Recently, my wife’s coworker at Ford Motor Company built my kids a homemade sled out of a large, plastic box that had been used to ship large automotive parts. I was a little skeptical about whether my kids would go for it, but they loved it. We had hours of fun as I pulled them all over the yard with something that was destined for the landfill. And Dad got a pretty good workout.

Kids don’t always need fancy gadgets to have a fulfilling experience; neither do investors.

“Can You Work on This?”

Did you ever see National Lampoon’s “Christmas Vacation” with Chevy Chase? There’s a great scene where Chevy Chase hands his son Rusty a huge, tangled mess of Christmas lights and says something like, “Here, Rusty, work on this.” A lot of people come to me with a similar challenge. After acquiring assorted investments for years – at work, on their own, having been strung along in myriad broker relationships – they come to Pathway with a tangled ball of holiday lights that represent their investment portfolio.

Complexity Creep: A Common Curse

If you and your family have accumulated so many holdings over the years that you’ve lost control over them, believe me, you’re not alone. I remember one meeting in which I asked a high level question about the approximate value of taxable assets. The husband started nervously sifting through his stack of statements. He finally hung his head low and confessed, “Greg, I have no idea. This is such I mess I don’t even know what I own.

There are plenty more similar tales I could tell. We all start out with good intentions. But something happens along the way that I refer to as “complexity creep.” You pick up a fund here and fund there. You read an article and follow its advice to buy a few hot stocks. You have a grab bag of retirement plans and maybe some pension benefits at a string of former employers. Your neighbor recommends his broker with whom you establish another new set of accounts, augmenting the ones you already have set up at a different custodian through your spouse’s college buddy.

Your portfolio never quite feels “done,” because you don’t really know what you’re trying to do with it. There’s no overarching plan, so each investment is made in a vacuum, separate from past or future decisions. Slowly, over the course of years, your ball of complexity grows, as does your stress level over how, or if, you’ll ever be able to unwind it.

Seeking Simplicity

In many respects, those who come to Pathway seeking simplicity are my favorite people. They allow me the opportunity to provide among the greatest services I feel a financial advisor owes his or her clients: (1) a simple plan to guide every investment decision made moving forward and (2) solid solutions to help minimize complexities and stick to the plan, plain and simple. It’s amazing how often one can quickly untangle a seemingly hopeless ball of investments when a plan is in place to light the way.

In 1999, Vanguard founder and chairman emeritus John Bogle spoke on Investing With Simplicity at The Washington Post’s Personal Finance Conference. “Simplicity is the master key to financial success,” he said. In the same speech, he shared a Shaker ballad that I love:

“Tis the gift to be simple;

Tis the gift to be free;

Tis the gift to come down

Where we ought to be.”

Bogle’s wise advice holds as true now as it did then. Life is complex enough; we don’t need to complicate it further. Together, let’s work on simplifying your financial life.

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