Maximizing Investments: Simplifying Instead of Optimizing

  Investments. An area that a lot of people consider to be their Achilles’ heel, their lifelong challenge.   Some people jump right into investments and find themselves drowning so fast, they have no idea what just happened. Some survive the changing tides, but and up feeling that investing is too tiring and time-consuming.   Especially for people who have full-time jobs to worry about, you can just imagine how straining this could be. Sure, it’s possible that they have family back home who can take care of things for them, but investments require attention from the actual person who owns the money being grown.   Knowing this, it’s hard to fall into the trap that has made a lot of people wary of investments, investments that could have given them rich rewards if only they had known what to do. A lot of people have tried, but something has been keeping them from reaching success without being overwhelmed and over fatigued.   This is why OPTIMIZING your portfolio is never the answer.  

Are You Optimizing?


Image Credit: Christian Guthler

Let’s start with optimizing.   What happens when you optimize?   Think about how you shop when your favorite store goes on sale. Are you:   a. The one who grabs every piece regardless of its style and what it’s for. As long as it fits, you can always figure out later on where to wear it.   b. The one who thinks about what’s already in their closet and chooses pieces that are on sale, but are also needed.   What happens 6 months to a year down the road?   a. You have a closetful of clothes with half of them still bearing tags, never worn.   b. You have the right number of clothes bought at a discount, all of them you have worn at one point, some of them you wear quite regularly.   See the first option? That’s someone who optimizes.   You grab every possible investment you see, especially when you see that it comes at such a low price. Yes, at the end of the day, you accumulate a number of investments that have so much earning potential.   But is this the best way for you to grow your portfolio and actually be happy about it?  

What Happens When You Optimize

  Optimizers always fall into the trap of purchasing something right off the bat. Sure, they are optimistic in a way that they always look at the best possible outcome. But that just doesn’t happen in an ideal world, does it? No matter what happens, there will always be a few things out of all your choices that would not work out the way you want it.   It’s easy enough to be overwhelmed when you have a lot of appealing options in front of you. Real estate may be attractive now. You may have been presented with over a hundred investment funds to jump into.   Counting the maximum potential for each of your options, you figure that you can actually earn four or five times your initial cash out, maybe even more.   Here’s some food for thought, though – the more time you devote to over-optimizing, the less you notice the bigger opportunities passing by.   Optimizers have so much in their hands, they end up:   Not being able to focus on growing each of the investments that they have. They end up putting mediocre effort into each of their investments, which means that they also fail to arrive at the best-case scenario they were imagining at the start.   Not being able to focus on the better opportunities coming. With your plate already full, where else will you put the next dish that comes out? Remember that you can only put so much on your hands. Fill it to the brim, and there’s a huge chance that something (if not everything) will fall off.   Being too stressed and overwhelmed. With so much on your hands, how can you even leave enough time for your brain to stop computing and start working?   Being drained. And when you’re drained, you’re unproductive. Become unproductive, and you’ll see all the money you invested disappearing right before your eyes. With all this at stake, would you still want to optimize?  

Image Credit: Douglas Kelley

Simplify Your Investments, Simplify Your Life

  So if you’re not going to grab every single opportunity that comes your way, what do you do now?   You simplify.   Here are a few tips on how you can simplify your investments:   Focus on one thing at a time.   So your friend tells you that stocks are at an all-time low, it’s an amazing time to go shopping. This will give you the chance to get all the returns once the market starts bouncing right back up.   But you also have a friend who says that mutual funds are also a great investment at the moment, while another person behind you is telling you that it’s all about index funds at the moment.   Here’s what you do. Review each of them and figure out what suits your personality the best. It’s not just going to be about how much you’ll be earning in the end, it’s also about which of the options you can put your heart and soul into.   Juggle all these at once, and you won’t even have time to understand the basics. But choose one and stick to it for some time, and you’ll have the ins and outs mastered like the back of your hand. This gives way for better focus, and better chances of actually reaching the best-case scenario.   Be content with what’s good enough.   Everybody wants to have the best. But remember that sometimes, having the best means that you’re going to sacrifice a lot of things.   When it comes to investments, you can always settle with what’s good enough right now. If someone tells you that real estate is great both in New Zealand and in the Philippines at the moment, even if you have the financial capacity to work on both at the same time, restrain yourself. Choose one and tell yourself that your choice is good enough.   Understand that your energy is also an investment.   Yes, the amount of energy that you have can also be considered as an investment. It’s the gas that makes you move, allowing you to do all steps necessary to make each investment reap the promised rewards. And what do you do about your investments? You take care of them. That’s the same thing you should be doing to your energy supply.   Make sure you make good use of your energy. By focusing on one important thing at a time, you stretch your energy to its maximum, allowing you to reap better rewards. Of course, you should also leave some time for your energy banks to refresh, something that you just can’t do when you optimize and load your brain with too much to think about.   Make a list of things you SHOULD NOT do.   Especially if you’re already a chronic optimizer, you have to remember the things that you used to do so that you can actually keep yourself from doing them.   Don’t hunt for bargains when you’re bored.   Don’t jump from one hot investment tip to another.   Don’t start something new without even mastering the last one.   Don’t combine a dozen new investments in one go.   Look for those problem areas that trigger your stress as an investor. From there, you’ll start making the transition from being an optimizer to a simplifier.   Get rid of investments that you haven’t taken cared of for a long time.   If you’re an optimizer, you would definitely have a few investments sleeping somewhere. Here’s some sound advice – get rid of them now!   No matter how long you wait, if they’re earning next to nothing, then they’re not worth it at all. This is especially true if you haven’t even so much as glimpsed at them for some time. Save yourself the trouble. Start your spring cleaning now.   Indeed, it’s a better feeling when you start simplifying. You’ll find that you finally have the time and the energy to concentrate on just one or two existing investments, allowing them to grow to their maximum potential.   Special thanks to thinkpanama for the main image.

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