Rule #1: People are Dumb! KISS for Financial Success

People are dumb. There is not much we can do about it either.

I am not talking about IQ or book smarts. I am talking about common money sense and the many other facets of common sense.

I had a professor of physical chemistry in college that had 2 rules in life. The purpose of these rules is not to make society look like a dump but to encourage people to live outside the rules.

Rule #1:  People are dumb

Rule #2: Marry for Money

My professor was not one for long winded rules. He was very fair and understanding even allowing unlimited time during exams with candy supplied for fuel. He hit the nail on the head with Rule #1.

When it comes to money people are generally pretty dumb. They make it, they spend it all, and then wonder where it all went.

How is it even possible to make $100,000 or more and still live paycheck to paycheck?

The answer must be people are dumb.

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People Are Dumb

I am sure you have met someone that has made bad money decisions ending in skyrocketing debt. Probably, if you are honest with yourself, you have been dumb with your own money in the past. I know I have.

Personal finance is really a simple subject matter. You add your income and subtract your expenses and the sum should be greater than zero.

Income – Expenses >= 0

If this is not the case, you are being dumb. Period! The reason people have a hard time keeping track of this simple equation is that they are emotional.

Emotional decisions cause you to lose track of where you are and any budget you had before. Any reasoning you were following is just thrown out the window. The worst part of it all is that the media, advertisements, businesses and the like are all trying to get you to make emotional decisions because they know that is the best way to get you to spend your hard earned cash.

Think about TV commercials for a minute and how they draw you in.

A marketer’s job is to create a sense of urgency or a sense of emotional attachment in those short 30s available for a TV ad to make you feel like you need to buy something. If they just said here is my product, decide for yourself whether you think you need it or not, they would never sell anything.

The talking heads on 24-hour news coverage love to talk about the stock market and speculate on it going up and down. Emotional responses to the talking heads get people to buy high and even sell in a freefall to “get out” before the bottom hits. This is the complete opposite of what you should be doing. The talking heads have drawn you into their trap of making emotional decisions about your money.

I know how hard it is to not make emotional money decisions, but it is possible to break the cycle.

All you need to do is KISS.

KISS to Become Smarter

Keep it simple stupid. (KISS)

The KISS method is the best way to not fall prey to emotional decisions. The more complex the system you devise, the more chances there are for it to fail. This is true of any system.

As a chemical engineer, I see systems fail on an almost daily basis. The primary cause of failure, complexity. The system I control at work has 1500+ control points that control hundreds of motors and valves. The system is all to produce one simple product out the end. In this case, it is as simple as possible, yet still complex.

Another rule of thumb that you learn as an engineer is:

Fixing things is easy, figuring out the problem is the hard part.

The more complex the system, the more difficult it is to troubleshoot and figure out what is actually wrong. The simpler things are, the easier it is to find problems and develop solutions.

When dealing with a simpler system, like your personal finances, you can have a much simple, easy to follow plan. The simpler the plan, the simpler the solution, the more likely it is to succeed. Unneeded complexity only leads to failure.

So What is a Simple Money Plan?

Money plans should be simple and easy. Let’s go through a simple money plan.

Tracking Your Financial Metrics

It all starts with tracking your finances. Check out Personal Capital for a great platform to start tracking your finances on. It’s free and has all the tools for you to succeed.


After you start tracking your spending, you need to create a budget. Follow the below equation and you will be successful.

Income – Expenses >= 0

For more help with starting your budget check out these posts:

Pay Yourself First

By paying yourself first, you are making saving a priority. This allows you to build up that emergency fund that you have been delaying, save for retirement, save for that house you are dreaming of, etc. Make sure every paycheck has a part allocated to yourself and strive to increase it as time goes on.

Invest Your Savings

Investing is as complicated or as simple as you make it. Want to keep it simple?

Invest in large index funds at a reputable brokerage firm like Vanguard, Fidelity, Ally, etc. Put your savings into the mutual funds each month and continue with blinders on to the media.

Remember, you are in it for the long game. Short term gains and losses can be exhilarating or painful depending on the direction, but they really don’t matter over the long term. They are just noise.

Long Term Plan

The last step to a simple money plan is to have a long term plan. When do you want to retire? What big purchases do you see on the horizon? The answers to these questions help you to shape your budget and your habits to get you to where you want to go.


In the end, you just want to develop a money plan and stick to it. Keeping it simple will keep more money in your pocket and out of the pockets of all the marketers out there. How many people really want to give all their hard earned money away to buy junk that doesn’t matter.

Just remember, that the more complex a plan is the more likely it is to fail. If you can keep your money life simple, you are in control of your own destiny.

What do you think? Do you keep your finances simple? Let me know in the comments.

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