be insanely successful by simply focusing on a few simple things, so long as we appropriately define the things that we’re focusing on.  There are hundreds of sayings and principles that relate to focusing on a few important variables. Here are a few that immediately popped into my head:

  • Keep It Simple Stupid
  • Don’t sweat the small stuff
  • Occam’s Razor
  • The 80-20 Rule
  • Less is More
  • Don’t use a lot where a little will do

I’m a huge fan of the 80-20 rule for the fact that it eliminates noise and allows us to focus on the few variables that really matter.  I’m continuously shocked when I hear people discuss how they are saving so much money by cutting out a few cups of coffee out of their budget, as if they’re going to accumulate massive wealth saving $30 or so a month (ok, maybe you spend more than $30 on coffee).  My point is that saving money by not drinking coffee is fine, but in order to see major changes you need to look at the few variable that make up the majority of your budget. Rent/mortgage and transportation costs literally will be half of the money most individuals spend, but it seems most people would rather focus on small changes that hardly make a dent in their budget. As important as those two variables are, there’s one variable that is even more important than those two for budgeting. The answer is your income. If you focus on increasing your income, spending less on housing and transportation, and putting as much as you can into a tax advantage savings account like a 401k or IRA, you likely will have minimal financial stress. All you need to do is identify those few variables to improve and focus on them. That’s it.

This post wasn’t meant to be about financial advice, it was meant to be a way to simplify practically any issue, which likely will result in more success in our lives and much less stress. Truthfully, I have no financial stress, and while I track our family’s net worth religiously, I don’t budget for small things, because I think focusing on increasing my income is the most important factor in budgeting. I’m not knocking people who pinch pennies, but if it’s at the expense of not focusing on increasing your income, then pinching pennies is a misguided strategy.

People who get second and third jobs to add additional income drive me nuts too. Focus on making your main job better! I know it seems like a long term solution, but it is much more logical to try to maximize the income from one job rather than spreading your time over 3 different jobs, because your main career likely has the most earning potential. You only have so many hours in the day, so you need to learn to maximize the time that you do have rather than working like a dog to scrape by.

Why is it so difficult to simplify?

Simple is often harder than complex, as Steve Jobs pointed out in the quotation at the top of this post. The reason why simple is harder than complex is because it requires an individual to clearly identify the problem and all of the most important variables that contribute to the problem or the solution. It’s much easier to identify any variable that makes an impact and simply attack it. This is why coffee being cut from a budget or getting a second job makes sense to some people. When isolated, those changes do help a financial situation in the short term, but in the long run they can actually be harmful to true financial peace, because they allow an individual to take action without fully thinking the situation through.  The return for the amount of effort simply isn’t there.

I wrote a post about why not compulsively checking emails is so difficult for most of us. The main reason why we love to check our emails is because it stops us from having to prioritize. If we just respond to every email as it comes in, we never have to ask ourselves if this is really a good use of my time. Is this the most important thing that I could be spending my time on right now.  So it saves some thinking up front, but in reality can lead to a massive amount of stress as more and more people send emails to you to help them accomplish THEIR goals and priorities.  You need to define your most important 3-5 priorities and make time to get those done. Any more than 3-5 and you’ll likely feel too stressed to be effective in getting those tasks completed.

Another reason why simplifying is difficult is because you need to first understand what variables are the most important variables. You can’t choose the most important variables without understanding how each variable impacts your objectives. For budgeting, it’s easy. Cash inflows vs. outflows is very quantifiable. What do you spend the most on and where does most of your money come from? This is very simple, so identifying the most important variables is very simple. Other areas, quantifying which variables are most critical may not be so simple, but with a little work, it’s likely not too difficult to define.

How can we make sure that we have simplified correctly?

Knowledge is the accumulation of information, while wisdom is the ability to find the most critical variables in that information.  I use this concept when reading books. I often can read an entire book that I couldn’t stand, but find a few paragraphs that pay for the book ten times over. You need to figure out how to do this same thing in all areas of your life. Here are a few things that I recommend to do in an effort to simplify and focus on the most critical variables:

  1. Think before you act – Don’t overthink, but you do need to think. Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe”.  Running out and trying to cut down a tree with a dull axe is how I view cutting coffee from a budget and getting a second job to increase income. They’re both going to make some progress, but sharpening the axe first likely is the best option, and it only takes a small amount of time to identify that.
  2. Identify the problem clearly – Identifying the problem or the goal is the most important part of solving a problem. After the problem is identified you may want to consider if it’s even worth trying to resolve. Just because you ran into an issue once doesn’t mean you need to prepare for it in the future. Can you potentially delegate or outsource the problem? Also, sometimes goals change and maybe something you thought was super important to figure out, no longer is that important to you anymore.
  3. Gather information – This is easier today than it has ever been. If you want to know what makes up an average household budget in the US, you can simply type it in on a search engine and get an instant answer.  There are unlimited books on practically every subject to gather information. There are books on how to gather information. If a problem is important enough for you to spend time resolving, it should be important enough for you to read a book on the topic.  It’s very important to gather information because you need to feel confident that you have identified the most important variables for achieving your desired result. If you’re not confident that you have the right variable, it can lead to constant second guessing of the actions you are taking to resolve a problem.
  4. Identify the most critical variables – This is easier than it seems to identify the most critical variables once you have gathered some information on the topic. I’ve already done it in your financial life. Consider your health, for example. Your diet, exercise, and sleep are probably the most important variables.  Again, using a simple search on Google should help you identify the most important variables for practically any issue. If that doesn’t work, you may have to collect your own data, or use common sense to define the most critical variables.
  5. Focus only on those variables for improvement -Some people will get hung up on tiny details which is distracting to the main goal. I used to work with a woman who had an air purifier in her office because she was worried about pollution, yet she smoked cigarettes regularly. Don’t be like her, focus on the most important variables. You’re going to feel less stress and become much more successful if you follow this simple steps. Be disciplined in your approach, and you’ll expend less effort for better results.

I can’t emphasize enough how important I believe it is to not over-complicate issues. I posted on my Facebook page a few weeks ago that “we often know what we have to do, or we know what we have to do to know what we have to do”.  My point is that we typically distract ourselves from achieving great things by throwing insignificant details into the mix or spreading ourselves too thin. Be careful what you give your attention to, and focus on the things you carefully deemed to be critical. If we can do this, I’m confident we’ll all be on the path the success. Thanks, as always,  for reading, and remember to be great today!

Robert Krickeberg

 

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